Question

student is required to produce a financial document comparing two publicly traded corporations. this project is designed to answer the following question: which company is a better investment?

student will choose two companies that produce a similar products. ( cars, communication or retail)

source of information: latest annual report published by company (2015 May be available, but if not, use 2014). This report can be found on the company's website..

Answer 1

Coca Cola Company Limited and Pepsi Company Limited have been selected for comparison of the financial information of the two companies since both these companies manufacture similar products and are in the same industry.

The revenue of Coca Cola Co. over the years have reduced significantly to come to $41,863 million in the financial year 2016 similarly the gross revenue of Pepsi Inc. of $62,799 million in the financial year 2016 has also reduced in last few years. However, compare to the reduction in gross revenue of Coca Cola the reduction in gross revenue of Pepsi Inc. is relatively less. The operating income of both Coca Cola and Pepsi have also shown the similar trends as per the financial statements of these two companies. Compare to an operating profit of $10,779 million in the year 2012 the operating profit of Coca Cola Co. has reduced to $8,626 million in the year 2016. However, the operating income of Pepsi co. has increased despite the reduction in gross revenue of the company. The Operating profit of $9,785 million for the year 2016 is significantly better than the operating income of $8,353 million of 2015. The financial position of both the companies have improved significantly over the years as is clear from the statements of financial position of both these companies.

The investors are mainly concerned about ability of an organization to earn substantial amount of profit, Earnings per share and the amount of dividend. The EPS and dividend along with the operating profit of Pepsi Co. have showed better performance compare to the performance of Coca Cola. Hence, it is better to invest in Pepsi Company Limited.