The company reported a three percent fall in net profit for the first quarter and this was due to costs of acquiring Bai Brands. If you take a look at the cost of marketing, this was due to absorbing the cost of their Super Bowl advertisements. Volume did increase one percent and the company reported full year earnings per share of $4.56 to $4.66, which is around what the street believes. When these numbers hit, you need to understand that the cost of marketing was up due to a once a year expense and the acquisition may have cost a little more, but that is for the better of the company long term. Be sure to understand that those shouldn’t be felt going forward.
Looking at the stock chart on the monthly time frame, you can see that price has done nothing but increase, providing excellent returns for investors. However, you have to take into account we’ve been in a long sustained bull run and that certainly can’t continue on forever. Realize that there will be a market pull back at some point you don’t want to be invested in a company that is unable to handle a market pull back.
How important is Dr Pepper's Liquidity
Dr Pepper
financial leverage refers to using borrowed capital as a funding source to finance Dr Pepper Snapple ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Dr Pepper financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Dr Pepper's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Dr Pepper's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Dr Pepper's total debt and its cash.
Going after DPS Financials
Some of the more well known risks to keep in mind is that push for healthier food options, which is negative pressure against the soft drink industry. People will always purchase soda, but this will reduce sales if the company is unable to market and sell effectively. Secondly, the competition in the soft drink industry is fierce and shelf space is at a premium. Dr. Pepper will need to maintain their market share and product quality if they wish to hold on to their current edge and grow.
There are many players in this market space and it can certainly be difficult to decide. Be sure to take a good long look at your options and compare the many different companies to see which one is providing you with the best value. If you get stuck in your research, reach out to an investing professional as they should be able to help point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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