Company Analysis (Coca Cola vs. Pepsi)Coca Cola and PepsiCo Companies are responsible in the production of soft drinks, and they are the most leading competitors in this industry. The background information of the two companies will be given in this per, considering whom their customers and suppliers are. The companies stock prices will be given, as well as the financial analysis to determine which company is best suit for the investors to invest in.Coca Cola Company has its headquarters in Atlanta, Georgia, and it was invented by John Pemberton. The company serves over 200 countries, and it has been in existence for a period of more than 100 years. The company started with the sale of Coca Cola as syrup that was being mixed with water to minimize headache. Bottling of the soda from the Coca Cola Company was found to be a great idea which had an impact on the market o0f the products, since the company wanted to sell the products in other countries outside United States.The companys suppliers are those who supply materials including the product ingredients, machinery and packaging to the company. The suppliers have to comply with the laws and regulations set in carrying out businesses, and the company has Supplier Guiding Principles which govern their operations. The customers include international retailers, restaurants and even small businesses. The company works to attain additional value to the customers, who work to improve sales and bring in profit to both their businesses and the company as well. The companys aim is to diversify the suppliers, with a consideration of maximizing procurement opportunities, which have the minority and the women owned businesses being the companys suppliers, contractors and sub contractors. This enhances the companys aim of achieving competitive advantage over the other companies working in the same industry.Pepsi Cola was invented by Caleb Bradham in 1898, and it was launched in 1902. The companys achievement was related to the increased rate by which the company franchised, leading to the establishment of Pepsi Cola in 24 States. The company progressed until the World War I when the cist of doing business increased. This led to the company becoming bankrupt, with only two plants remaining at that particular time.The companys suppliers are partners at the local and national organizations, which advocate for women owned businesses as well as the companys suppliers. The company supports the suppliers by offering scholarships for business owners, and advocate for the development of diversity programs which facilitate opportunities for contracts in the company. The companys growth has also been facilitated by SHI which acquired the company and made it its most special customers. SHI has led to the increased growth of the company.This is the price of a single share of the companys stock. An individual who purchases stock from a company becomes the shareholder of that particular company. The stock price is calculated by using the market capitalization and dividing it with the number of outstanding shares.The table below shows the stock prices for the year 2010, 2011 and 2012 for the Coca Cola Company.It is important to consider the fact that the stock prices do not indicate the future price performance of a company. During the companys initial public offering, the stock price was $101.00. In the beginning of January 2010, the stock price was $57.00, in January 2011, the stock price was $65.77, and in January 2012 the stock price was $ 69.97. This trend on the price of stock at Coca Cola Company shows that there has been a record increase of the prices each year. Thus, conclusions can be made concerning the future prices, though there may be changes experienced in stock prices. In the following years, the stock price is likely to increase following the trend, showing that the company is well sustained, and its operations are improving for the purposes of achieving competitive advantage over other countries. Stock prices have been appreciating in the previous years, showing the possibility of greater appreciation of the stock prices in future.The following table shows the stock prices for 2010, 2011 and 2012 for the Pepsi CompanyAccording to Lijuan and Ye (2012), the factors affecting stock price of a company are influenced by the economic conditions of the country with which the businesses are doing business in, and the factors which make the business successful. Both Coca Cola Company and PepsiCo have been experiencing low sales in their products, due to the adverse weather conditions experienced, as well as due to the rise need of ensuring that the customers are kept healthier. This has led to a decline in the stock price, and thus the companies have found it important to consider diversifying their markets in order to reach to international markets.PepsiCo has become involved in the sponsoring of the Indian Premier League (IPL), which supports the sporting events. The agreement between the Indian Premier League and PepsiCo will last for a period of five years, beginning in April 2013. The company has paid twice amount of money that the previous sponsors paid to the IPL. Reasons behind the signing of the agreement is that PepsiCo has been having a big market in the Indian snacks, making it possible for the company to venture and get into the market in the developing world. Pepsi has been able to invest a lot in the country by providing Indian snacks, and also beverages. Therefore, the company finds it important to find ways in which it can keep its competitors at bay, and they have found it important to sign the agreement with IPL for the benefit of the company in the stock prices as well. If PepsiCo uses the opportunity well, it means that it will be visible enough to ensure that it promotes its products, thus creating a possibility of increasing its shares. Though Coca Cola has been in the Indian market for a certain period of time, it is clear that the country has been experiencing more of PepsiCos products, resulting to a change in the various ways in which Coca cola can be able to deal with the market.The financial analysis can be measured in terms of the financial ratios, including the price to earning ratio, price to the operating profit, price to sales and price to book value. According to Kline (2007), financial analysis are effective if they are conducted within the same time frame, and if the companies are operating on the same economic conditions. The following table shows the financial position of the Coca Cola Company from the year 2010 to 2012.The price to earning ratio gives an analysis on how much the investors pay for the common stock per the current company earning. Coca Cola ratio of pay for the stock increased from 2010 to 2011 and from 2011 to 2012, though the increase to 2011 was with a higher percentage as compared to the increase in 2012. The price to Earning Ratio is calculated using the net income. Analysts use the Price to Operating Ratio instead of using price to earning ratio. The companys price to operating ratio shows a decline from the year 2010 to 20100, but there is a slight increase in the year 2011.The price to sales ratio describes the rationale of the companys sales. In a companys income statement, the price to sales are mostly manipulated or distorted than the other fundamentals in the statement account. In most cases, Coca Cola experiences its sales being more stable as compared to the companys earnings. It is important to note that sales are never negative because the company has always been on operation and the sales have been increasing. Coca Cola has its price to sales ratio declining from the year 2010 to 2011, but records a slight increase from 2011 to 2012. The price to book value of a company is said to be element which indicates the markets situation, thus enhancing the relationship between the rate of return of the company and the actual rate of return. Coca Colas price to book value ratio records an increase from the year 2010 through to 2012.Coca Colas revenue and net income has been stable over the last five years. This shows that the companys record is positive despite the world economic changes that have been experienced. The company was able to acquire the CCE bottling comp0any in 2011, a situation which has made it possible to record an increase in net income and revenue for the company. For instance, the total revenue in 2010 was $35,119, and it increased in 2011 to $46,545, and later on increased to 2012 to $48,017.The following table shows the financial position of the Coca Cola Company from the year 2010 to 2012.The price to earning ratio for PepsiCo has been declining from 2010 to 2011, but an increase is recorded from 20141 to 2012, and the ratio in 2012 is seen to exceed that in 2010. The price to operating profit ratio also declined from 2010 to 2011, but later on increased to a slightly higher ratio in 2012 than that of 2010. The Price to Sales ratio shows the same trend, where there is a slight decline from 2010 to 2011, and later on a slight increase from 2011 to 2012. The price to book value records a different trend, where the ratios have been increasing constantly from 2010 to 2011, and later to 2012.The companys revenue in the year 2010 was $57,838, and there was an increase in 2011 to $66,504. However, PepsiCo recorded a slight decrease in revenue from 2011 to 2012, and the revenue was $65,492. This trend shows that the revenue which the country is flat. There is no big difference between the companies financials ranging from the year 2010 to 2012.Making investment decisions requires the effective analysis of the companys financials. This means that auditors who are responsible in carrying out the analysis have to ensure that fraud is avoided, in order to ensure that clear decisions are made regarding the companys investment positions. Sometimes, fraud may lead to a company recording financial losses, and in case investors make decisions on information which is false, they are likely to make mistakes and suffer losses which they had not anticipated (Isa, 2011). Thus reliability and relevance of the financial information for both companies depend on the provision of information depending on the particular time when the financials were recorded, the reasons as to why the financial analysis was carried out in the company, and whether the objective was completed and made accurate depending on all the operations of the company business.Thus, the financial position of the companies have analyzed through the financial ratios, and determination of the companys revenues. Reliability depends on the circumstances and situations on whether the objectives have been met. Thus, reliable financial data in a company can be achieved only if the control mechanisms are put in place to ensure that the number of fraud cases and distortion of data is avoided. This will enable the investors make better decisions which according to Isa (2011) will bring about positive impact and generation of profits for the company.The Coca cola Company has been recording an increase in revenue, compared to PepsiCo whose revenues have been flat for the last few years. Depending on the time frame used in carrying out this research, which is from 2010 to 2012, Coca Cola company has been having greater chances of increasing the company sales as they have been rising with a higher number as compared to the company sales of PepsiCo. For instance, the stock sales from 2010 to 2011 for Coca Cola increased by $8.77, compared to the increase in stock sales in PepsiCo which increased with $4.53. This means that Coca Cola is a better investment since the investors will receive decreased interest rates, which will make the investment a success, as compared to PepsiCo whose stock prices are increasing at a slower rate. According to Haramis (2007), stock prices increased as a result of increased profit for the company, and this means that Coca Cola has been experiencing more profits than PepsiCo.From the analysis of the two companies Coca Cola and PepsiCo, the investors should consider investing in a company whose data from financial analysis is conducive for the purpose of bringing in a positive impact on the company and the investors assets. The trend of the stock prices has also been found to be a better tool in making the final decision, as it allows for the analysis of the future prices depending on the current trend.Haramis, I. E. (2007). USA: The Stock Market Guide.Isa, T. (2011). Impacts and Losses caused by the Fraudulent and Manipulated Financial Information on Economic Decisions. 12 (5).Kline, B. (2007). USA: Atlantic Publishing Company.Lijuan, W., & Ye, X. (2012). Empirical Analysis of Macroeconomic Factors Affecting the Stick Price.