Dr. Pepper Snapple Group, Inc. (DPS) VS Monster Beverage Corporation (MNST)
SECTION 1: EXECUTIVE SUMMARY
Dr. Pepper Snapple Group, Inc. (DPS)
The corporate headquarters is located in Plano, Texas. The Dr. Pepper Snapple Group, Inc. was incorporated in Delaware on October 24, 2007. The ticker symbol that Dr. Pepper is registered under is DPS. The name of the exchange in which they are registered is the New York Stock Exchange. Dr. Pepper files under a calendar year putting there year end at December 31. The official filing date of the 10K and financial statements took place on February 19, 2014. Dr. Peppers independent auditors are Deloitte & Touche, LLP accounting firm. As of December 31, 2013, Dr. Pepper consisted of three different business segments: Beverage Concentrates, Packaged Beverages and Latin America Beverages.
Monster Beverage Corporation (MNST)
The official corporate headquarters is located in Corona, CA as of August 12, 2013. The company was incorporated in the state of Delaware on April 25, 1990. The ticker symbol that Monster Beverage Co. is registered under is MNST. The exchange that Monster Beverage Co. is registered is the Nasdaq Global Select Market. Monster Beverage Co. files under a calendar year putting their year end at December 31 st . The official filing date of the 10K was on March 3, 2014. The independent auditors are Deloitte & Touche, LLP. The main business segment, which consists of 92% of sales, is the sale of Monster Energy brand energy drinks. Consisting of 41 different flavor energy drinks.
SECTION 2: HORIZONTAL ANALYSIS
Dr. Pepper Snapple Group, Inc. (DPS)
The horizontal analysis on the Income Statement, the base year being 2011, shows that there has ben a small positive trend. The income statement is represented in the millions of U.S dollars. Net Sales increased by 1.59% since the base year but with that increase there was also an increase of cost of sales. The cost of sales didnt increase as much as expected due to the increase of sales, instead it has stayed about constant since the base year. This shows that Dr. Pepper has been very efficient in manufacturing their products. Income from base operations has decreased by 4% since 2012 but an overall increase since the base year. Income before taxes and subsidiaries has decreased dramatically, by 41.41% since the base year. Overall Dr. Pepper has had an increase in Net Income. The increases have been relatively small but it still shows that the business is profitable and growing. On the Balance Sheet, there has been a dramatic decrease in cash and marketable securities. The reason for this is because there has been a high increase in investments for unconsolidated subsidiaries. The investments have increased by 7.14% since 2012.
Monster Beverage Corporation (MNST)
Dramatic increases can be seen on the Income Statement. The dollar figures are represented in the thousands. Net sales, cost of sales, and operating expenses has increased in a dramatic way. This trend shows that Monster Beverage Co. is growing rapidly and the way they are doing it is by spending more money. The greater sales they have the greater amount of money they have to spend n order to obtain these sales. The operating expenses have increased more than sales. This means that Monster Beverage Co. has to find a way to become more efficient in the manufacturing and processing their products. If they manage to get there operating expenses down they would be more profitable. Overall Net Income has increased 18% since the base year. On the balance sheet there has been a decrease in cash and cash equivalents but there has been an overwhelming increase in short term investments. These investments consist of U.S Treasuries, certificates of deposit, Commercial paper, and Municipal securities. Also there has been an increase of property, plant, and equipment. This shows that the company is growing and expanding by obtaining more resources.
Overall Comparison
These two companies have a huge difference between them as far as worth. Dr. Pepper reports in the millions while Monster reports in thousands. Monster is still a relatively young corporation who is experiencing growth at a high rate. Their sales and net income have increased every year. While Dr. Pepper is an older company there are signs of growth but its at an almost stagnate rate.
Section 3: Vertical Analysis
Dr. Pepper Snapple Group, Inc. (DPS)
In 2013 the cost of sales consisted of 41.67% of sales. Meaning that almost half of the expenses incurred were from the manufacturing and production process. The cost of sales did go down since 2012 but only .03%. Also on the Balance sheet side Dr.Peppers biggest holding asset is Goodwill and other intangibles. Over two thirds of total assets is consisted of these two items. Copyrights and trademarks are a big part of Dr. Peppers branding and image. The current liabilities have a higher percentage then current assets. Meaning that id Dr. Pepper were to liquidate all their current assets they wouldnt be able to pay off their current liabilities. The current assets to total assets percentage has increased since 2012 which does sow growth and profitability to be able to invest more in investments.
Monster Beverage Corporation (MNST)
Cost of sales is the largest percentage of sales but it has gone down from 2012. Operating expenses is the second largest percentage of sales and has gone up since the previous year. This is primarily due to the dramatic increase of sales that Monster experienced during the year. Monster is a growing company short term investments has dramatically increased since 2012.It went from 9% to 28 %. The current assets outweigh the current liabilities by a very high margin. This shows that not only is Monster growing at a fast pace but they are able to maintain there debt.
Overall Comparison
The main difference that can be seen between these two companies is there rate of growth. Dr. Pepper is growing but a more stagnate rate while Monster is growing rapidly. The fact that Monsters Current assets can completely cover the current liabilities if they were liquidated shows that they have very good debt management. Dr. Pepper has a lot of their assets tied up in intangibles and goodwill. Monster is still to young to have these huge investments in these categories.
Cpa Review School of The Philipines Manila Financial Accounting and Reporting JULY 2021 First Preboard Examination SITUATION 1 - Three Unrelated Entities