Coke-Cola Company performance with a close comparison to PepsiCo
Financial innovation has impacted on introduction of different finance products. This has impacted on enhancing investor’s freedom to choose from different investments options available in the market. Investors will have different risks altitudes and therefore, they will be able to select products which fit their needs. In most cases, Investors will often seek proper advice from investments advisory bodies prior to making investments decision. This will lower risks level as experts are well equipped with critical information on stock historical trend and can be able to make a more accurate projections.
Similarly to individual investors, banks are also very cautious prior to extending credit to companies. Credit rating is mainly used in accessing credit worthiness of a given company. This will possibly impact on excluding some companies from accessing the much needed finances. This is common where value of creditors outweigh debt owed to the company. This will however minimize potential risks to the bank incase a company fails to meet debt obligation.
It is important to note that all investments are made in the current period with potential benefits to be realized in future. Also, value of investments today may either appreciate or depreciate depending on different market and economic happenings. Banks and other interested stakeholders have been largely utilizing value for money technique in evaluating expected returns in future. Financial projections are also calculated based on expected value of returns in future.
This research paper explores Coke-Cola Company performance with a close comparison PepsiCo. Financial performance is analyzed together with stock performance in both companies. Credit rating as applied by the banks is also discussed.
According to value for money ideology, returns from investments should outweigh costs of investments. A higher risk margin should therefore, be compensated with a higher expected returns. This indicates that risk levels should be directly related to expected returns. Investors are also interested in buying stocks which are likely to appreciate in value in future. Other factors such liquidity of stocks acquired are also a critical consideration.
Credit worthiness is an important factor majority of banks have been using to access amount of risks involved when extending loans to companies. Banks will demand higher interests where the risk level involved is relatively high. Total assets as compared to other liabilities mainly long term are used to evaluate credit worthiness of a customer. Therefore, companies should ensure they acquire the best and most optimal capital mix attractive to all stakeholders.
- Quote paper
- Dr Kelly Clarkson (Author), 2011, Coke-Cola Company performance with a close comparison to PepsiCo, Munich, GRIN Verlag, https://www.grin.com/document/213090