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| | Why Pepsico?
Pepsico is a global snack and beverage company.
Their most important product is Pepsi Cola. Since many years they have a duopoly in the Cola market with Coca Cola company. Although there are companies who offer brandless Cola for half of the price, people continue to drink Pepsi and Coca Cola. This brand loyalty is really strong. In addition beverages are a product that are used on a daily basis. Therefore the impact of the economy is decreased.
The main risks are health issues related with their products, image and brand recognition of their products.
Their balance sheet is strong.
The return on equity is 35% and the return on assets is 17%.
Their net income / tot assets is about 0.17 and their net income/non current assets is about 0.24.
These are all indications that the Pepsi brand has a competitive advantage and will lead to stable and growing future cash flows.
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