CaseStudyPepsi

CaseStudyPepsi - Table of Contents P.2 Table of Contents...

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Table of Contents P.2 Table of Contents P.3 Executive Summary P.4 History and Mission P.5 Products and Services, Why we Chose This Company P.6 Competition P.7 Five Year Analysis- Raw Data P.8 Five Year Analysis- Vertical Analysis P.9 Five Year Analysis- Horizontal Analysis, Ratio Analysis- Current Ratio P.10 Executive Summary PepsiCo’s mission is to be the world’s premier consumer products company focused on convenient foods and beverages. They seek to produce financial rewards to investors as they provide opportunities for growth and enrichment to their employees, business partners and the communities in which they operate. “PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today.”(1) When the project was first initiated with our group of six members, the obvious question that came to mind when choosing the right company was which will make the most profit? The choices that were available to us were: Exxon Mobile, UPS, Panera Bread Co., Pep Boys, Apple Inc., and PepsiCo. How we determined which company to select was first based on the current status in revenue of the company. Panera Bread Co. was immediately out of the question due to the huge losses in the previous years. Apple Inc. portrayed surprising numbers but was eliminated since they did not have a compatible competitor that met the criteria of the project. Pep Boys was also following the trend of a decline in profits leaving us with Exxon Mobile, UPS and PepsiCo. UPS was taken out because of its unstable financial status, and we finalized our choice of company by majority vote which ended up being PepsiCo. The results of the financial analysis did not really meet the standards of what we were hoping for in our company. According to the horizontal and vertical analysis, the company was struggling to keep their gross profits up because of the large amount of cost of sales. Sales were somewhat gaining throughout the previous 4 years, however their cost of sales were consistently higher than the sales which put a lead weight on gross profits, hurting the company’s mission to continually improve on all aspects of the world in which they operate.
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Our recommendation to future investors would simply be to stay away from PepsiCo until they can stabilize themselves on their cost of sales and expenses. Being an extremely well established company, our predictions and expectations on the company were set at a high level. Our opinions were dramatically differed however when we saw the final results of the company’s status. It is factual that our company did slightly rise in the end than when we first purchased the stock, but to safely invest in this company would set any individual’s investment on a financial rollercoaster. The initial investment was about $9982 in the beginning and ended up with $10190 at the end.
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This note was uploaded on 01/24/2012 for the course ECON 101 taught by Professor Newman during the Spring '11 term at Mt. SAC.

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CaseStudyPepsi - Table of Contents P.2 Table of Contents...

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