Coke or Pepsi? (Comparison/Contrast including annual reports, using Accounting Principles)

Essay by rmichelegUniversity, Bachelor'sA-, May 2004

Almost everyone in the world prefers one brand to another. In comparing Coca Cola and Pepsi we must look at the financial pictures of both organizations. By comparing balance sheets, statements of income, statement of cash flows, statement of changes in owners' equity we can determine the choice of soda drinkers.

By reviewing the 2000 Consolidated Statement of Income of PepsiCo, Inc. and Subsidiaries, one can determine annual net sales of \$20,438 (in terms of millions). Costs and expenses total \$17,213. Operating profit equals \$3,210 before income taxes. After tax net income equals \$2,183.

The net income per share of PepsiCo is \$1.51.

On the 2000 Consolidated Statement of Cash Flows, PepsiCo reports net cash for operating activities at \$3,911, net cash for investing activities as (\$1,713), and net cash for financial activities of \$(\$2,298). The total end of year cash equals \$864.

Pepsi shows total current assets of \$18,339.

This includes cash assets of \$4,604, Property, Plant and Equipment of \$5,438, and other assets totaling \$8,297. Assets have increased from 1999 totals of \$17,551. Total current liabilities equal \$3,935. Long-term debt equals \$2,346, and income taxes account for \$1,361. Other liabilities total \$3,448. Liabilities have increased from 1999 totals of \$1,209. Shareholder's equity has increased from 1999 totals of \$6,881. See Consolidated Balance Sheet table.

By reviewing the 2000 Consolidated Statement of Income of Coca-Cola Company and Subsidiaries, one can determine annual net sales of \$20,458 (in terms of millions). Costs and expenses total \$18,281. Net income equals \$2,177. The net income per share of Coca-Cola is \$.88.

Coca-Cola reports on its 2000 Statement of Cash Flow net cash for operating activities of \$3,585, net cash for investing activities of (\$1,165), and net cash for financial activities of (\$2,072). The total end of year cash equals \$1,819, up from...