EXERCISE 1
Perform a Financial Ratio Analysis for PepsiCo
Purpose
Financial ratio analysis is one of the best techniques for identifying and evaluating internal strengths and weaknesses. Potential investors and current shareholders look closely at firms' financial ratios. making detailed comparisons to industry averages and to previous periods of time. Financial ratio analyses provide vital input information for developing an IFE Matrix.
Instructions
Step 1. On a separate sheet of paper. Number from Ito 20. Referring to PepsiCo's income statement and balance sheet (pp. 29-30). Calculate 20 financial ratios for 2012 for the company. Use Table 4-6 as a reference.
Step 2. In a second column. indicate whether you consider each ratio to be a strength, a weakness, or a neutral factor for PepsiCo.
Step 3. Go to the websites in Table 4-5 that calculate PepsiCo's financial ratios, without your having to pay a subscription (fee) for the service. Make a copy of the ratio information provided and record the source. Report this research to your classmates and your professor.
EXERCISE 2
Construct an IFE Matrix for PepsiCo
Purpose
This exercise will give you experience in developing an ME Matrix. Identifying and prioritizing fac¬tors to include in an IFE Matrix fosters communication among functional and divisional managers. Preparing an IFE Matrix allows human resource, Marketing, production and operations, finance and accounting, R&D and MIS managers to articulate their concerns and thoughts regarding the business condition of the firm. This results in an improved collective understanding of the business.
Instructions
Step 1. Join with two other individuals to form a three-person team. Develop a team WE matrix for PepsiCo. Use information from Exercise I B on page 36.
Step 2. Compare your team's WE Matrix to other teams' IFE matrices. Discuss any major differences.
Step 3. What strategies do you think would allow PepsiCo to capitalize on its major strengths? What strategies would allow PepsiCo to improve on its major weaknesses?
EXERCISE 3
Construct an IFE Matrix for Your University
Purpose
This exercise gives you the opportunity to evaluate your university's major strengths and weaknesses. will become clearer in the next chapter, an organization's strategies are largely based on striving to t:tkc advantage of strengths and improving upon weaknesses.
Instructions
Step 1. Join with two other individuals to form a three-person team. Develop a team IFE Matrix for your university. You may use the strengths and weaknesses determined in Assurance of Learning Exercise ID on page 37.
Step 2. Go to the board and diagram your team's IFE Matrix.
Step 3. Compare your team's WE Matrix to other teams' IFE matrices. Discuss any major differences.
Step 4. What strategies do you think would allow your university to capitalize on its major strengths? What strategies would allow your university to improve upon its major weaknesses?