Accounting Research Paper

bill Research Paper Dr. white pepper Snapple class vs. The coca weed beau monde Amanda Herring Tarleton State University Declaration Statement I hereby certify that this musical composition constitutes my own product, that where the language of some others is set forth, reference marks so indicate, and that appropriate credit is given where I brace gived the language, ideas, expressions or writings of others. Amanda Herring ID 000078948Zip Code 76707 Tcapable of circumscribe Title Page1 Declaration Statement2 Table of Contents3Abstract4 Purpose & international adenosine monophosphateere Objective5 Introduction6 Statement of Problem7 m super cash in one(a)s chipsary Analysis8 SWOT Analysis13 Decision16 Implementation & international ampere Monitoring17 Conclusion18 Bibliography19 Appendix21 Abstract This paper exit argue the pecuniary differences between the Dr. capsicum pepper plant Snapple assort and the coca plant genus dummy society, dickens crapulence man ufacturing companies. It will take into account solely of the financial culture for 2010 and 2011 for each corporation, as well as current trends found for two of the companies.Financial statements for twain companies will be included, as well as analysis of both companies financial situations. A decision will be bump off at the end to determine which gild is opera hat suited to cater to an coronation portfolio and an explanation will be given as to wherefore this company has been chosen. Purpose & Objective Dr. peppercorn Snapple collection and The coca Cola go with were chosen beca intake of their sizes and product lines are relatively similar. They are both take in manufacturers with a wide array of disparate throw products under their label.It is hoped that with this research, one of these companies has a make better foodstuff position than the other so that it can be recommended to the reader as an addition to their investing portfolio. Introduction T he humans is shortly in a crisis like no other when it comes to the state of the orbicular economy, as is the United States economy. There is perpetually more a need to analyze the current situation of companies so that investors and company executives know what is going on with the financials and what type of leverage the company currently has, as well as what type of leverage they will prepare in the future.There is likewise always a need to compare ones company to that of similar companies who are competitors in the pains. The purpose of this paper is to compare and contrast Dr. capsicum Snapple Group and The coca Cola party, both make happy manufacturing companies, so that a decision can be make ab bring step forward which one to invest in. The coca plant Cola troupe (NYSE KO) is an American multinational drink corporation and manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups (Wikipedia. org) and was founded and headquartered in Atlanta, Georgia (Cooper, Ford, & Stephens, 2007). In 1886, pharmacist John Pemberton created the soft drink coca plant-Cola by combining soda water, lime, cinnamon, coca leaves, and Brazilian shrub weeds. The drink was origin in ally sold in Atlanta in Jacobs drugstore for five cents a glass as a soda onslaught drink (Cooper, Ford, & Stephens, 2007). Today coca-Colas reach spreads far beyond Georgia and redden the United States the company has take one of the worlds more or less recognizable corporations and the coca plant-Cola brand is one of the five most recognized symbols while the company has early 400 brands in everyplace 200 countries (Cooper, Ford, & Stephens, 2007). The Dr. Pepper Snapple Group (NYSE DPS) is an American soft drink company, based in Plano, Texas that was spun off from Britains Cadbury Schweppes who in 2006 and 2007purchased the Dr Pepper/ heptad Up Bottling Group (Wikipedia. org). They are the leading producer of flavored beverages in north most America and the Caribbean with their success being fueled by more than 50 brands that are synonymous with refreshment, fun and flavor having 6 of the top 10 non-cola soft drinks, and 11 of 14 leading brands are No. in their flavor categories (investor. drpeppersnapple. com). Along with their flagship Dr Pepper and Snapple brands, their portfolio includes Sunkist soda, 7Up, A&W, Canada Dry, Crush, Motts, Squirt, Hawaiian Punch, Penafiel, Clamato, Schweppes, moves and Mr & Mrs T mixers (investor. drpeppersnapple. com). Problem Statement The caper is decision making which of the two companies to invest money in their buy in. With so many different clove pinks to choose from, in that location is a need to get the most out(p) of enthronements these days.In order to come up with this decision, research is pertinent. Extensive research essential be beare by viewing at both companies financial information in the form of statement analysis, ratio analysis, financial lev erage, and proportional analysis, along with a SWOT analysis of both companies and comparing their strategies. The problem is having two very similar companies to choose from, and deciding which is going to be worth investing in the short and long term. Financial AnalysisCommon surface Income Statements & Horizontal and Vertical Analysis Table 1 coca Cola caller-up Income Statement Analysis (dollars in millions except for per dole out data) Year Ended Dec 31, 2011 Vertical Analysis 2010 VerticalAnalysis 2009 % Change 11/10 % Change 10/09 force out Operating Revenues $46,542 c% $35,119 carbon% $30,990 33 13 Cost of high-priceds sold 18,216 39. 1 12,693 36. 1 11,088 44 14 rude Profit 28,326 60. 9 22,426 63. 9 19,902 26 13 Gross Profit security deposit 60. 9% 63. 9% 64. 2% Selling, popular and administrative expenses 17,440 37. 5 13,158 37. 5 11,358 33 16 Other run charges 732 1. 6 819 2. 3 313 Operating Income 10,154 21. 8 8,449 24. 1 8,231 20 3 Operating Margin 21. 8% 24. 1% 26. 6% provoke Income 483 1 317 0. 9 249 52 27 Interest Expense 417 0. 9 733 2. 1 355 (43) 106 Equity income (loss) authorise income 690 1. 5 1,025 2. 9 781 (33) 31 Other income (loss) net 529 1. 1 5,185 14. 8 40 Income Before Income Taxes 11,439 24. 14,243 40. 6 8,946 (20) 59 Income taxes 2,805 6 2,384 6. 8 2,040 18 17 Effective tax rate 24. 5% 16. 7% 22. 8% Consolidated Net Income 8,634 18. 6 11,859 33. 8 6,906 (27) 72 Less Net income attrisolelyable to non restrainerling interest 62 0. 01 50 . 001 82 24 (39) Net Income Attributable to plough piece of landowners 8,572 18. 4 11,809 33. 6 (27) 73 Net Income per share elemental net income per share $3. 75 $5. 12 (27) 74 thin out net income per share $3. 69 $5. 6 (27) 73 Retrieved from The coca plant Cola social clubs 2010 and 2011 10k Reports The Coca Cola Company has opinen an annex in revenues since 2009, though they seem to wee-wee higher damages when it comes to selling, admini strative, and general expenses during the 2011 chronicle period. This seems to be the trend throughout the world, though, as the economic situation has become sour again and harms seem to be rising on all products and services. The exist of goods sold is also higher in the year that has the highest revenues, though this can be attributed to the economic situation once again.The problem with the cost of goods, selling, administrative, and general expenses being so high is that net income has turned out swallow, for the 2011 year thus causing the per share income to be significantly overthrow than that of 2010. Table 2 Dr Pepper Snapple Group Income Statement Analysis (dollars in millions except for per share data) Year Ended Dec 31, 2011 VerticalAnalysis 2010 VerticalAnalysis 2009 % Change 11/10 % Change 10/09 Net Sales $5,903 100% $5,636 100% $5,531 5% 2% Cost of goods sold 2,485 42. 1 2,243 39. 8 2,234 10 0. 5 Gross Profit 3,418 57. 9 3,393 60. 3,297 1% 3 Gross Profit Marg in 57. 9% 60. 2% Selling, general and administrative expenses 2,257 38. 3 2,233 39. 6 2,135 1. 1 4. 4 Depreciation and amortization 126 2. 1 127 2. 3 117 (0. 1) 8 Other operating charges 11 0. 2 8 0. 1 (40) 27 84 Operating Income 1,024 17. 3 1,025 18. 2 1,085 (0. 1) (6) Operating Margin 17. 3% 18. 2% Interest Expense 114 1. 9 128 2. 3 243 (12) (89) Interest Income (3) (0. 1) (3) (0. 1) (4) Loss on early extinguishment of debt - - 100 1. 8 - Other income (loss) net (12) (0. ) (21) (. 04) (22) Income Before Income Taxes & Equity 925 15. 7 821 14. 6 868 13 (5) Income taxes 320 5. 5 294 5. 3 315 8 (7) Income in the first place Equity 605 10. 2 527 9. 4 553 13 (5) Equity in earnings of unconsolidated subsidiaries 1 - 1 - 2 Net Income 606 10. 3 528 9. 4 555 13 (5) Net Income per share Basic net income per share 2. 77 2. 19 2. 18 26 (. 01) Diluted net income per share 2. 74 2. 17 2. 17 26 (. 01) Retrieved from Dr Pepper Snapple Group 2010 and 2011 10k Repo rtsThe Dr Pepper Snapple Group definitely sees a significantly lower revenue standard than The Coca Cola Company, which can be seen as a bad thing because it means their market share isnt near what Coca Cola Companys market share is. Even though these companies are in the same pains, it seems that Dr Pepper Snapple Group just now isnt being able to keep up with the large company that the Coca Cola Company is. Yes, Dr Pepper Snapple Group is also seeing the same added expenses in the cost of goods sold, selling, administrative, and general expenses, but virtually at the percentage rate that he Coca Cola Company is. This means that their net income and their per share net income has grown considerably from 2010 to 2011, but remained around the same the year in the lead that. Comprehensive Financial balance Analysis Valuation dimensions DPS KO Indus fork up Earnings per share 2. 79 3. 78 P/E Ratio 16. 37 21. 17 20. 9 P/E High NA NA 2. 6 P/E Low NA NA 0. 8 Price to playscript 4 . 27 5. 72 5. 51 Price to Sales 1. 63 3. 87 2. 93 Price to Cash Flow 11. 3 16. 8 15. 4 Market Cap 9. 60B 180. 10B Dividends 1. 21 1. 88 Dividend Yield 2. 98 2. 55 Financial Ratios Current Ratio 0. 92 1. 05 1. 2 Quick Ratio 0. 7 1 0. 8 Leverage Ratio 3. 9 2. 6 2. 9 Book Value per share 10. 9 14. 34 13. 53 24. 3 17. 08 Total debt to asset 29. 17 35. 72 Lt debt to equity 99. 69 43. 17 Total debt to equity 119. 66 90. 31 108 Operating inflection Return on avg assets 6. 67 11. 29 8. 9 Return on avg equity 25. 67 27. 37 25. 74 Return on investment 8. 13 15. 77 13. 7 Margins Net profit margin 10. 25 18. 55 14. 16Gross margin 57. 9 60. 86 55. 48 EBITD margin 20. 85 27. 06 Operating margin 17. 35 23. 06 Retrieved from www. google. com/finance & www. investing. money. msn. com The Coca Cola Company has a higher return on investment percentage than Dr Pepper Snapple Group, which means that Coca Cola Company is generating more wealth out of the investments they are making. Both companies revenues are growing, though it seems that Coca Cola Company is again winning out in the growth category because they are growing at a large percentage.Within the past two years Coca Cola Companys revenue growth has been 13% and and so 33%, which seems to mean that even through economically tough times, Coca Cola Company is understood able to see large revenue than the year before. The Coca Cola Company is trading at approximately four times their price/earnings ratio, which shows that it is a strong company which shareholders expect the price to go up. Although Dr Pepper Snapple Group is trading for around three times their price/earnings ratio, shareholders also agree that they deplete a strong company.If you look at all of the analysis ratios, The Coca Cola Company is outperforming the industry in a number of different ratios. These include, but not throttle to, the average return on equity, average return on assets, criminal record value per share, the quic k ratio, the leverage ratio, net profit margin, and gross margin, just to name a few. It seems that because of this, barring something unforeseen, The Coca Cola Company will remain the leader in their industry, and a good solid investment for any investor. If you are just looking at these ratios, The Coca Cola Company would definitely be the investment choice you would desire to go with.However, there are other factors to be considered still. The Coca Cola Company 5 year Stock Valuation Chart Retrieved from www. thecoca-colcompany. com Dr Pepper Snapple Group 5 year Stock Valuation Chart Retrieved from www. nasdaq. com In analyzing the two stock charts above, both are showing results for the past five years, it seems that the trends in both stocks are about the same. There is a drop in October of 2009, which was the financial crisis that made all stocks drop, though both bemuse bounced natural covering up. Dr Pepper Snapple Group has seen an extremely higher stock price since bef ore the crisis, though it s still not valued at what The Coca Cola Companys stock price is valued. The Coca Cola Companys stocks check bounced back up, as previously stated, though not at the expansive amount Dr Pepper Snapple Group has since the ravage financial crisis. The Coca Cola Company is valued more than the Dr Pepper Snapple Group because although we think there may be a better time to dabble in the firms shares based on our DCF process, the firms stock has outperformed the market benchmark during the past quarter, indicating increased investor interest in the company (why Coca-Cola is worth, 2012).However, there is some estimation that if recent commodity price trends hold over the next quarter, Dr. Pepper Snapple (ticker DPS) should demonstrate significant earnings leverage in 2013 well in excess of current Wall Street estimates (Gerberi, Herzog, & Metrano, 2012). SWOT Analysis Strengths Coca-Colas key strategy is its excellence in emerging markets. It has secured s trong anchorage in emerging markets and in the lawsuit that the American market plummets, it will have a good detachment position (Bazil, 2012).This is a great thing, along with the fact that they are a global company. This gives them a position to be at the forefront of the beverage industry and allows them to see better revenues than others in the beverage industry. Dr Pepper Snapple Group, on the other hand, has a strength in the fact that they have seen a smaller increase in the cost of goods sold and other expenses than The Coca Cola Company. This is a strength because it means that the company has been able to halt costs, yet they still have the same quality of beverages they always have. WeaknessesDr Pepper Snapple Group has continued to be an American-centric beverage company and could use a more global outlook to add to profits and up their stock performance. This is a weakness because The Coca Cola Company is already out in the global market and has become the face of th e beverage industry from the United States. They are well known, and if Dr Pepper Snapple Group cant keep up with this, they will never be able to bring home the bacon the same financial situation that The Coca Cola Company has. The Coca Cola Company has seen a weakness in the fact that they harbourt been able to control costs throughout the economic level recently.They are seeing more revenues, but revenues are not all that matter in the business world. The Coca Cola Company should try to maintain a lower cost structure so that they have a better advantage, and a large net income. Opportunities Dr Pepper Snapple Group has a huge opportunity to go global with their beverages. They are currently thinking relatively small in the grand scheme of things and could use a global perspective to raise revenues and become a more proportional competitor to The Coca Cola Company. The Coca Cola Company has the opportunity to try to control costs.They need to be able to do this so they can s ee a larger net income and and money during these economically hard times. Companies that are not able to control costs will eventually not be able to make it in the business world because they will be paying prices that they gross revenue cannot keep up with. Threats The Coca Cola Company has a sizeable threat that could potentially affect them in the long run. If more of their competitors en neighboring the global market, they could see huge competition in this market than ever before.They are the main beverage company that has a large global presence, but other beverage companies will be looking, if they already arent, into acquire into the global market so that they compete with The Coca Cola Company revenue wise, and see the same larger revenue that global companies start see when they branch out to different areas of the world. Dr Pepper Snapple Group could see a threat of all others within the beverage industry signal detection on to their cost controlling methods. These methods would help other companies be able to compete better because they will be saving money and hopefully seeing higher revenues as well.This cost controlling, though now a warlike advantage, could very well become an industry norm in the future. Decision I feel that both companies should be invested in. There seems to be a relatively good stock market valuation for The Coca Cola Company and Dr Pepper Snapple Group, as well as good return on investment percentages relative to the beverage industry average. I think that fractional should be invested in The Coca Cola Company because it has a global presence and sees higher revenue and has a larger stock valuation, as well as a larger per share net income because of the larger revenues than that of Dr Pepper Snapple Group.I also think that the other half should be invested in Dr Pepper Snapple Group. I feel that this manufacturer completely has greater heights to attain, seeing as they have yet to have a huge global presence sin ce they are centered on their United States market. I feel that investing in their stock now, before they truly go global (which will happen because every company should start thinking on a global scale), would be the best case scenario because once they do start making a larger revenue due to global sales, they will probably see a higher return on investment, as well as a higher stock valuation.Implementation & Monitoring To implement this, you should contact your financial advisor. Your financial advisor will able to help you further prise the situation which I have laid out in this report. They will also be able to connect you with a stock broker, if you already do not have one. The stock broker will then help you invest your money in the way I have explained above. Then it would be advisable, in order to monitor your investment, that you also use your financial advisor who can better monitor the progress of your stock investment.If this is too expensive, then you could monit or the stock yourself through websites such as www. investing. money. msn. com, www. google. com/finance, or www. finance. yahoo. com. These, plus many more websites, are very laboursaving in monitoring your investment in the stock market. It is up to you whether you want to monitor it every day, once a week, twice a week, or once a month. Whichever you choose, make sure that you keep up with it and dont fret when stock prices take a slight drop. wrench money out too early, or when the stock is currently fall is never a good plan. ConclusionsWith this paper, I have learned that, conflicting to my belief, The Coca Cola Company are not comparative in size when it comes to revenue, or even the amount of different beverages they sell. They both, though, have comparative ratio analysis. They both are around the industry average, sometimes one is a little above and the other is a little infra and vice versa, but for the most part they are relatively close to the industry average. It seems that Dr Pepper Snapple Group has been able to control costs a little more effectively than The Coca Cola Company, but The Coca Cola Company has seen better revenues than the Dr Pepper Snapple Group.Both of these companies are on upward trends in the stock market, even though they are not similar by price. There is definitely a need to invest in both of these companies because each has their unique competitive advantage. The Coca Cola Companys competitive advantage is the fact that they are the leaders in the global beverage market, while Dr Pepper Snapple Groups competitive advantage is that is able to control costs more efficiently. They each have a large product line and could both benefit from learnedness from the other in different aspects of the business.Bibliography Bazil, M. (2012). Coca-Colas secret weapon. Retrieved from http//www. gurufocus. com/news/183815/cocacolas-secret-weapon. Coca Cola Company class 10k, 2010. (2011). Retrieved from www. sec. gov. Coca Cola Company Form 10k, 2011. (2012). Retrieved from www. sec. gov. Cooper, L. , Ford, W. , & Stephens, W. (2007). Coca-Cola case study An ethics incident. The Archive of Marketing Education. Retrieved from www. marketingpower. com. Dr Pepper Snapple Group. (n. d. ). Retrieved from www. wikipedia. org.Dr Pepper Snapple Group Form 10k, 2010. (2011). Retrieved from www. sec. gov. Dr Pepper Snapple Group Form 10k, 2011. (2012). Retrieved from www. sec. gov. Gerberi, J. , Herzog, B. , & Metrano, B. (2012). Beating the global heat with Dr. Pepper Snapple. Retrieved from http//online. barrons. com/article/SB50001424053111903857104577462982562697696. html interpret Data. (2012). Retrieved from www. google. com/finance. Graph Data. (2012). Retrieved from www. investing. money. msn. com. Graph Data. (2012). Retrieved from www. hecoca-colacompany. com. Graph Data. (2012). Retrieved from www. nasdaq. com. Graph Data. (2012). Retrieved from www. yahoo. com. Investors. (n. d. ). Retrieved from www. investor. drpeppersnapple. com. The Coca Cola Company. (n. d. ). Retrieved from www. wikipedia. org. Why Coca-Cola is worth $70 per share. (2012). Retrieved from http//seekingalpha. com/article/755581-why-coca-cola-is-worth-70-per-share? source=marketwatch Appendix A Accounting Research Paper Supporting Files PDF Files Word/Rich Text Files