PepsiCo has shown the best current ratio and is able to pay off their debts, which Coca-Cola does not have that and is struggling to pay off their debts. However, Coca-Cola has a higher retained earnings percentage, which means that it is able to have funds available for future growth of the company. The hope for both companies is to provide their financial statement with better information presented over their competitor giving the ability to earn more investors. PepsiCo and Coca-Cola do not need to be at war with each other as they have what it takes to get people to use both products, no matter what. Keep in mind, that it is the people’s choice whether or not to support a company and decide whether to invest in the company not competing against each
Here are the findings for question 2: 1. The CLM (Combined Leverage Multiplier) for Kroger that year was 3.720 (= 4.477 financial structure leverage X 0.831 common earnings leverage). In contrast to a CLM of 2.745 for Safeway. 2. Kroger has greater ROA performance at 6.4% in comparison to 6.0%.
1. What is meant by the term ‘economies of scale?’ The increase in efficiency of production as the number of goods being produced increases. Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods. 2. Explain why economies of scale are important to companies such as McDonald’s and GBK.
Beer Brewers Industry Analysis 1 of 17 M E M O R A N D U M Date: April 16, 2008 Subject: Beer Brewer Industry Analysis To: Dr. Matt Ford From: Liz Boeing Brian Casey Jeff Colson John Cropenbaker David Edwards Craig Lyons Tom Poe Andy Rauf Industry Analysis of Beer Brewing Industry This report will provide an industry analysis for the beer brewing industry, discussing the attractiveness of the industry in regards to sustainable profitability. We will first give background on the industry, and then will use Porter’s Five Forces, a tool that will help us to determine the attractiveness of the industry. Industry Background Industry name. The industry that we chose is the beer brewing industry, and we are focusing on operations based in the United States. We chose to focus on a larger scope because the top three competitors in this industry control about 90% of the market.
The Marketing Plan Product or Service Concept The difference between craft and generic beer is widely known to beer connoisseurs and aficionados. The varied tastes and quality brews are what set craft beers above mass-produced generic beers. The craft beer industry has seen a unique following since the 1970s and its popularity doesn’t seem to be dissipating. In fact as of 2013, craft beer has experienced a 13.9% growth rate over 4.6% for super premium beer and 2.8% for imported beer (Demeter 2013). The restaurant industry is experiencing a similar growth spurt as the craft beer industry.
The NPV for purchasing the technologies is 94.71 million and the NPV for developing the technologies is 127.24 million. From this point, developing the technologies is a better choice. 3. IRR (Internal Rate of Return), which indicates the annual rate of return on an investment that assumes we could reinvest the cash flow at the same return. The IRR for purchasing and development are 18.88% and 24.57% respectively.
d) The equilibrium interest rate increases to bring desired investment into equilibrium with the reduced quantity of national saving. e) The equilibrium quantity of investment is reduced via the increase in the interest rate by an amount equal to the increase in government spending. Question 5 (15 marks) a) capital is added. No, MPK does not diminish because it does not decline as more is also acceptable. b) L = 100: L = 110: L = 120: 0. .
The profit percentage of assets varies by industry, but in general, the higher the ROA the better. We can see a good trend over years in the company. Comments: Return on equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity. The formula for ROE is: ROE is more than a measure of profit; it's a measure of efficiency. A rising ROE suggests that a company is increasing its ability to generate profit without needing as much capital.
Over the past two years, Starbucks has improved this ratio, showing strength and stability. Starbuck’s debt ratio for 2014 was .51, and .61 in 2013. The debt ratio provides a measurement of how much of a firm’s assets were financed by borrowing, or debt financing. A higher ratio indicates more outside financing, whereas a lower ratio indicates more assets were acquired using cash, or owner financed. Borrowing gives a company financial leverage, and can improve credit rating.
In 2013, GE generated 53% of total sales abroad and thus has successfully evolved from a domestic corporation to a multinational conglomerate, through aggressive mergers and acquisitions and further foreign direct investments. GE’s current financial outlook is less optimistic than that of its main competitors. One cause for this observation might be GE’s ongoing restructuring from a financial institution to an industrial manufacturer causing a negative impact on sales until recently. Also, competitors seem to operate more profitably, given their higher ROA and ROE ratios, and they carry lower debt levels than GE. However, current indications of an upturn include GE’s EBITDA-margin that has continuously been above that of