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Coke vs Pepsi Investment

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Coke vs Pepsi Investment
Coke VS. Pepsi
James Esposito
Strayer University
The Business Enterprise
BUS 508
Dr. Amanda Manners
June 11, 2011

Coke VS. Pepsi
The following paragraphs will discuss the financial positions of both Coke and Pepsi. There will be a discussion on which company has the greatest ability to pay off any current liabilities the companies have and what type of financial tools can be used to determine their capability to pay such debt. The reader will also be provided the tools that anyone can use to determine which company would be the best company to invest in, for their individual needs, and why they would invest in it. A determination of what company would be the best choice to invest in will be based upon the premise that an investor is looking for either future growth or current return and which company would be the best to provide both. To assist everyone with choosing the company with which to invest, both financial and non financial data will be explored.
Pepsi Has No Worries About Paying the Bills
Based upon the analysis of the financials of both the Coke Cola Bottling Company and PepsiCo a determination was made that indicated PepsiCo is currently in the best financial position to pay off their current liability. In reviewing the Liquidity and debt rations indicated in appendices a and b Coke is both highly leveraged and has less liquidity than PepsiCo. Coke’s Liquidity Ratio being 1.13% and PepsiCo at 1.44% and the overall Debt Ratio for Coke being a whopping 94.6% compared to PepsiCo at only 56% (Coca-Cola Enterprises Inc. [CCE], 2009) (PepsiCo, 2010).
By reviewing the financial ratio’s indicated above, one can conclude that PepsiCo most certainly has the flexibility if needed to liquidate their current assets in order to pay for any current debt that the company may be called upon to pay. In addition, by reviewing the Cash Flow Ratio from all sources on a company basis it will support the fact that PepsiCo has almost twice the positive cash


References: Coca-Cola Enterprises Inc. (2009). Form 10-K CCE Annual Report (USS&EC No.01-09300). Retrieved from CCE2009AnnualReport: http://www.cce2009annualreport.com Investopedia PepsiCo. (2010). Performance with Purpose the Promise of Pepsico 2009 Annual Report. Retrieved from PepsiCo: http://www.pepsico.com/annual09/ Appendix A
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