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Pepsi The Figures From Pepsi's Income Statement Essay

Pepsi The figures from Pepsi's income statement are as follows:

Pepsi

% change

% change

Revenue

Net Income

The figures from Pepsi's balance sheet are as follows:

Pepsi

% change

% change

Total Assets

Total Liabilities

There are a few different conclusions we can draw from these figures. First, it is important to understand what these terms mean. Revenue is how much money we brought in. Net income is how much is left after the bills have been paid. Assets are everything the firm owns; liabilities are how much it owes. What's left over after that is the equity, which is the value of the firm that the shareholders have. The price of the stock is based in part on the value of the equity of the firm.

The income statement tells us how much money we...

In both cases, Pepsi did worse in 2012 than in the year previous. So while 2011 saw improvements, Pepsi took a step backwards in 2012. One thing that stands out is that Pepsi's net income declined more than its revenue. This means that the expenses increased in 2012, because net income is the revenue less the expenses. For Pepsi, this is important, because improving net income in the future will mean not only increasing revenue, but cutting expenses back to the previous level.
The balance sheet is a little bit different than the income statement in what it tells us about the company. The assets have increased slightly, meaning that Pepsi grew. This is important, because it tells us that having lower revenue isn't because we sold off a division. The company actually got bigger and we still made less money. The liabilities only…

Sources used in this document:
References:

Block, S.B., Hirt, G.A., & Danielsen, B.R. (2011). Foundations of financial management (14th ed.). New York, NY: McGraw-Hill.

Yahoo! Finance: Pepsi. (2013) Retrieved November 7, 2013 from http://finance.yahoo.com/q/bs?s=PEP+Balance+Sheet&annual

Lehavy, R., Feng, L., & Merkley, K. (2011). The effect of annual report readability on analyst following and the properties of their earnings forecasts. Accounting Review, 86(3), 1087 -- 1115.
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