Valuation Research Paper Example | Topics and Well Written Essays - 1750 words

Valuation - Research Paper Example In 2011, Coca-Cola was also recognized as the most valuable brand in the world on the basis of Interbrand’s best global brand. Pepsi Corporation Pepsi Corporation is another American based multinational enterprise that operates in the food and beverage industry. Headquarter of Pepsi is in Purchase, New York. The company was formed in 1965 and since that time it has expanded its brands to more than 200 countries. Pepsi is the fifth largest food and beverage company in the world in terms of total revenue however in the North American region it is the largest company. There are more than 285 thousand employees working for Pepsi around the world. INDUSTRY ANALYSIS Food and beverage industry includes food production, distribution, retailing and catering of food and beverages. The total value of this industry in the year 2008 was $5.7 trillion. The growth rate of the industry is expected to increase at a CAGR of 3.5% and it is estimated that the total value of this industry would re ach up to $7 trillion by the end of 2014 (IMAP, 4). As other industry suffered because of financial crisis, food and beverage industry was also one of the victims of recession. ... Cola Corporation is considered to be the seventh most important company in the industry with total revenue of $31.9 billion and net income of $5.8 billion. The industry is lead by Nestle with total revenue of $101.8 billion which has grown by 13.5% in 2010 from 2009. The net profit of Nestle in 2010 was $16.7 billion. Other important players in the market are Bunge ltd, Unilever Archer-Daniels Midland Kraft Foods Tyson Foods Mars Inc Kirin Holdings etc. The future of this industry is bright as the economy is currently recovering from recession and many companies are planning to expand their businesses and acquire firms in the industry. Pepsi acquired a Brazilian based coconut water manufacturer company, Amacoco Nordeste while minority shares of Zico LLC were bought by Coca Cola thus reflecting potential in the industry. S&P 500 and Dow Jones US indexes indicate that the industry would grow with the passage of time as it is reflected in the following graph. (Source: IMAP, 4) FINANCIAL ANALYSIS Financial Highlights of Coca-Cola The revenues of Coca Cola Company have increased in 2010 from 2009 by 13% which has helped the company in improving its profitability considerably by 73%. The revenues of the company although decreased in 2009 in comparison to 2008 but still the company was able to generate 18% more profits than 2008 which reflected that the company was able to cut off several expenses and costs. In addition to this, the earning per share of the company has been increasing with an increasing rate since 2008. Earning per share increased by 18% in 2009 and then it increased by 74% in 2010 reflecting positive future of the company. 2010 Change in % 2009 Change in % 2008 Revenues 35,119 13% 30,990 -3% 31,944 Operating Profit 8,449 3% 8,231 -3% 8,446 Net Profit 11,809