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Coke Analysis

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Coke Analysis

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October 18, 2015

The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups. Known best for it’s Coca-Cola soft drink. According to Forbes, Coca Cola Co. rank high on several business lists to include: #81 Innovative Companies, #4 World's Most Valuable Brands, #93 Global 2000, #198 in Sales, #73 in Profit, #282 in Assets, #32 in Market value and #255 America's Best Employers (Forbes, 2015). In this paper, I will be evaluating Coca Cola Co.’s financial standing by utilizing their balance sheet, income statement, cash flows, and ratios.
Return on Assets Return on assets is a profitability ratio. Richard Loth of Investopedia states the return on assets (ROA) ratio illustrates how well management is employing the company's total assets to make a profit. The higher the return, the more efficient management is in utilizing its asset base (Investopedia, 2015). The equation for return on assets: return on assets = income/assets. Both the income and assets are found on the balance sheet. Coca-Cola Co. reported a net income of (in thousands) $7,098 and total assets of $92,023 in December 31, 2014. This led to a return on assets of 7.71%. May 31, 2014 a reveals net income of (in thousands) $8,584 and total assets of $90,055 making the the return of assets 9.53%. Industry standards dictate a return on assets over 5% is considered good. Coca-Cola Co. experienced a 19% decrease in return on assets between December 31, 2014 and 2015. Competitor PepsiCo Inc. reported return of assets at 9.24% (2014) and 8.7% (2013), boasting an increase of 6% in return on assets in the same span of time. Although a major company in its respective field, a decline in return in assets may be concerning as its stated in Investopedia as an overinvesting in assets that

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