Advances in Economics, Management and Political Sciences

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Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 34 , 10 November 2023


Open Access | Article

Enterprise Value Analysis: The Case of PepsiCo

Shihao Guo * 1
1 School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 34, 140-145
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Shihao Guo. Enterprise Value Analysis: The Case of PepsiCo. AEMPS (2023) Vol. 34: 140-145. DOI: 10.54254/2754-1169/34/20231686.

Abstract

This paper has researched the Pepsi company value by using the discounted free cash flow (DCF) method and adjusted present value (APV) method. This paper has explained why company valuation is important at first. Then, discussed how the company valuation affects investors and managers. Finally, use DCF and APV methods to value Pepsi company based on the sales growth model and analyzed the research results. In order to obtain a relatively accurate result, this paper has forecasted the next five years’ sales revenue and calculated the free cash flow to estimate the company value. The result is that the company value calculated by these two methods is higher than market value. The reason is that the sales revenue is estimated to continue to grow, and the free cash flow neglects the other comprehensive incomes. According to the analysis of the valuing results, it could be concluded that managers should pay more attention to the company financial structure and business environment. At the same time, the managers should also expand the company market share to attract more consumers to achieve constant sales growth.

Keywords

company valuation, discounted free cash flow, adjusted present value

References

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-089-9
ISBN (Online)
978-1-83558-090-5
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/34/20231686
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated