Analysis of Pepsi Company Limited Assignment Example | Topics and Well Written Essays - 1000 words

Analysis of Pepsi Company Limited - Assignment Example The strategy used by the company indicates that the management is in the process of creating action plans that try to augment the market share and take the lead competitor position in the soft drinks industry. The company tries to do this by increasing operations in all major cities of the world to rival the global presence of Coca-Cola Company. b) The annual report also points out the fact the company uses the straight line on both depreciation and amortization, a factor which means that the company does not use reducing balance method (PepsiCo, 2010). When the different depreciation methods are compared, it can be seen that the straight-line method is the best for this type of company. This is because the straight-line method allocates the usefulness of the assets to the most productive life of the asset, meaning that when the asset is near obsolete, the depreciation allocated to the asset is small compared to the earlier life of the asset. Conversely, the reducing balance method of depreciation allocates depreciation according to the value of the asset, which ends up allocating depreciation even when the asset is near obsolete. The company also uses the straight-line method to amortize assets, loans and allocate capital expenditure. c) From the annual reports released in the fiscal year ended December 2010, the par value of Pepsi Company common stock is 1 2/3 pence per share (PepsiCo, 2010). This par value reflected by the financial statements of the company indicates that the value has remained constant since the company announced a stock split in 1996, which means that the share data have been adjusted to reflect the stock split. The par value of the shares has remained constant since the period, and capital in excess of the par value is reduced to reflect the increase in par value occasioned by the value of additional shares issued.