Business Analyzer Worksheet

Name of Business: ________Pepsi_______

1. Does the company have an identifiable durable competitive advantage?
If yes, describe it in as simple a manner as you can.

1. Pass / Fail

Yes, Pepsi is one of the most popular brands of cola, besides Coke. So, since this is true, this gives Pepsi a
competitive advantage against all other name brands.

2. Do you understand how the business product/service works?

If yes, describe how the product/service works.

2. Pass / Fail

Yes. They have other successful products and a very successful, widely known, and popular drink.

3. Will the businesss product/service be obsolete in 20 years?

If no, explain why the product/service will not be obsolete in 20 years.

3. Pass / Fail

No, no matter how much fashion and style change, everyone will still love Pepsi and their products.

4. What is the companys per share earning history and growth rate?
(Finding Information on morningstar.com)
EPS (Earnings Per Share) --- Type Ticker Symbol in Get QuoteFinancials
Year
EPS

2006
6.68

2007
6.82

2008
6.42

2009
7.54

2010
7.82

2011
8.06

2012
7.84

2013
8.64

Has companys EPS consistently gone up each year? ___No___

If not, was the weakness a one-time event? ___no___

2014
8.54

2015
6.73
4. Pass / Fail

5. Is the company consistently earning a high return on equity?

(Finding Information on morningstar.com)
ROE for past ten years --- Key Ratios (will only show last 5 years)
Year
Return on
Equity

2005
29.2
3

2006
37.83

2007
34.4
6

2008
34.9
4

2009
41.21

2010
33.3
3

2011
30.8
9

2012

2013

28.84 28.96

2015
31.24

Business Analyzer Worksheet

5 -Year Average Return on Equity ____30.652____
/ Fail

Higher than 15%? _Yes_

5. Pass

6. Does the company have a lot of debt?

6. Pass / Fail
Long-term debt in the current year of the business / Total net earnings in the current year of the business
___23,821,000,000_________ /

5,045,000,000 = __4.721___

Long term debt should not be more than five times current net earnings
(Finding Information on morningstar.com)
Long Term Debt ---Financials - Balance Sheet --- (Click Annual tab at top; Look at current year)
Total Net Income ---Financials - Income Statement (Click Annual tab at top; Look at current year)
7. Is the company free to raise prices with inflation?

7. Pass / Fail

If the price of the product has risen on an average of at least 4% a year over the last twenty years, then
you can bet the farm that its the kind of business that can raise prices along with inflation.
8. Are large capital expenditures required to update plant and equipment?
(Does the product/service require expensive changes or upgrades?)

8. Pass / Fail

Price Analysis
9. Is the companys stock price suffering from a market panic, a business recession, or an individual
calamity that is curable?
9. Pass / Fail

10. Use this formula to determine if the business is undervalued, fair valued, or overvalued.
P/E Ratio (Price / Earnings) / 5-Year Annual Avg. of Net Income =
____29.0___

___19.6___

__1.4796__

0 1 = Company is undervalued
10. Undervalued/Fair value/Overvalued
1 2 = Company is fair valued
2 3 = Company if overvalued
(Finding Information on money.msn.com/)
P/E Ratio --- Valuation Price/Earnings (1st Column)
Net Income 5 Year Average ---Valuation Price/Earnings (4th Column)

Business Scorecard:
#1

#2

#3

#4

#5

Competitiv
e
Advantage

Understan
d
Business

Product/Servic
e
Obsolete in
20 years

Earnings
Per Share
(EPS)

Return
on
Equity
(ROE)

#6
Debt

Pass

Pass

Pass

Pass

Pass

Pass

#7

#8

Free to
Raise
Prices

Large
Cap. Exp
Needed

Pass

Pass

#9

#10

On Sale

Valuation

Pass

Undervalue
d

Business Analyzer Worksheet

Fair valued

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Fail
Overvalued