Our Chosen Company: PepsiCo
Competitor: Coca Cola Company
1. Provide a brief company background for your company including a descriiption of the products, services, divisions, number of employees, and other information you may find relevant.
2. Provide the same information in question 1 for the competitor(s) that you chose to analyze.
3. Is your company likely to need additional external financing in the next few years? Following are the required elements for answering this question: 1) provide your financial planning model for the next 3-5 years. It is not necessary to forecast the balance sheet. Focus on income statements and cash flow statements only. Use a version of the financial planning model that we studied in the lectures for Pepsico. To implement this model, you will need to forecast future financial statements (for the next 3-5 years). Capital IQ has forecasts of future revenues, profits, capital expenditure ready for you in the tab called “Estimates”/ “CIQ Estimates”, which you can use directly. Yahoo Finance also contains some forecasts of future revenues and earnings that may help you. You can use a percentage of revenues model to forecast other financial statement items (but feel free to use other reasonable methods if you prefer). The hardest items to forecast are capital expenditures (and other investments). Feel free to extrapolate past trends, or make reasonable assumptions about future investment needs. However, whenever possible, use the Capital IQ forecasts on revenue, profits, and capital expenditure rather than trying to forecast on your own. 2) Discuss all the assumptions that you made. 3) Examine the implications of the net change in cash as we did in the lectures and from there conclude whether your company is likely to need additional external financing in the next few years.
