Coca Cola and Pepsi Profitability Analysis
Gross Profit Margin (USD $ in Millions)
Source: Coca-Cola Co. Annual Reports
Gross profit margin(2013) = 100 × 28,433/46,854 = 60.68%
Gross profit margin(2012) = 100 x 28,964/ 48,017=60.32%
Gross profit margin(2011) = 100 x 28,326 = 60.86%
Source: PepsiCo Inc. Annual Reports
Gross profit margin (2013) = 100 x 35,172/66,415 = 52.96%
Gross profit margin (2012) = 100 x 34,201/65,492 = 52.22%
Gross profit margin (2011) = 100 x 34,911/66,504 = 52.49%
Gross profit margin is a resource for paying extra expenses and future cutbacks. Coca-Cola Co. gross profit margin declined from 2011 to 2012 but then inclined from 2012 to 2013. However, it did not reach the level of 2011. PepsiCo Inc. 's gross profit margin, on the other hand, decreased from 2011 to 2012 however it improved from 2012 to 2013 go over 2011’s level. Comparing the two companies, Coca-Cola Co. has a higher gross profit margin which shows superior fraction of revenue existing to coat operating and other costs.
Net Profit Margin (USD $ in Millions)
Coca-Cola Co.
2013
2012
2011
Net Income Before Minority Share of Earnings, Equity Income, and Nonrecurring items
8,584
9,019
8,572
Net Sales
46,854
48,017
46,542
Net Profit Margin
18.32 %
18.78 %
18.42 %
Source: Coca-Cola Co. Annual Reports
Net Profit Margin (2013) = 100 x 8,584/ 46,854 = 18.32%
Net Profit Margin (2012) = 100 x 9,019/48,017 = 18.78%
Net Profit Margin (2011) = 100 x 8,572/46,542 = 18.42%
PepsiCo
2013
2012
2011
Net Income Before Minority Share of Earnings, Equity Income, and Nonrecurring Items
6,740
6,178
6,443
Net Sales
66,415
65,492
66,504
Net profit margin
10.15 %
9.43 %
9.69 %
Source: PepsiCo Inc. Annual Reports
Net Profit Margin(2013) = 100 x 6,740/66,415 = 10.15%
Net Profit Margin(2012) = 100 x 6,178/65,492 = 9.43%
Net Profit Margin(2011) = 100 x 6,443/66,504 = 9.690%
Net profit margin is an indicator ``of profitability, computed as net income divided by
Source: Coca-Cola Co. Annual Reports
Gross profit margin(2013) = 100 × 28,433/46,854 = 60.68%
Gross profit margin(2012) = 100 x 28,964/ 48,017=60.32%
Gross profit margin(2011) = 100 x 28,326 = 60.86%
Source: PepsiCo Inc. Annual Reports
Gross profit margin (2013) = 100 x 35,172/66,415 = 52.96%
Gross profit margin (2012) = 100 x 34,201/65,492 = 52.22%
Gross profit margin (2011) = 100 x 34,911/66,504 = 52.49%
Gross profit margin is a resource for paying extra expenses and future cutbacks. Coca-Cola Co. gross profit margin declined from 2011 to 2012 but then inclined from 2012 to 2013. However, it did not reach the level of 2011. PepsiCo Inc. 's gross profit margin, on the other hand, decreased from 2011 to 2012 however it improved from 2012 to 2013 go over 2011’s level. Comparing the two companies, Coca-Cola Co. has a higher gross profit margin which shows superior fraction of revenue existing to coat operating and other costs.
Net Profit Margin (USD $ in Millions)
Coca-Cola Co.
2013
2012
2011
Net Income Before Minority Share of Earnings, Equity Income, and Nonrecurring items
8,584
9,019
8,572
Net Sales
46,854
48,017
46,542
Net Profit Margin
18.32 %
18.78 %
18.42 %
Source: Coca-Cola Co. Annual Reports
Net Profit Margin (2013) = 100 x 8,584/ 46,854 = 18.32%
Net Profit Margin (2012) = 100 x 9,019/48,017 = 18.78%
Net Profit Margin (2011) = 100 x 8,572/46,542 = 18.42%
PepsiCo
2013
2012
2011
Net Income Before Minority Share of Earnings, Equity Income, and Nonrecurring Items
6,740
6,178
6,443
Net Sales
66,415
65,492
66,504
Net profit margin
10.15 %
9.43 %
9.69 %
Source: PepsiCo Inc. Annual Reports
Net Profit Margin(2013) = 100 x 6,740/66,415 = 10.15%
Net Profit Margin(2012) = 100 x 6,178/65,492 = 9.43%
Net Profit Margin(2011) = 100 x 6,443/66,504 = 9.690%
Net profit margin is an indicator ``of profitability, computed as net income divided by
References: Wintner, S., Tardif, M. (2006)Financial Management for Design Professionals: The Path to Profitability. MA: Kaplan AEC Education. Retrived from: http://finance.yahoo.com/news/abercrombie-fitch-no-profits-just-225850116.html?&session-id=7b3af266ae1a387aaf0cfe6dca24ba10 Gibson, C. (2009)Financial Reporting & Analysis. Using Financial Accounting Information (11the Ed) MA: South-Western Cengage Learning, Mason,OH