Progress Report 1: PepsiCo
PepsiCo is a worldwide known food and beverage company. The ticker symbol for PepsiCo is PEP and stock trades at the New York Stock Exchange. The purpose of the auditor’s report is to provide an opinion assuring that the financial statements are correct and that the company is using them effectively in agreement with the generally accepted accounting principles (GAAP). The auditors provide the opinion by better understanding the internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating ...view middle of the document...
PepsiCo’s main beverage competitor is Coca-Cola Company and the main food competitors are Nestlé S.A., Danone, DPSG, Kellogg Company, General Mills, Inc. and Mondelēz International, Inc. (PepsiCo, 2012 Annual Report, p. 39). The closing price for PepsiCo on Friday, March 1, 2013 was $75.93.
Developments relating to the Company
PepsiCo has been a well-established company for several years. Their products are all recognized and have a relatively steady demand. They try to increase their demand by creating new products. Surprisingly, over 50% of their revenue is made from the sale of food. They continue to implement new products and try to reach a larger target market. Also, they have expanded their products globally and their market continues to expand. They now have 22 brands that each make over a billion dollars a year. In 2012 PepsiCo added Diet Mountain Dew, Starbucks Ready-to-go, and Brisk teas. PepsiCo also expanded to Myanmar in 2012 partnering with Diamond Star one of the largest distributors of packaged goods. On a reported basis, operating profit in 2012 decreased by 5% compared with previous year due to factors such as strategic investments, higher commodity costs, higher advertising and marketing expense and unfavorable foreign exchange, which were partially offset by effective net pricing. With more investments, advertising and marketing expenses, it can be said that Pepsi is expected to yield higher income in the future.