I need help with the strengths and weaknesses part Group Project 3 - Team DriveX
ID: 2515081 • Letter: I
Question
I need help with the strengths and weaknesses part
Group Project 3 - Team DriveX Group Projoct 3 Workpaper.xis X C Group Project 3-Team Drivex x Course: ACC122 DIL 01 and 02- x+ ? https://docs.google.com/spreadsheets/d/1JbFZSUhn5bz8tgB9Dew TrGn4rA2Q-olzSBatzhlQ2VM/edit#gid-1922977229 ? Group Project 3 Workpaperxls File Edit View Insert Format Data Tools Add-ons Help Last edit was vestorday at 6:25 PM SHAREA n~ ?P 100%, s %0.00 123, Arial B!??*,?EE '?.1÷.ry.”OD] ? , ? Group Name's Vertical Analysis 10 Computations Pepsi 45.00% 55.00% 38.00% 17.00% 8.00% Coke Cost of Revenue Total Revenue)13256000/35410000 (Gross ProfitTotal Revenue)22154000/35410000 (Selling, gen and administrative expenses Total Revenue)14653000/35410000 (Operating Income Total Revenue)14653000/35410000 (Net 37.00% 63.00% 41.00% 21.00% 4.00% 13 t Income/Total Revenue)1248000.00/35410000 16 Pepsi (Cost of Revenue/Total Revenue)28785000/63525000 (Gross Profit Total Revenue)34740000.00163525000 (Selling, gen and administrative expenses Total Revenue)24231000.00/63525000 (Operating Income /Total Revenue)10509000.00/63525000 (Net IncomerTotal Revenue)4857000.00/63525000 18 19 Prob. 1-1 Prob. 1.2-5Prob. 1-6 Prob 1-7 PROB. 2Explanation / Answer
Strength:
Coke:
- At a total revenue of $35.4 million, Coke carries the lower Cost of Goods sold which indicates its strength.
- G.P. ratio for Coke is better than Pepsi but at a lower base of revenue. Expanding further maintaing the same cost of goods sold ratio will help to maintain the G.P. Ratio.
Pepsi:
- Pepsi has much better fucntions laid down in Selling, Admin and General departments. With their efforts, the cost as a percentage of total revenue is low at such a higher base of revenue as compared to Competitor.
- Note that Current ratio is 1.51 in case of Pepsi which means that Current aseets are 1.5 multiple of current liabilities. 1.34 in case of Coke is not bad but less as compared to Pepsi. At such a high level of revenue, Pepsi is incredible to maintain a good current ratio and liquidity.
Above strengths add on to the Final Net profit ratio of both the companies.
Weakness
Coke:
- Coke incurs high selling, general and admin expenses as compared to Pepsi. Coke needs to relook onto why the ratio is deviating as compared to competitor.
- Coke needs to work on to its Current ratios since the revenue is also lower as compared to Pepsi.
Pepsi:
- At a total revenue of $63.5 million (greater than Coke), Pepsi incurs the Cost of Goods sold as 45% of revenue while Coke incurs just 37%. Pepsi need to do its segmental/departmental/divisional/regional cost analysis and see where they can lower down the cost of Goods sold.
The weakness mentioned above are major contributor to the financials of both the companies.