Battle of the Soft Drinks

VS VS

History

Coca-Cola

1886

John Pemberton

Georgia

Pepsi

1898

Caleb Bradham

Carolina

Dr Pepper

1885

Charles Alderon

Texas

How They are Distributed

Coke Signed Contract with Dr pepper Snapple in June 2012 - One time payment of $715 million

Pepsi signed Contract with Dr pepper Snapple in Dec. 2009 -One time payment of $900 million

Where Do You Stand?

Common Size Income Statement

Coca-Cola Pepsico Dr. PepperRevenues 100% 100% 100%Cost of goods sold 39.1% 47.5% 42.1%Gross Profit 60.9% 52.5% 57.9%Selling general & Adminitrative expences 39.0% 37.5% 38.4%Other expences 0% 0.2% 2.1%Income before tax expence 24.6% 13.3% 15.7%Income tax expence 6.0% 3.6% 5.4%Net income 19.9% 9.7% 10.3%

Cok e vs. P ep si vs. Dr p ep p erCom m on Size I n com e Statem en tYear En d ed Decem b er 31, 2011

Coca-Cola Graphical Analysis of Common Size Income Statement

Cost of revenues

38%

General selling and administra-

tive ex-pense37%

Income tax expence

6%

Net income19%

Pepsi CompanyGraphical Analysis of Common Size Income

Statement

Cost of revenue48%

General selling and Administrative

expense38%

Other ex-

pences0%

Income tax ex-

pence4%

Net income10%

Dr Pepper Snapple GroupGraphical Analysis of Common Size Income

Statement

Cost of revenue43%General

Selling and Ad-ministra-tive ex-pense39%

Other ex-

pences2%

Income tax ex-

pence5%

Net income10%

Comparative balance sheet

Amount % of Total Amount % of Total Amount % of TotalAssetsCurrent Assets:Cash and cash equivalents 12,803,000 16.00% 4,607,000 5.60% 701,000 7.60%Net recievables 4,920,000 6.20% 6,912,000 9.50% 731,000 7.90%Inventory 3,092,000 3.90% 3,827,000 5.30% 212,000 2.30%Other Current Assets 4,682,000 5.90% 2,635,000 3.60% 113,000 1.20%Total Current Assets 25,497,000 31.90% 14,441,000 23.90% 1,757,000 19%Property plant & equiptment 14,939,000 18.70% 1,477,000 2.00% 1,152,000 12.40%Goodwill 12,219,000 15.30% 19,689,000 23% 2,980,000 32.10%Intangible assets 15,450,000 19.30% 16,800,000 22.60% 2,677,000 28.80%other assets 11,869,000 14.80% 16,445,000 22.60% 717,000 7.70%total assets 79,974,000 100% 72,882,000 100% 9,283,000 100%LiabiliteisCurrent liabilities:Accounts payable 9,371,000 11.70% 11,949,000 16.40% 795,000 8.60%Other current liabilities 14,912,000 18.60% 6,205,000 8.50% 1,120,000 12.10%Total current Liabilities 24,283,000 30.40% 18,154,000 24.90% 1,915,000 20.70%Long term liabilities 24,056,000 30% 34,140,000 46.80% 5,105,000 54.90%Total liabilities 48,339,000 60.40% 52,294,000 71.60% 7,020,000 75.60%Stockholders equity:Common Stock 880,000 1.10% 31,000 0.04% 2,000 0.02%RE and other equity 30,755,000 38.50% 20,673,000 28.30% 2,261,000 24.40%Total stockholders equity 31,635,000 39.60% 20,704,000 28.40% 2,263,000 24.40%Total liabilities and equity 79,974,000 100% 72,882,000 100% 9,283,000 100%

Coca-Cola Company Pepsico Dr Pepper Snapple

Coca-cola vs. pepsi vs. Drpepper Balance Sheet (Adapted)

"December 30, 2011"

Pepsi Balance Sheet

All numbers in thousands

Period Ending Dec 31, 2011 Dec 25, 2010 Dec 26, 2009

Assets

Current Assets

Cash And Cash Equivalents 4,067,000 5,943,000 3,943,000

Short Term Investments 358,000 426,000 192,000

Net Receivables 6,912,000 6,323,000 4,624,000

Inventory 3,827,000 3,372,000 2,618,000

Other Current Assets 2,277,000 1,505,000 1,194,000

Total Current Assets 17,441,000 17,569,000 12,571,000

Long Term Investments 1,477,000 1,368,000 4,484,000

Property Plant and Equipment 19,698,000 19,058,000 12,671,000

Goodwill 16,800,000 14,661,000 6,534,000

Intangible Assets 16,445,000 13,808,000 2,623,000

Accumulated Amortization - - -

Other Assets 1,021,000 1,689,000 965,000

Deferred Long Term Asset Charges - - -

Total Assets 72,882,000 68,153,000 39,848,000

Liabilities

Current Liabilities

Accounts Payable 11,949,000 10,994,000 8,292,000

Short/Current Long Term Debt 6,205,000 4,898,000 464,000

Other Current Liabilities - - -

Total Current Liabilities 18,154,000 15,892,000 8,756,000

Long Term Debt 20,568,000 19,999,000 7,400,000

Other Liabilities 8,266,000 6,729,000 5,591,000

Deferred Long Term Liability Charges 4,995,000 4,057,000 659,000

Minority Interest 311,000 312,000 638,000

Negative Goodwill - - -

Total Liabilities 52,294,000 46,989,000 23,044,000

Stockholders' Equity

Misc Stocks Options Warrants (116,000) (109,000) (104,000)

Redeemable Preferred Stock - - -

Preferred Stock - - -

Common Stock 31,000 31,000 30,000

Retained Earnings 40,316,000 37,090,000 33,805,000

Treasury Stock (17,875,000) (16,745,000) (13,383,000)

“Our fiscal year ends on the last Saturday of each

December, resulting in an additional week of results every five or six years.”

Accounting Ratios

Current Ratio Comparison

Current AssetsCurrent Liabilities

Current Ratio measures the ability to pay liabilities with current assets

Coca-Cola1.05

Pepsi Co.96

Dr Pepper Snapple

.92

Coke

Inventory Turnover

Cost of Goods SoldAverage Inventory

Indicates salability of inventory- the number of times a company sells its average level of inventory

during a year

Coca-Cola6.34

Pepsi Co8.78

Dr Pepper Snapple

10.89

Dr Pepper Snapple

Days In InventoryMeasures the average

number of days inventory is held by the company

365 Days Inventory turnover

ratio

Coca-Cola58 Days

Pepsi Co42 Days

Dr Pepper Snapple33 Days

Dr Pepper Snapple

Gross Profit Percentage

Measures the profitability of each sales dollar above cost of goods sold

Gross ProfitNet sales

Coca- Cola60.9%

Pepsi Co52.5%

Dr Pepper Snapple57.9%

Coke

Accounts Receivable Turnover

Measures the ability to collect cash from

customers

Net Credit SalesAverage net

accounts receivable

Coca-Cola 9.96

Pepsi Co10.05

Dr Pepper Snapple

8.69

Pepsi Co

Days Sales in Receivables

Shows how many days’ sales remain in accounts receivable

__________365___________Accounts Receivable

Turnover Ratio

Coca-Cola36.65

Pepsi Co36.32

Dr Pepper Snapple

40.74

Pepsi Co

Debt Ratio

Pepsi Co72%

Dr Pepper Snapple

76%

Indicates the percentage of

assets financed with debt

__Total Liabilities____Total Assets

Coca-Cola60%

Coke

Debt to Equity Ratio

Pepsi Co2.53

Indicates ratio of debt financing

relative to equity financing

Total LiabilitiesTotal Equity

Coke

Coca-Cola1.53

Dr Pepper Snapple

3.10

Rate of Return on Net Sales

Shows the percentage of each

net sales dollar earned as net income

Net incomeNet sales

Pepsi Co9.6%

Coca-Cola 19.9%

Dr Pepper Snapple10.3%

Coke

Rate of Return on Total Assets

Measures how profitably a

company uses its assets

Net Income + Interest Expence

Average Total Assets

Pepsi Co10.4%

Coca-Cola12.7%

Dr Pepper Snapple

7.9%Coke

Asset Turnover Ratio

Measures the amount of net sales generated for each average dollar of total assets invested

_____Net Sales_____

Average total Assets

Pepsi Co.94 Times

Coca-Cola.61 Times

Dr Pepper Snapple

.65 Times

Pepsi

Comparing Ratios

Coca- Cola• Current Ratio• Gross Profit Percentage• Debt Ratio• Debit to Equity Ratio• Rate of Return on Net

sales• Rate of Return on total

assetsDr Pepper Snapple

Group• Inventory Turnover• Days in Inventory

Pepsi Company• Accounts Receivable

turnover• Days in Sales Receivables• Asset Turnover Ratio

Online Poll of Soft Drinks

Coca- C

ola Pepsi

Dr Pepp

er

Mountai

n dew

Root

Beer

Other

0

5

10

15

20

25

30

35

Who Likes What?

Soft drinks

Perc

enta

ge

1,500 people responded to pollCoke- 30%Pepsi- 20%Dr Pepper- 12%Mountain Dew- 6%Root Beer- 5%Other- 27%Others included: Sprite, Ginger ale, 7up,Mr.Pibb,Sunkist, Fresca, Sierra Mist and Grape soda.

ConclusionWhat would you like to see happen?