ACC 423 week 1 rewrite it (12 slides)
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ACC423Week1Coca-ColaandPepsiCoPresentation2.pptxCoca-Cola and PepsiCo Presentation
ACC/423
http://www.coca-cola.com/global/
http://www.pepsico.com/
1
What is the par or stated value of Coca-Cola's and PepsiCo's common or capital stock?
What percentage of authorized shares was issued by Coca-Cola at December 31, 2014, and by PepsiCo at December 31, 2014?
How many shares are held as treasury stock by Coca-Cola at December 31, 2014, and by PepsiCo at December 31, 2014?
How many Coca-Cola common shares are outstanding at December 31, 2014?
How many PepsiCo shares of capital stock are outstanding at December 31, 2014?
Coca-Cola and PepsiCo Presentation
In this presentation we will be covering the questions you see here and on the next slide.
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What amounts of cash dividends per share were declared by Coca-Cola and PepsiCo in 2014?
What were the dollar amount effects of the cash dividends on each company's stockholders' equity?
What are Coca-Cola's and PepsiCo's return on common/capital stockholders' equity for 2014 and 2013?
Which company gets the higher return on the equity of its shareholders?
What are Coca-Cola's and PepsiCo's payout ratios for 2014?
What was the market price range (high/low) for Coca-Cola's common stock and PepsiCo's capital stock during the fourth quarter of 2014?
Which company's (Coca-Cola's or PepsiCo's) stock price increased more (%) during 2014?
Coca-Cola and PepsiCo Presentation
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Coca-Cola and PepsiCo's Common or Capital Stock
Coca-Cola -- Common/Capital Stock
Common Stock Par Value is .25 cents per share.
PepsiCo -- Common/Capital Stock
Common Stock par value is 1 2/3 cent per share.
Converted $ 1.6667
http://www.coca-cola.com/global/
http://www.pepsico.com/
If you look at the comparison between the two common stocks of Coca-Cola and PepsiCo, you see that the par value of Coke is more than Pepsi. For the Coke Company, their share is .25 cents per share while Pepsi is 1 2/3 cents per share or $1.6667 or almost two cents per share. So Coca-Cola pays a full .23 cents more than PepsiCo (Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company"), (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
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Percentage of Authorized Shares
| Issued | Authorized | Percentage |
| 7040 | 11200 | 62.86% |
Coca-Cola
December 31, 2014
PepsiCo
December 31,2014
| Issued | Authorized | Percentage |
| 1488 | 3600 | 41.33% |
https://us.coca-cola.com/
http://www.pepsico.com/company
“
As far as authorized shares go, Coca-Cola has authorized 62.86 %. This is from the 7040 million shares that were issues divided by the 11200 million that the company had authorized in 2014 (Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company").
In comparison, PepsiCo, had only 41.33 % of shares. This was also taken from the 1488 million shares that were issued and divided by the 3600 million shares that were authorized in 2014 (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
When you look at the two companies, we can obviously see that Coca-Cola authorized more shares and has higher percentage of authorized shares.
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Treasury Stocks Held
Coca-Cola
December 31,2014
Total of Treasury Stock was 2,674 million of shares.
PepsiCo
December 31,2014
Total Treasury Stock was 378 million of shares.
http://www.coca-colacompany.com/content/dam/journey/us/en/private/2015/02/contour-100-bottle-line-up-604-604-337-bfeb9c41.jpg
http://foodravel.com/wp-content/uploads/2015/10/pepsi-bottle-1.png
Again, here, for treasury stocks held by Coca-Cola has 2,674 million of shares. Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company").
And, just like the authorized shares, PepsiCo, had only 378 million of shares of treasury stock. (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
The comparison between the two companies show that Coca-Cola has more treasury shares than PepsiCo, the difference in the companies is 2,296 million of shares.
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Common Shares Outstanding:
Common Shares outstanding:
Coca-Cola
December 31, 2014
4,387 million shares.
PepsiCo
December 31, 2014
1,488 million shares.
https://aoghs.org/wp-content/uploads/2013/06/CocaCola-stock-aoghs.jpg
http://www.kabukencafe.com/images/large/Pepsi%20lg.jpg
When we look at the two companies, Coca-Cola has 4,387 million of shares of common stock that is considered is outstanding. Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company"). And, PepsiCo had only 1,488 million of shares of common stock that the company considered to be outstanding.. (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
The difference between the two companies show that Coca-Cola has more common stock outstanding than PepsiCo. The difference in the companies is 2,899 million of shares held outstanding by Coca-Cola.
Picture 1: https://aoghs.org/wp-content/uploads/2013/06/CocaCola-stock-aoghs.jpg
Picture 2: http://www.kabukencafe.com/images/large/Pepsi%20lg.jpg
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Dividends per Share Declared
Coca-Cola for 2014
PepsiCo for 2014
Coca-Cola dividends per share were $1.22
PepsiCo dividends per share were $2.5325
http://www.naturalnews.com/wp-content/uploads/sites/91/2017/05/Computer-Coca-Cola-Money.jpg
https://dncache-mauganscorp.netdna-ssl.com/thumbseg/927/927136-bigthumbnail.jpg
The declared dividends for Coca-Cola were $1.22 per share to their shareholders in 2014. Coca-Cola would have paid out $8,588,800 in dividends to their stockholders in 2014 (Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company").
When we look at PepsiCo, on the other hand, provided their shareholders at $2.5325 per share. During the same time period, PepsiCo would have paid $3,768,360 in dividends to their shareholders (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
When we look at the comparison between the two companies, Coca-Cola has more shares of stock issued but they are paying out less dividends than PepsiCo is to their shareholders. PepsiCo shareholders are making $1.3125 more per share than Coca-Cola shareholders.
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Cash Dividends on Stockholder’s Equity
Coca-Cola
2013 & 2014
PepsiCo
2013 & 2014
Decrease in the Retained Earnings
Decrease in Reinvested Earnings
https://d.stockcharts.com/img/articles/2016/03/14576706120491682893265.png
https://static.seekingalpha.com/uploads/2017/5/2/saupload_1257f732c401396d81f12129dff7d5f6.png
In the years, 2013 & 2014, Coca-Cola had a decrease in their reinvested earnings. This is due to them providing dividends to their shareholders in both years. The amount of the dividends increase from 2013 to 2014, so the company would have less money to reinvest (Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company").
However, PepsiCo, also had a decrease in their retained earnings for 2013 and 2014 as they also provided dividends to the shareholders (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
When you look at the contrast of the two companies, both had less money that was reinvested. If the companies did not pay out dividends to their shareholders, they could have reinvested into their companies.
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| Year | Net Income | Average Common Equity | Rate of Return |
| 2014 | $7,124,000.00 | $30,320,000.00 | 23.50% |
| Year | Net Income | Average Common Equity | Rate of Return |
| 2013 | $8,626,000.00 | $33,173,000.00 | 26.00% |
Return on Common/Capital Stockholders Equity
PepsiCo Rate of Return for 2013 & 2014
Coca-Cola Rate of Return for 2013 & 2014
| Year | Net Income | Average Common Equity | Rate of Return |
| 2014 | $6,558,000.00 | $17,578,000.00 | 37.31% |
| Year | Net Income | Average Common Equity | Rate of Return |
| 2013 | $6,787,000.00 | $24,409,000.00 | 27.81% |
The formula for rate of return on common stocks is found by using:
Net Income/Average Common Equity= Rate of Return
When you compare the two companies, both companies provide a good rate of return on the stock that they have issued. However, PepsiCo does provide their shareholders with a better rate of return than Coca-Cola does to their shareholders. So, in this case, it looks better to be a PepsiCo shareholder than Coca-Cola shareholder (Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company"), (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
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| Year | Dividends Paid | Net Income | Payout Ratio |
| 2014 | $5,350,000.00 | $7,124,000.00 | 75.10% |
Payout Ratios
PepsiCo
2014
Coca-Cola
2014
| Year | Dividends Paid | Net Income | Payout Ratio |
| 2014 | $3,730,000.00 | $6,558,000.00 | 56.88% |
The formula for Payout ratio is:
Dividends Paid/Net Income = Payout Ration
Looking at the two companies, both companies provide a good payout ratio because both are over 50%. However, this time, Coca-Cola provides a better payout at 75.10%, compared to PepsiCo‘s 56.88%. So, Coca-Cola is providing 18.22% more of a payout than PepsiCo (Kieso, Weygandt, & Terry D. Warfield, 2016, "Specimen Financial Statements: The Coca-Cola Company"), (Kieso, Weygandt, & Terry D. Warfield, 2016, Specimen Financial Statements: PepsiCo, Inc.).
11
Market Range for Common/Capital Stock in Fourth Quarter
Pepsi
2014
Coca-Cola
2014
High $45.00
Low $39.80
High $100.70
Low $ 89.82
http://www.marketwatch.com/investing/stock/KO
http://www.marketwatch.com/investing/stock/pep
In their filing of their 10 K form in 2015, Coca-Cola listed in their fourth quarter, their high common market price was $45.00 and the low for the same period was $39.80. They declared dividends during that period at 0.305 ("United States Securities And Exchange Commission Washington, D.C. 20549 Form 10-K ý Annual Report Pursuant To Section 13 Or 15(d) Of The Securities ", 2015).
In PepsiCo’s filing of their 10 K form in 2015, they listed that in their fourth quarter, the high common market price was $100.70 and the low for the same period was $89.82. They declared dividends during that period at 0.655 ("Pepsico, Inc. Annual Report On Form 10-K", 2015).
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THANK YOU
References
Kieso, D. E., Weygandt, J. J., & Terry D. Warfield, T. D. (2016). Intermediate Accounting
(16th ed.). Retrieved from https://phoenix.vitalsource.com/#/books/9781119175179/cfi/6/2!/4/2/2/6@0:0.
PepsiCo, Inc. Annual Report on Form 10-K. (2015). Retrieved from
http://www.pepsico.com/docs/album/annual-reports/pepsico-2015-annual-report_final_s57dqszgmy22ggn.pdf?sfvrsn=0
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES. (2015). Retrieved from
http://coca-cola-ir.prod-use1.investis.com/~/media/Files/C/Coca-Cola-IR/documents/financial-reports/2015-annual-report-on-form-10k.pdf
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