Financial Statements Essay

1481 words - 6 pages

Financial Statements PaperCoca-Cola has been in business for over 120 years and is still successfully growing. Coca-Cola originally started with soft drinks and now their product list is endless with foods and drinks. Like Coca-Cola, Pepsi is just as successful. Pepsi has been successfully growing for the past 110 years now. Pepsi also provides a great selection of soft drinks, Frito Lay snacks, sports drinks, Quaker foods, and many more. Coca- Cola was established over 120 years ago by a man named Dr. John Pemberton. It was a "one man" business which became one of the world's largest companies. Coke originally started here in the US, selling a glass of coke for $.05. Coke started getting its fame in the US when it was discovered that soda drinks are good for people's health. Shortly after Coca- Cola was introduced to America, Pepsi entered the market in 1898; Pepsi stared with soft drinks as well. Pepsi is standing very close to Coke with its products and sales around the world.Coca Cola has been competing for customers since Pepsi went into business. Soda drinkers always have a preference on the type of cola they drink. A major factor in getting a customer to buy a product is the marketing of a company. Based on a survey conducted last year, consumers preferred Coca Cola over Pepsi. The consumers that preferred Coca Cola were influenced by the products taste. Both Coca Cola consumers as well as Pepsi consumers were loyal to their product of preference. In both cases, these consumers have consumed Coca Cola and Pepsi for over 20 years. Consumers did say that if they did not have a choice and Pepsi was their only other alternative, then they would switch to Pepsi. Of those surveyed, the younger generation prefers the sweeter taste of Pepsi more than the crisp flavor of Coca Cola. If we were to recommend the merging of these two companies, we would begin by conducting a financial comparison of two publicly traded companies.Product Profitability analysis between Coca Cola and PepsiIn 2006, Coca Cola's net sales/revenues were $24,088,000. Cost of goods sold were $8,154,000 and the difference between both sales/revenues and cost of goods sold resulted in a gross profit of $15,924,000 in 2006. The net income in 2006 was $5,080,000. Pepsi's net revenue for 2006 was $35,137,000. The cost of goods sold was $15,762,000. The difference between the revenue and cost of goods sold in 2006 for Pepsi showed a net profit of $6,439,000. The net income in 2006 was $6,439,000. The importance of the financial data is to show areas in which the corporation is excelling and may want to continue to invest in. The financial data analysis in detail also reveals areas in which the corporation is losing money and from the findings the corporation can decide to change its approach in the particular area in order to prevent further financial losses. Also, the data helps management to identify these areas where there is loss and take action that leads to increased profits....

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