Assigment 5 Financial Managment

Assigment 5 Financial Managment - Financial Managment...

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Financial Managment Financial Management Instructor: Dr. Daniel Frost The Business Enterprise – BUS508 Strayer University June 12, 2011 Based on your analysis, determine which company is better able to pay current liabilities (debt). Explain your rationale. Based on the analysis of Pepsi Co and Coca Cola Enterprise the company that would be better able to pay current liabilities would be Pepsi Co. The company had retail sales of $108 billion in the year of 2009. In previous years, Coca-Cola would be better to pay current liabilities however the company suffered huge losses in the year of 2008. Pepsi Co has nineteen mega brands that provide revenues in several different markets. Coca Cola has five brands per geographic area. Coca Cola is a large organization that is present in numerous countries around the world. Pepsi Co seems to be better to pay liabilities based upon the several different brands the company provides. If there was an analysis based upon the year of 2010 Coca Cola Enterprise would be better able to pay current liabilities. The company sold $25.5 billion unit cases in 2010 versus the $24 billion in 2009. Coca Cola also had a 13% increase in gross profit and operating revenue. (Coca-Cola, 2011) Pepsi Co in the year 2010 also experienced steady growth in revenue and 12% growth of earnings per share. Pepsi Co continued to deliver top tier financial returns in the year 2010. Pepsi Co Americas Foods provided the largest operating profit of 53% in the year 2010. (PepsiCo, n.d) Determine what profitability ratios can tell you about a company’s performance and how that information would influence investing decisions. Profitability ratios measure how well a company is performing based on an analysis of how profit was earned relative to sales, total assets and net worth. A financial ratio analysis starts by building on the previous three to five year financial data to provide possible options and trends
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Assigment 5 Financial Managment - Financial Managment...

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