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EssayThe objective of this paper is to compare the major players in the beverage/soft drink industry, Pepsi Co. coca Cola Co. This paper will give you sound information on which confederation to trust in as well as taking a deeper look at both companies over all. My analysis will be made based on the companys income statements, horizontal, vertical analysis, balances sheets and financial statement ratios. This along with other information should give you a clear picture of which company is the best company to invest in. Researching this analysis is needed find the soundest corporation for investment. Out of the myriad of carbonated waters, coca Cola and PepsiCo. are the most recognized name and the most known contest in the soft drink industry. Coca-Cola owns the somewhat disputed title as be the best cola brand worldwide. Some on the other wad know PepsiCo as the rival brand because Coca Cola has had such great marketing and advertising. In 2004, PepsiCo achieved margi nally growth rate in benefit profit and gross sales, where Coca Cola has maintained profit margin. The PepsiCo. presented pitiableer short-term liquidity risk to investors compared to Coca Cola. Coca Cola and PepsiCo. There was low long-term solvency risk with PepsiCos risk being marginally greater than Coca Colas. PepsiCos overall asset in my opinion was more secure than Coca Cola. These and other companies help investor confidence and market share with their sales margins. PepsiCo stock is dividend-generating stock, but Coca Cola has had a higher yield and payout. Coca Cola has had asuperior profit margin and dividends are lucrative to investors in this industry but PepsiCos diversification, low short-term liquidity risk, low long- term solvency risk, make it a proficient asset application for PepsiCo stock look like a better investment.The competition between these two soda giants is strong. Having said that, there is still a point where price is not the issue but taste. Som e people swear by the taste in this loyal brand market. These two corporations have concentrated on cultivating brand management through applicable advertising, marketing campaigns. According to Bloomberg BusinessWeek, Coca-Cola endures the best globally recognized brand across all industries for ages, while PepsiCos brand ranked number 26 in year 2008. PepsiCo has been able differentiate itself from competitors by tapping into other markets like chips and healthy alternative foods. While PepsiCo is known for their soda, their expansion is clear in showing there is a need for other things being non-soda. The time for vitality comes with diversification because there are true signs of a shift in consumption. The decrease in soda consumption raises PepsiCo. has positioned it to continue to remain profitable for its shareholders. The income statement of PepsiCos COS to sales character slightly rose from 43.31% in year 2004. Coca-Colas five-year average COS to sales percentage was onl y 35.26%, much lower than PepsiCo. Coca Cola was able to achieve a higher gross profit margin with lower COS to sales percentage. PepsiCo is the consequence of its tougher pricing structure. PepsiCo arguably has the most diverse set of distribution systems of any consumer product company, including direct store rake (DSD) at Frito-Lay and our bottling partners, warehouse sack outy for Quaker products, and warehouse delivery and chilled DSD at Tropicana. The reach and scale of these systems provide considerable cost efficiency and system effectiveness in driving value. Our systems deliver product freshness and quality for the consumer generate cash flow for our retail customers, and pro- vide economic value for PepsiCo. Our products respond very well to merchandising, and need to be replenished oft because they sell so quickly. By having our DSD associates deliver products and stock the shelves themselves, we save retailers money by doing this labor for them, and help make sure ou r products are fresh, available and displayed to our advantage.http//www.pepsico.com/download/2004-Annual-English.pdfAccording to the Business Insider, Coca Cola has 42% of the market share while Pepsi Co. has 31%. The annual r even offue for two companies is $35.2 billion and $57.8 billion respectively. Coca Cola spending roughly $2 billion on advertising while their rival spend around $1.1 billion. http//www.businessinsider.com/coca-cola-vs-pepsi-timeline-2013-1?op=1 PepsiCo is the largest food-and-beverage company in the unify States, and the second-largest in the world, after Nestl. If PepsiCo were a country, the size of its economysixty billion dollars in revenues in 2010would put it sixty-sixth in gross national product, between Ecuador and Croatia. numerous studies point to the ubiquity of high-calorie, low-cost processed foods and drinks as one of the major drivers of this condition. Snacks, in particular, play a role in childhood obesity, which is growing even faster than obesity in adults. Americans consume about fifty gallons of soda a year, more than four times the average per-capita consumption sixty eld ago. Americans also ingest about thirty-four hundred milligrams of sodium per day, twice the recommended amount sodium has long been linked to high blood pressure. almost fractional of PepsiCos business is overseas (thirty per cent of it in developing countries), foreign markets eventually tend to follow U.S. trends. The markets of the future may well be in packaged nutritionin enriched products like PepsiCos SoBe Lifewater, which contains vitamins, and in its pricey Naked line of fruit juices and smoothies, which contain antioxidants. Another growing category is in operation(p) foods and beverages, like varieties of the sports drink Gatorade, which PepsiCo markets for specific physiological or metabolic attributes. (Thanks to Gatorades new fit series, you can drink G1 Prime before you work out, G2 coiffure during your workout, and G3 Recove r when youre cooling down. http//www.newyorker.com/reporting/2011/05/16/110516fa_fact_seabrook?currentPage=2The above quote taken from the New Yorker shows that diversity in such a extremely competitive beverage market, diversity is needed. Coke depends on the consumption of their product. That is still their main source of revenue for the company. It could be said that maybe PepsiCo is too diverse. I would sayI see this as an example of ensuring a proper return to the investor and keeping the integrity of the company. PepsiCo displayed advanced long-term affluence risk overdue to its higher debt to equity ratio of 1.24 and higher long-term debt to equity ratio of 0.68 on average, compared to Coca-Colas 0.90 and 0.29. The soda industry is wide and there are forever and a day new players but PepsiCo has managed its debt obligations more so than Coca-Cola by the measure of times interest earned ratio. PepsiCo had a better average return on car park equity of 33.92% than Coca-Colas 30.29%, whereas both companies had similar return on assets with Coca-Colas 16.54% average only being slightly better. PepsiCo and Coca Cola are the leading in the caramel color soda market. There earning regardless of the company you select show the investor that their staying power is evident.ReferencesBooksBrigham, E, F, Erhhardth, M, C (2005). Financial Management Theory and Practice. ordinal Edition. South Western Publishers Thomas, A, (2002). Introduction to Financial Accounting. Fourth Edition. McGraw Hill. WebsitesKulawik, A (2009), The development of Coca Cola Advertising Campaigns, retrieved on November 29th, 2010 from, http//images.nexto.pl/upload/publisher/All%20Free%20Media/ worldly concern/the_development_of_coca-cola_advertising_campaigns_(1886-2007)_demo.pdfAndrew (2002), A brief Pepsi History retrieved on November 29th 2010 from,Day, J (2008), Theme Analyzing Financial Statements, retrieved on 30th November 2010 fromGattis ,C,G.(2009).Using Financial Ratios http/ /bluepointstrategies.com/uploads/White_Paper_-_Using_Financial_Ratios.pdf 30th November 2010