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Coca-Cola vs PepsiCo

Coca-Cola vs PepsiCo. 閻雲襄 施 士檳 池 玫霖 潘 皓天 陳 采韓 鄭 亦栴. The timeline of Coca-Cola. Spun off bottling operations. 1985. 1993. The top or second wealth creators in Fortune’s annual ranking. 1998. Rose the syrup price , Income fell by 41%. 1999. Worked on noncarbonated beverage. 2000.

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Coca-Cola vs PepsiCo

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  1. Coca-Cola vs PepsiCo 閻雲襄施士檳池玫霖潘皓天陳采韓鄭亦栴

  2. The timeline of Coca-Cola Spun off bottling operations 1985 1993 The top or second wealth creators in Fortune’s annual ranking 1998 Rose the syrup price, Income fell by 41% 1999 Worked on noncarbonated beverage 2000 Coca-ColaMV:$110billion

  3. The timeline of Pepsi Sold off all of its fast-food chains 1997 1998 Acquired Spun off the capital-intensive bottling operpertonsinto an independent public company 1999 PepsiCo finished the M&A with Quaker Oats 2000 PepsiCoMV:$20billion

  4. Industry Overview Grown by 62% in volume last 5 year Noncarbonated beverage Owns some leading brands in noncarbonated beverage market

  5. OR

  6. Two way to evaluate Better • “profit” net of interest expense on debt capital • true economic profit of company • “profits” net of the full cost of debt and equity capital.

  7. EVA • EVA = ( Return on invested capital – WACC )* Invested Capital Return on invested capital = NOPAT / Invested Capital WACC = Kd (1-t)* + Ke*

  8. NOPAT • NOPAT= OPERATING INCOME * ( 1 – T ) • The cash flow by is generated by operating activity after tax

  9. NOPAT-Pepsi NOPATIS the Cash generate by Real Operating Activity.

  10. Invested Capital(The capital that we invested ) Calculation Method • Asset Side • Debt and Equity, near capital item Side Adopt Debt and Equity Method

  11. Invested Capital – Pepsi(Debt side)

  12. Invested Capital – Pepsi (Equity Side) • Accumulative Goodwill Amortization is the premium value which is cost by M&A • Cash & Equivalents and Marketable securities Are not for operating use, thus deduct.

  13. Return on invested Capital-Pepsi

  14. WACC-Pepsi

  15. EVA Present Value- Pepsi WACC (Year 2001) =8.11%

  16. EVA Present Value- Pepsi EVA：$8,004.98 EVA Present Value = 2773/(1+8.11%)+3111/(1+8.11%)^2+3510/(1+8.11%)^3

  17. WACC-Cola

  18. Return on invested Capital-Coco Cola

  19. EVA Present Value- Coco Cola WACC (Year 2001) =9%

  20. EVA Present Value- Coco Cola EVA ： $7638.24 EVA Present Value = 2708/(1+9.92%) + 3151/(1+9.92%)^2 + 3410/(1+9.92%)^3

  21. EVA outcome

  22. EVA The non-carbonated drink went skyrocketed !!!

  23. Operating Income = Operating * Quality

  24. Operating Income EVA = NOPAT – Cost of Capital influence NOPAT influence EVA influence Worth investing

  25. Invest pepsi

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