Dr Pepper Group Coca Cola copmany financial comparison

Document Type:Thesis

Subject Area:Accounting

Document 1

The main products that the company is producing are Dr Pepper, Snapple, RC Cola, A&W, 7 Up United States, Sunkist, Canada dry, Big red, Mott’s Vernon, Nehi, Hawaiian Punch among others beverages. Dr Pepper Snapple Group has some subsidiaries companies (Del, Manganelli, and De 2016, July). For instance, Bai Brands, Big Red, Inc. The American Bottling Company, and Canada Dry Motts. The next company is Coca-Cola Company which is an American company, retailers, manufacturers, and the marketers for the non-alcoholic syrups and beverage concentrates. The company has been known for their flagship product Coca-cola, the company was invented by a pharmacist in Georgia Atlanta by the name John Stith Pemberton in 1886, and the name and the formula of the brand were bought by Asa Griggs Candler in 1894, who led the company to its incorporation. Coca-Cola Company headquarter located in Georgia Atlanta. The Coca-Cola Company manufactures syrups concentrate that the company sells to their bottler across the globe like North America for the Coca-Cola Refreshments. The company is operating in the beverages industry, and it serves the worldwide network. Acquisition of the company is a long history as it acquired Minute maid, Colombia pictures, the Indian Cola brand Thums up, it acquired the Barq’s, Odwalla brand smoothies, among others (Wahlen, Baginski, and Bradshaw, 2014).   The Coca-Cola Company and its bottlers are only producing the syrup concentrates which they sell to various bottlers across the globe; the bottlers are given the contracts with the company who produces the finished or end products from the syrup concentrates.

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The company has many products including the non-food assets like; Colombia pictures, the world of Coca-Cola, Brands are soft drinks like Fanta, Sprite, Coke Mini can, Holiday can, Glaceau among other brands (Stuckler, Ruskin, and McKee, 2018). The major competitors are Dr Pepper Snapple, Nestle Pepsico, Red Bull, and Parle. The next company is the PepsiCo, Inc. which operates in the multinational American food, beverage and snack company. The headquarter of the company is situated in Harrison, New York. The company operates in the beverages and Food processing. The primary competitor is the Coca-cola Company in the beverage industry and market. The products are Cheetos, Quaker Foods, Gatorade, Aquafina, Pepsi Max, and Fritos among many others (Wahlen, Baginski, and Bradshaw, 2014).   Ratio Analysis Ratio Formula Coca-Cola Company Keurig Dr Pepper Inc. and 0. respectively.

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That shows that Coca-Cola Company is utilising their asset more efficiently compared to the other competitors. Account Receivable Turnover is one of the efficiency ratios which measures the way business can convert the account receivable into cash within the stipulated period. It shows how efficient in collecting the account receivables, therefore, the higher the ratio, the better. and lastly the PepsiCo Company with a ratio of 10. Gross profit margin is one of the profitability ratios which compares the net sales to the gross margin of the company. It is calculated by dividing the net sales which are the cost of goods sold by the gross margin. A high ratio is favourable compared to a low ratio. Coca-Cola Company has the highest ratio of 16. It is calculated by dividing the current assets by the current liability.

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The higher the ratio, the better for the company since it is an indication that the company can pay the short term financial obligation through the current asset. PepsiCo has a ratio of 1. followed by Coca-Cola 1. and Dr Pepper at 0. The other two companies and like Coca-Cola Company and Dr Pepper Company are also using the allowance method (Leahy, Ratliff, Riedt, and Fulgoni, 2017). Straight line: depreciation technique uses the allocation of the equal amount of depreciation that is allocated through the useful asset life. Double-declining balance: applies the constant rate to each year asset to book value, the net income will be high initially then it would start declining annually (Alamri, and Syntetos, 2018). Units of Production: it shows the useful life of as total units that the asset can produce. It is applicable for the depreciation of machines.

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Intangible Assets are the asset that does not have physical presences or existence such as Goodwill, patents, brands, copyrights, permits, corporate intellectual property among others. The PepsiCo Company does not recognise the charges on an intangible asset like goodwill. Coca-Cola uses the goodwill for testing for the impairments yearly, and they account for it using acquisition techniques. Dr Pepper uses customer relationship and distribution rights as goodwill or intangible asset (Del, Manganelli, and De 2016, July). Recommendation I recommend that the investors to consider investing in Coca-Cola and PepsiCo companies since they are both profitable with a high level of liquidity. Manganelli, B. De Paola, P. July). Depreciation methods for firm’s assets. In International Conference on Computational Science and Its Applications (pp. Stuckler, D. Ruskin, G. McKee, M. Complexity and conflicts of interest statements: A case-study of emails exchanged between Coca-Cola and the principal investigators of the International Study of Childhood Obesity, Lifestyle and the Environment (ISCOLE).

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 Journal of public health policy, 39(1), 49-56.

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