Week 9 Capstone - PepsiCo has fluctuating margins. Is there...

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After reviewing the Annual reports from both PepsiCo, Inc and the Coca-Cola Company, I would have to invest my money with Coca-Cola. While it does appear that both of these beverage manufactures would provide a good return on my investment, I feel as though the profitability being represented by Coca-Cola would offer the best opportunity for long-term growth. Coca-Cola was able to reduce their long-term liabilities as well as their short term liabilities. Coca-Cola appears to have a lower cost for goods sold than does PepsiCo. During the 2004-2005 time frame, PepsiCo reported lower income which could have been the result of higher cost for goods sold. One primary factor for choosing Coca-Cola over PepsiCo is the profit margins that were reported by each company. Coca-Cola reported slow, but steady profit margins, whereas
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Unformatted text preview: PepsiCo has fluctuating margins. Is there a reason that one company can have steady margins and another will have fluctuating margins other than possible miscalculations from internal sources in regards to sales, marketing or manufacturing strategies? I would prefer to go with slow and steady, verses fluctuating highs and lows. Both Coca-Cola and PepsiCo had a significant drop in the amount of capitol that was reported. PepsiCo capitol dropped by $839 Million and Coca-Cola dropped by $734 Million. Another factor to consider would be the Payout Ratio. During 2005, Coca-Cola had a payout ratio of nearly .55%, as opposed to only a .40% payout offered by PepsiCo. For these reasons, I would invest my money with Coca-Cola....
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