![MEMORANDUM
TO: [RECIVER’S NAME]
FROM: AFRAH AYUB [SENDER’S NAME]
SUBJECT: ACCOUNTING ASSIGNMENT
DATE: JUNE 8, 2014
CC: INFORMATICS
I am the Senior Accountant of the company PepsiCo, Inc. It was incorporated in Delaware in
1919 and was reincorporated in North Carolina in 1986. When in this memorandum, I use the
terms “we,” “us,” “our,” “PepsiCo” and the “Company” it means PepsiCo, Inc. and its
incorporated supplement.
We are a well known universal food and beverage company with brands that are
admired and beloved household names all over the world. Through our operations, authorized
bottlers, contract manufacturers and other minor parties, we make, advertise, sell and
distribute a wide variety of convenient and delightful foods and beverages, serving customers
and consumers in more than 200 countries and territories.
Our management monitors a variety of key Pointers to evaluate our business reports
and budgeting positions. These pointers include net capital spending, growth in volume,
advertising and marketing expenses, revenue and organic revenue, growth in administering
profit and market share etc.
3](https://image.slidesharecdn.com/accountingmemow1005complte-141013174255-conversion-gate02/85/W1005-ACCOUNTING-ASSIGNMENT-3-320.jpg)
W1005 ACCOUNTING ASSIGNMENT
- 1. 14 ACCOUNTING ASSIGNMENT BY: AFRAH AYUB SHEIKH ID-
- 2. TABLE OF CONTENTS I. INTRODUCTION: …………………………………3 Objective of the company……………………………….……4 II. BUDGET PREPARATION PROCESS: Strategic goals ………………………………………….…..….…5 External factors (PEST analysis)………………...…….….…….5 Internal factors (SWOT analysis)………………………..….…..6 Budget objectives………………………………………….……..8 Budget Committee………………………………..………......….8 Principal Budget Factor (PBF)…………………………………..8 Prepared budget………………………………………………….8 Implementation…………………………………………………..8 III. BUDGET COMMITTEE STRUCTURE ……………..8 Board of Directors………………………………………………..9 Board of Leadership……………………………………………..10 IV. AUTHORIZATION LIMIT ………………………….....10 V. STATEMENT OF INCOME OF PEPSI CO………………………..11 VI. BALANCE SHEET OF PEPSI CO …………………………..12 VII. STATEMENT OF EQUITY OF PEPSI CO………………………...13 VIII. 2 IX. REFERENCES: Citation…………………………………………………………. 14 Book references………………………………………………...14
- 3. MEMORANDUM TO: [RECIVER’S NAME] FROM: AFRAH AYUB [SENDER’S NAME] SUBJECT: ACCOUNTING ASSIGNMENT DATE: JUNE 8, 2014 CC: INFORMATICS I am the Senior Accountant of the company PepsiCo, Inc. It was incorporated in Delaware in 1919 and was reincorporated in North Carolina in 1986. When in this memorandum, I use the terms “we,” “us,” “our,” “PepsiCo” and the “Company” it means PepsiCo, Inc. and its incorporated supplement. We are a well known universal food and beverage company with brands that are admired and beloved household names all over the world. Through our operations, authorized bottlers, contract manufacturers and other minor parties, we make, advertise, sell and distribute a wide variety of convenient and delightful foods and beverages, serving customers and consumers in more than 200 countries and territories. Our management monitors a variety of key Pointers to evaluate our business reports and budgeting positions. These pointers include net capital spending, growth in volume, advertising and marketing expenses, revenue and organic revenue, growth in administering profit and market share etc. 3
- 4. I. Objectives of Pepsi Co are: - Performance with Purpose is PepsiCo’s recognition that the company’s grand slam is inextricably linked to society’s success. Every year we take the mandatory actions to strengthen our company. We make significant investments abaft our largest global brands. Performance with Purpose is our goal to put out sustained market price by providing a variety of numerous foods and beverages, from treats to healthy eats, finding innovative ways to knock down our impact on the environment and lower our costs through energy and water conservation as well as reduce use of packaging material thus contributing in a safe and inclusive workplace for our employees universally and respecting, supporting and investing in the local communities in which we operate. As long as Performance with Purpose is our guide, I believe we will continue to maintain the long-term, sustainable growth. In order to do well by our shareholders, we also have to take into account the needs and concerns of a wide range of stakeholders. If our financial achievement comes at the expense of the environment, our consumers or our communities, we will not be viable in the long run. These are the 22 products offered by our company, PEPSI CO. 4
- 5. II- Budget Preparation Process: This process consists of 8 steps. 1) Setting of strategic goals: It is the part of long term planning’s in which we strive to deliver long term financial performances and sustained value of shareholder, we continue to refine our products, help conserve the universal supply of water and lastly and most importantly, to create a safe, healthy and diversified workplace which reflects globally. 2) Consider the external factors of organization: PEST analysis is done when talking about the external factors of our company. This is an important thing to do as it handles and gives a good impact to our company. PEST ANALYSIS Political factors: Our products are brought to market through direct-store-delivery (DSD), customer warehouse and distributor networks; we make sure that we maintain everything accurately and we ensure to use good and simple ingredients in our food and beverage items such as fresh fruits, juices, corns, rice, vegetable and essential oils, wheat etc. Our key packaging materials include plastic resins, including polyethylene terephthalate (PET) and polypropylene resins used for plastic beverage bottles and film packaging used for snack foods, aluminum used for cans, glass bottles, closures, cardboard and paperboard cartons. Fuel and natural gas are also important commodities for us due to their use in our facilities and in the trucks delivering our products. We employ specialists to secure adequate supplies of many of these items and have not experienced any significant continuous shortages. Many of these ingredients, raw materials and commodities are purchased in the open market Economical factors: Our businesses operate in highly competitive markets. Our meals and food brands compete on the basis of price, quality, product variety and distribution. Success in this competitive environment is dependent on effective promotion of existing products, introduction of new products and the effectiveness of our advertising campaigns, marketing programs, product packaging, pricing, increased efficiency in production techniques, new vending equipment. Social factors: Our businesses are affected by seasonal variations. For instance, our beverage sales are higher during the warmer months and certain food and dairy sales are higher in the cooler months. Weekly beverage and snack sales are generally highest in the third quarter due to seasonal and holiday-related patterns, and generally lowest in the first quarter. However, taken as a whole, seasonality does not have a material impact on our consolidated financial results. 5
- 6. Technological factors: We engage in a variety of research and development activities and continue to invest to accelerate growth in these activities and to jaunt innovation globally. These activities principally commit in the production, processing and packaging. Furthermore it embraces the development of new ingredients, products, improvements in the quality of manufacturing processes, packaging technology, enrichment in product qualities, safety and integrity, We also made investments to reduce our impact on the environment, including innovation in our packaging to make it progressively sustainable, and developed and implemented new technologies to enhance the quality and value of our current and future products, 3) Consider the internal factors of organization: This is done by the SWOT analysis as it plays a very good role in finding out all the internal strength and weakness inside the organization. By this analysis, no factor is being ignored. SWOT ANALYSIS Strength: PepsiCo’s portfolio competes in two centralized, related categories: foods and beverages. Both categories have attractive universal growth expectancy of 5% or more, and our convenient foods and beverages businesses are fairly steadily balanced. Furthermore, our categories and goods are notably complementary, sharing the same customers, consumers and occasions. In many markets, we compete against numerous district companies and many of our snack and food brands hold momentous leadership positions in the snack and food industry worldwide. Having both foods and beverages allows us to discharge and broadly give away new, convergent nourished food and beverage products thus we offer delicious food and convenient beverage options for a wide variety of occasions from morning to evening for instance, our customers might wake up to a breakfast of Quaker Real Medleys and Trop50, enjoy a Pepsi MAX and Sun Chips for lunch followed by a Lipton beverage. Food service consumers also see the blessing of partnering with our company due to our access to retail partners and the option of securing food service customer inspired snacks onto the racks in grocery stores. We have cunning capabilities that give us a leg up on the competition when it comes to knowing and developing what consumers want to eat and drink throughout the day. To meet the needs of our consumers, our capabilities position us to develop the finest results. Moreover, our broad portfolio has been a strong competitive advantage in foodservice. Weakness: - Our beverage, snack and food brands compete against global, regional, territorial and private label manufacturers and other value competitors. In many countries in which we do business, The Coca-Cola Company is our primary beverage competitor. Other food and beverage competitors encircle, but are not limited to, ConAgra Foods, Inc., DPSG, Kellogg Company, Kraft Foods Group, Inc., International, Inc., Monster Beverage Corporation, Nestlé S.A., Red Bull etc. 6
- 7. However, The Coca-Cola Company has significant carbonated soft drink share advantage in many markets outside the United States. Our beverage and food brands compete on the basis of price, quality, product variety and distribution. Success in this competitive environment is dependent on promotion of existing products, introduction of new products, advertising campaigns, marketing programs, product packaging, pricing, production techniques, new vending equipment and advanced technology. Our business could suffer if we don’t designate stock and sustain proper IT infrastructure or if our systems get damaged, shutdown due to natural disasters or hacked as we lay money on the latest information technology, including cloud-based services. Opportunities: - We have enrolled into agreements to share assertive information technology support services and administrative functions such as payroll processing, finance and accounting functions. We are going on further by refining our food and beverage portfolio to meet changing consumer needs by developing a broader portfolio of product choices. We expect that developing and emerging markets will continue to represent an attractive high growth space for our Company, We also made investments to incorporate into our operations best practices and technology to support supportable agriculture and to reduce environment impact. And also plan to carry forward new ways to manage volatility in the properties due to extreme weathers due to seasonal changes. We continue to adapt our advertising and marketing model to harness the power of social media and develop the efficiency of our sales force which will improve our analytical capabilities and enhance food safety and quality. Nevertheless, we will continue to compete effectively in the markets so we continue to invest in developing and emerging markets and to broaden the range of our product portfolio. Threats: - We are subject to risks in the normal course of business like income inequality, competition for natural resources, geopolitical tensions and conflicts will continue to pose threats to doing business in many countries around the world. Our ability to procreate, manufacture, distribute and sell products is critical to our success. Geopolitical and social tensions and battle are expected to promote to pose risks to doing business in many countries around the world. Another threat which disturbs us is the extreme warmer temperatures, devious rainfall patterns, new pests, floods and wildfires as they all threaten the productivity and availability of agricultural inputs. Less-favorable rating is expected for a few products due to stubborn changes in the climate which may result in depreciation of money for un-doubtful products 7
- 8. 4) Set budget objectives: considering the PEST & SWOT and their edges, we check whether the objective is attainable. For example whether capital needs to be raised, from where the capital needs to be allocated how much, and when all these must be taken into account for the benefit of the company. If the objective is not attainable a divergent objective must be chosen and the process is repeated. 5) Set up a budget committee: as we are a very well known and well established company worldwide, our budget committee is already been setup and selected. 6) Identify Principal Budget Factor (PBF): It is necessary to identify and detect this PBF initially as it leads to the decision of which budget is prepared first and foremost, and all other budgets are subsequent to it. 7) The prepared budgets are further deliberated by budget Committee to minimize all the possible opportunities and losses and to make sure that it will benefit our company and then a final budget is shortlisted on the agreement of all departments. The committee head and board of directors will authorize it. 8) Implementing the budget it happens when the declaration of the budgeting process is exchanged with all the operational levels. III- Budget Committee Structure PepsiCo’s Board of Directors: They are responsible for overseeing risk assessment and mitigation. The Board receives updates on key risks throughout the year. The Board has delegated oversight of certain categories of risk to designated Board committees which report to the Board regularly on matters relating to the risks the committees oversee. Audit Committee of the Board of Directors: They assess and check the guidelines policies governing our company’s risk management and oversight processes and assists the Board’s oversight of financial, compliance and employee safety risks facing PepsiCo. 8
- 9. Compensation Committee of the Board: They periodically reconsider our company’s policies and practices compensation to assess whether such policies and practices could lead to unnecessary risk-taking behavior. PepsiCo Risk Committee (PRC): It is comprised of a senior management group which meets periodically to identify, assess, prioritize and address the strategic, financial, operating, business, compliance, safety, reputational and other risks. PepsiCo’s Risk Management Office: Manages the overall risk management process, providing the ongoing guidance, tools and analytical support to the PRC’s, identifies and assesses potential risks and facilitates ongoing communication between the parties, as well as with PepsiCo’s Board of Directors and the Audit Committee of the Board; PepsiCo Corporate Audit: This evaluates the ongoing effectiveness of our key internal controls through periodic audit and review procedures. PepsiCo’s Compliance & Ethics Department: This leads and coordinates our compliance policies and practices. 9
- 10. IV- AUTHORIZATION LIMIT OF PEPSI CO: Pepsi Co. has been utilizing all the money according to their budgets and they do not rush to over spent or spent below the required level in order to maintain their budget reputation and stability of the firm so the conduct is not inhibited in any way possible. All the costs are planned ahead of time and in a systematic way. Rushing into getting any deal or investing can cause the company’s image to be questioned and to maintain the brand image in the global market it is important to keep all the accounts fair to avoid any inspection threats. PepsiCo expressly disclaims any warranty of any kind, whether express or implied 1 0
- 11. V- STATEMENT OF INCOME OF PEPSI CO 1 1
- 12. VI- BALANCE SHEET OF PEPSI CO 1 2
- 13. VII- STATEMENT OF EQUITY OF PEPSI CO 1 3
- 14. 1 4 VIII- REFRERENCE: Citation: http://www.pepsico.com/Company/Our-History/ http://en.wikipedia.org/wiki/PepsiCo http://www.tutorsglobe.com/homework-help/cost-accounting/preparation-for-budgetary- control-7999.aspx http://saraalgoe.hubpages.com/hub/SWOT-and-PEST-analysis-of-Pepsi-Co http://www.scribd.com/doc/39879768/Pepsi-co http://www.pepsico.com/Legal/TermsOfUse Book: Bradshaw, John Mel Brooks, Business, Accounting & Finance, Republic of South Africa, 2007, Reprinted. Peter Stimpson and Alastair Farquharson, Cambridge International AS and A level. Business Studies second edition. Chakraborty, Hrishikesh, Advanced Accountancy, Oxford University Press.