ppt. ratios

8/11/2019 PPT. Ratios

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Comparative Analysis of Pepsi &Coca-Cola for 2013 (Financial

Ratios Analysis)

2014


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Overview

Pepsi was first

introduced as

"Brad's Drink

in New Bern, NorthCarolina, United

States, in 1893

by Caleb Bradham,

who made it at hisdrugstore where

the drink was sold.

Coca Cola was

invented by a

pharmacist (John

Pemberton) in the

year 1886 when hewas experimenting for

a recipe for headache

and an energizer.

Nowadays Cokeserves as one of the

number one

recognized brands of

the world.


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ABILITY TO PAY CURRENT

LIABILITIES

Current ratio is mainly used to give an idea

of the company's ability to pay back its short-

term liabilities (debt and payables) with its

short-term assets (cash, inventory,

receivables).


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Acid-testratio

A indicator that determines whether a firmhas enough short-term assets to cover itsimmediate liabilities without sellinginventory.


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ABILITY TO SELL INVENTORY AND COLLECT

RECEIVABLES

Inventory Turnover - A ratio showing how manytimes a company's inventory is sold and replaced

over a period.


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Accounts receivable turnover

The ratio tells how many times duringthe year average receivables were

turned into cash. Accounts receivable

turnover measures the ability to collectcash from customers.


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ABILITY TO PAY LONG-TERM

DEBT

Debt Ratio

- a

financial ratio that

measures the

extent of a

companys or

consumers

leverage.


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Times-Interest-Earned Ratio

Ensuring interest

payments to debt

holders and

preventingbankruptcy

depends mainly on

a company's ability

to sustain earnings.


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PROFITABILITY

Rate of Return on Sales - This measure is helpful tomanagement, providing insight into how much profit isbeing produced per dollar of sales. A ratio widely used toevaluate a company's operational efficiency. ROS is alsoknown as a firm's "operating profit margin"


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Rate of Return on Total

AssetsMeasures a

companys success

in using assets to

earn a profit.

Net Income + InterestExpense/Average Total Assets


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Rate of Return on Common

Stockholders Equity

The amount of net income returned as a percentage ofshareholders equity. Return on equitymeasures a

corporation's profitability by revealing how much profita company generates with themoney shareholders

have invested.


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Earnings per Share of Common

Stock (EPS) The portion of a

company's profitallocated to eachoutstanding shareof common stock.

Earnings pershareserves as anindicator of acompany'sprofitability.


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ANALYZE STOCK AS AN

INVESTMENT Price/Earnings ratio

- It'susually more useful tocompare the P/E ratios ofone company to othercompanies in thesameindustry, to the market in

general or against thecompany's own historicalP/E.


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Dividend Yield

A financial ratiothat shows howmuch a companypays out in

dividends eachyear relative to itsshare price. In theabsence of any

capital gains, thedividend yield isthe return oninvestment for a

stock.


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Book Value per Share of

Common StockIt would be the amount of money that a holderof a common share would get if a companywere to liquidate


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CONCLUSIONS &

RECOMMENDATIONS


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CONCLUSIONS &

RECOMMENDATIONS


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