Coca Cola Financial Analysis

In: Business and Management

Submitted By vasha13
Words 1376
Pages 6
Assignment #1: Coca-Cola Company
Financial Results Analysis: Q3 2012







ACC499/Accounting Capstone
10/21/12
Coca-Cola Company is a beverage company headquartered in the United States with significant international operations. Operating in over 200 countries worldwide with a product offering of over 500 different products, Coca-Cola Company has come a long way from a small beginning in 1886 (Coca-Cola, History, 2012). Long considered a strong corporate entity by investors and analysts, Coca-Cola recently released 2012 Q3 financial results and business targets on October 16, 2012 as discussed below.
North American Market Volume Results
North America is part of the Coca-Cola Americas division which also includes Latin American operations. The United States was the starting market for Coca-Cola Company however the North American sector also includes Canada and Mexico. While North America continues to be a significant factor in all financial transactions and considerations, recent concerns with obesity in the United States has caused sales issues for Coca-Cola Company and is a continuing issue the company needs to address. For this reason as well as general market saturation, North America, while strong, continues to show small to moderate gains in market volume.
For Q3 2012, North American operations presented an overall growth of 2%. This metric is the net result of no volume increase for the sparkling (carbonated) beverage section against a 7% gain in still (non-carbonated) beverages. Growth in the still beverages sector can be attributed to an expanded portfolio of non-carbonated beverages such as packaged water, sports drinks, energy drinks, ready-to-mix tea and coffee as well as juices and juice drinks (Zacks, 2012). With a significant 7% growth in the North American still beverage market, this section continues to drive…...

Similar Documents

Coca Cola Financial Analysis

...Assignment #1: Coca-Cola Company Financial Results Analysis: Q3 2012 ACC499/Accounting Capstone 10/21/12 Coca-Cola Company is a beverage company headquartered in the United States with significant international operations. Operating in over 200 countries worldwide with a product offering of over 500 different products, Coca-Cola Company has come a long way from a small beginning in 1886 (Coca-Cola, History, 2012). Long considered a strong corporate entity by investors and analysts, Coca-Cola recently released 2012 Q3 financial results and business targets on October 16, 2012 as discussed below. North American Market Volume Results North America is part of the Coca-Cola Americas division which also includes Latin American operations. The United States was the starting market for Coca-Cola Company however the North American sector also includes Canada and Mexico. While North America continues to be a significant factor in all financial transactions and considerations, recent concerns with obesity in the United States has caused sales issues for Coca-Cola Company and is a continuing issue the company needs to address. For this reason as well as general market saturation, North America, while strong, continues to show small to moderate gains in market volume. For Q3 2012, North American operations presented an overall growth of 2%. This metric is the net result of no volume increase for the sparkling (carbonated) beverage section...

Words: 1376 - Pages: 6

Coca Cola Financial Analysis

...THE COCA-COLA COMPANY FINANCIAL RESULTS ANALYSIS EARNINGS CALL DATE: OCTOBER 16, 2012. ACC 499 JAMES N. LEWIS INSTRUCTOR: DAVID REPP DATE: JANUARY 27, 2013 The North American Market and its Impact to volume growth or declines for the period In the October 16, 2012 3rd quarter earnings release, the North American market was referred to as Coca-Cola’s flagship market. This reason for this classification becomes apparent when one considers that fact that this market recorded volume growth for 10 consecutive quarters. For the 3rd quarter of 2012, the volume growth in unit cases was 2%, while net revenues increased by 5%. This is impressive when you consider the fact that this volume growth was achieved in spite of a price increase of two percent to combat rising material costs. The Operating Review section of the earnings release for the 3rd quarter shows that this market was able to achieve a 5% increase in net revenues and a 34% increase in operating income. The non-alcoholic ready to drink (NARTD) total market volume grew for the 3rd quarter due to the company’s efforts to improve its brands and the quality of service to its customers. Coca-Cola Zero and Seagram’s were the primary contributors to this positive performance, recording growth of 9% and 11% respectively, with still beverages experiencing a volume growth of 7%. What is impressive it that this growth was achieved even though the company experienced an inconsistency in consumer...

Words: 1399 - Pages: 6

Financial Diagnosis of Coca-Cola

...19/11/2012 Coca-Cola Contenu I Overview 3 1- Key facts: 3 2- Business description: 3 3- History: 4 4- Major products and services: 5 II Context and Short Economic Analysis 5 III Financial Structure 6 1- Liquidity-and-solvency perspective 6 2- Capital Employed Perspective 9 3- Working Capital Ratio 10 4 Shareholders 11 IV Trend Alalysis 12 1- Coca Cola Company profitability 12 2- Sales and value added 13 3- Management effectiveness 14 V Comparative Analysis 15 VI Financial Cash Flow 18 VII Risk Assessment 21 VIII Recommendation 23 I Overview 1- Key facts: The world around us is changing so fast. Today we must see what kind of things can happen tomorrow. That's what Coca-Cola‘s vision of 2020 is. It creates clear destination for this company business and serves with a "Roadmap" for triumphing together with their pouring out partners. Coca-Cola‘s roadmap starts with a mission, which is lasting. Basic tasks of this company are: „to refresh the world“, „to inspire moments of optimism and happiness“, „to create value and make a difference“. Coca-Cola substantive visions are: people, portfolio, partners, planet, profit and productivity. All these words tell you that Coca-Cola is seeking the best value for all company sectors. They want to be a great place to work. They are bringing high quality products of nonalcoholic beverages. The Coca-Cola’s company reaches for best suppliers, marketing strategies and everything what...

Words: 5986 - Pages: 24

Coca-Cola

... Conduct, European Union competition law, Latin American competition law, financial integrity, intellectual property and competitive intelligence, drug-free workplace and preventing workplace violence. In 2006, we rolled out an updated global anti-bribery compliance program with supporting policies, training and audits. In addition, we expanded our compliance program around United States trade sanctions with supporting policies, training and audits. Our associates, bottling partners, suppliers, customers and consumers can ask questions about our Code and other ethics and compliance issues, or report potential violations, through Ethic Lines, a global Web and telephone information and reporting service. Telephone calls are toll-free, and Ethics Line is available 24 hours a day, seven days a week, with translators available. General Discussion and Conclusion: In my opinion Coca-Cola markets its product very effectively as the company profit results and fast expansion shows. By exploring the effectiveness of mouth-to-mouth advertising and referrals Coca-Cola is able to achieve extremely high profits and provide different types of earning opportunities to the distribution. Although we know that Coca-Cola is a world company that have a adaptation very easy in different culture. Reference:......

Words: 2159 - Pages: 9

Financial Statement Analysis of Coca Cola

...Financial Statement Analysis ACG203-CE Marianne Marchant Margaret Pesikov Sean Lenehan Jeff Braga 2 Table of Contents Questions to be answered Management Discussion & Analysis section and Miscellaneous Income Statement and Profitability Cash Flows Balance Sheet Liquidity and Efficiency Solvency 3 3 6 12 14 18 22 Relevant Documents Balance Sheet Income Statement 25 25 26 Evaluation 27 3 Questions to be answered: Management Discussion & Analysis section and Miscellaneous 1. Read the Management Discussion and Analysis and the Chairman’s letter to shareholders. Describe the major products and services of the company. The Coca-Cola Company is the leading owner and marketer of nonalcoholic beverage brands. Coca-Cola either owns or licenses 500 of the world’s nonalcoholic beverage brands. Coca-Cola is recognized as the world’s most valuable brand. There are approximately 54 billion beverages of all kinds served worldwide, of the 54 billion Coca-Cola accounts for approximately 1.6 billion of those beverages. Coca-Cola sells syrups, concentrates, and sodas to bottling companies and retailers. 2. Describe some of the specific details of the company’s financial and operational performance. Based on what you read in the Management Discussion & Analysis sections, do you get a positive or negative impression about the company? Describe why. Coca-Cola follows the accounting principles that are generally accepted in the United...

Words: 6958 - Pages: 28

Coca Cola

... another major concern that effects the whole beverage industry, availability of fresh water is declining every day and more and more people are forced to get their water from polluted sources. Fluctuation of different currency rates also plays a significant role in everyday operations for Coca-Cola, since there are 76 different types of currencies that are accepted by Coca-Cola Globally, risk of deflation, gov’t corruption and inefficiencies could potentially Effect Company’s over-all profitability. CPM Comparative Profile Matrix identifies key success factors for three companies (Coca-Cola, PepsiCo, Nestle), key success factors were determined on basis of competition in United States. This Matrix indicates that both Coca-Cola and PepsiCo each have four success factors that showed more importance than others. Matrix also shows that the only success factor that was received highest rating for all three companies was “Financial Position”. We can conclude from the above Competitive Profile Matrix results that PepsiCo has stronger position with a weighted score of “3.45” while Coca-Cola’s weighted score is “3.41”, based on given information as well as number of key success factors that were listed for all three companies (PepsiCo, Coca-Cola, and Nestle). Evaluations of this data showed that PepsiCo has an advantage over Coca-Cola here in US. Work Cited: "Live Nation and Coca-Cola Announce Strategic...

Words: 1450 - Pages: 6

Coca Cola

... important business allies. An example of an anchor bottler is Coca Cola Enterprises (hereafter referred as Enterprises). This corporation is responsible, today, for the production and distribution of Coca-Cola’s products throughout all western and northern Europe. Enterprises is, itself, a union of many independent bottling groups, which have been acquired since the early 80’s. The goal of this case study is to analyze the consolidation of Coca-Cola with its bottling subsidiaries, namely Enterprises. The Equity Accounting Method This method is applied when a shareholder has significant interest on a company but fails to meet the minimum 50% for a majority – the owned business is referred as an associate company or a joint venture. Each year, the parent company reports in its statement of financial position an update on its equity, regarding any profit or loss it is entitled to, proportional to its investment on the associate. Consolidation Analysis – Should Coca-Cola follow a full consolidation? If The Coca-Cola Company was the major shareholder of Enterprises, with more than 50% ownership, the answer would be quite straightforward: enterprises should be fully consolidated, as Coca-Cola effectively controls and represents Enterprises. Page | 1 What happens is that by March 1999, Coca-Cola only owned 40% of its subsidiary’s business, questioning the choice of following a full consolidation, rather than an equity accounting method. In order to solidify our choice,......

Words: 1704 - Pages: 7

Pepsi and Coca Cola Financial Statement Analysis

...Introduction The purpose of this financial analysis paper will evaluate the results of PepsiCo, Inc. and The Coca-Cola Company. The paper will access the balance sheets of the two from 2004 and 2005 through horizontal and vertical analysis. The paper will also address recommendations of how to improve the financial status of both companies. Vertical analysis for PepsiCo, Inc. 2005 2004 |Total Assets | $ 31,272 | | $ 27,987 | | | |Amount |Percent |Amount |Percent | |Assets | | | | | | Current Assets | | | | | |Cash and cash equivalents | $ 1,716 |5.5% | $ 1,280 |4.6% | |Short-term investments | 3,166 |10.1% | 2,165 |7.7% | | | 4,882 |15.6% | 3,445 |12.3% | |Accounts...

Words: 1241 - Pages: 5

Coca Cola Financial Analysis

...Financial Analysis Project – Final Paper Jennifer M. Harding Cardinal Stritch University MBA 521 August 28th, 2014 Purpose of Analysis All managers need to understand where value comes from in their firm. The purpose of this analysis is to identify the financial strategy and performance of this particular publicly traded company. The process of understanding the risk and profitability of a company by analyzing reported financial info, especially annual and quarterly reports are vital to identifying the company’s overall financial performance. I wanted to analyze Coca Cola because the company has so much history and is one of the most recognizable brands in the world. I have always enjoyed researching food and beverage companies because of my background in the food service industry. I have always been fascinated by brand power of food and beverages and the corporations that are behind particular brands and products. Company Background and History The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups. Headquartered in Atlanta, Georgia, the company is best known for its flagship product, Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler (December 30, 1851 - March 12, 1929), who incorporated The Coca-Cola Company in 1892 (Wikipedia, 1). The company...

Words: 6362 - Pages: 26

Financial Statement Analysis Coca Cola

...Financial Statements Analysis Dr. Rimona Palas Caroline LAYANI Id: 94746 Michael WEIMBERG Id: 94852 Nathan BENAMOU Id: 94531 Sebastian KANOVICH Id:799048 I. Executive summary After analyzing the income statement, ratios and strategies of the Coca-Cola Company, we can conclude that Coca-Cola had a continuous revenue growth between the years 2009 and 2011. It is the largest soft drink industry company in the world and therefore stands in a privileged position to face potential crisis. The reason for having our results in the income statement, and thus also in our ratios can be explained by the company’s acquisition and consolidation of CCE’s North American business during the last quarter of 2010. Moreover, another important factor for the decline in equity interest was the sale of the company’s investment in Embonor during the first quarter of 2011. Coca-Cola has been using several strategies. As mentioned above, acquisitions have been an important factor of Coca-Cola over the last 50 years. By acquiring new companies, they were able to eliminate competition, increase their growth and become the market leader of the non-alcoholic beverage industry. Following our calculations, over the past three years, Coca-Cola had an increase in its current liabilities as well as in their “cash to sales”. The debt-to-equity ratio shows that it’s smaller than one, meaning that the company is financed through equity. This low debt-to-equity ratio will usually be...

Words: 13579 - Pages: 55

Coca-Cola

... very successful beverage company because of their market success factors. The market success factors of Coca-Cola Company are market research, market analysis, selecting target market, SWOT analysis, marketing mix and so on. The Coca-Cola Company faces some market problems such as health effect, competitors and environmental impact. We have suggested Coca-Cola Company solve their health problem by launch sugar free, sugar less, low-calorie and no-calorie product. Coca-Cola Company understands the culture of a country and launches a product that has not launched by others competitors before. Finally, Coca-Cola Company must use recycle plastic in their bottle to solve environmental impact. From the report, we learn the market success factors of Coca-Cola Company and their history. We know about the Coca-Cola Company problems and the ways to solve. In brief : the key success factors of Coca – Cola have been marketing strategy, introducing new products and globalization. Marketing strategy: Coca cola uses different types of marketing strategy for growing and retaining its customer. In early days, to build brand recognition, they offer clocks, calendars and weighing scales with Coca Cola logo to pharmacists who sold their drink. During mass market TV advertising, Coca Cola was the pioneers TV advertising. Now, when the effectiveness of TV advertising is declining, they organize different types of campaigns in gathering areas. ================ 2. Where is...

Words: 1908 - Pages: 8

Coca Cola Financial Analysis

... percent.” Muhtar Kent So after considering all of these I believe investing in Coca Cola Company is a good idea and a safe investment. There is a low overall risk and a high expected rate of return for the future with continued volume growth and fairly ambitious long-term targets. Bibliography , http://www.thecoca-colacompany.com/investors/governance/directors.html http://www.stock-analysis-on.net/NYSE/Company/Coca-Cola-Co http://www.stock-analysis-on.net/NYSE/Company/PepsiCo-Inc http://www.pepsico.com/Company.html http://investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=KO:US http://www.gurufocus.com/news/133348/longterm-financial-analysis-of-cocacola http://seekingalpha.com/article/606481-coca-cola-acceptable-risk-adjusted-returns-at-the-current-price...

Words: 2427 - Pages: 10

Financial Research Report: the Coca - Cola Company

... dividend amount by the Company was 30.5 cents and the expectation of the same is done for the following quarters. * There is a large bully in the sell side. Stock analysts seem to appear quite bullish at the stock of the sell-side. According to some surveys, a poll reflects that out of all of the respondents, 17 analysts decide on the Buy option, 13 decide on a hold option and only 2 decide on the Sell option. * The Recent Price Performance of the Company in Comparison to Competitors The Coca Cola Company has outperformed its closest competitor, PepsiCo, over the last five years. The movement of the stock for both these companies can also be said to have gone ‘hand in hand’. Thus, the price rise is steady and stable and in parallelism with competitors’ stock process. Financial (Ratio) and Stock Price Analysis: The financial analysis will be based on the ratio analysis and the stock analysis will be based on the trend of share process change in the years since the Initial Public Offering (IPO). Let us first analyze the change in stock prices. Particulars | Stock Price | IPO | $40.00 | Jan 1, 2011 | $65.77 | Jan 1, 2012 | $69.97 | Jan 1, 2013 | $36.25 | The financial analysis is to be carried out based on the following five ratios explained below: 1. Current ratio: A ratio, which is used for the description of mathematical relationships among current assets and current liabilities of a company or a business, is the current ratio. ......

Words: 2936 - Pages: 12

Coca Cola Financial Analysis

...Executive Summary With their global presence known in 200 countries and 6 operating regions, The Coca Cola Company is the number one global leader in the beverage industry (Who we are). Headquartered in Atlanta, GA, the company owns more than 500 nonalcoholic beverage brands such as waters, juices, coffees, sports drinks, soda, and many more. They’re the owners of brands like coca cola beverage (of course), but also popular brands like Dasani, Capri-Sun, Minute Maid, Fuze, NOS energy drink, Powerade, etc. Coca Cola is not only known for their products, but also the way they market their products. From polar bears and Santa clause to celebrities drinking the refreshing bottle of coca cola. In 2010, 89 servings are consumed per person worldwide (Per Capita Consumption). According to MSN, Coca Cola sales over 46.22 Billion and in return, their income is about 8.37 Billion making it one of the successful businesses around the world (Coca-Cola Company). Financial Highlights (http://finance.yahoo.com/q/ks?s=KO+Key+Statistics) | | Fiscal Year | Fiscal Year Ends: | Dec 31 | Most Recent Quarter (mrq): | Oct 2, 2015 | | Profitability | Profit Margin (ttm): | 15.24% | Operating Margin (ttm): | 23.09% | | Management Effectiveness | Return on Assets (ttm): | 6.88% | Return on Equity (ttm): | 23.03% | | Income Statement | Revenue (ttm): | 45.17B | Revenue Per Share (ttm): | 10.36 | Qtrly Revenue Growth (yoy): | -4.60% | Gross Profit...

Words: 782 - Pages: 4

Coca Cola

... figure for me and I can just not thank them enough for framing me into a personality that I possess today. Last but not the least, I express my thanks to my advisors, Ms Farhat Iqbal Awan, Ms Anum Zafar and Ms Maryam Rehmat, without whom this report would not have been completed and compiled. They have worked very hard on this with me. PREFACE The study mainly focuses on how Coca Cola has performed over the past years internationally and especially in Pakistan. The main purpose of this project is to teach us as to how Coca-Cola has done over the many decades since its beginning, what problems its faces and what recommendations are possible from my research analysis. The scope of the project is to discuss the marketing strategies adopted and applied by ‘Coca Cola’, Pakistan. The primary concern is how and what type of advertising tools and techniques Coca-Cola has used throughout the years since this company bases its sales on advertising and placement. The primary purpose of the report is to find out which company is leading the market i.e what are the market shares of the beverage companies and what are the tactics used by the leader which makes them able to control and influence the market. My purpose was also to share maximum information about the products of Cola Cola that are now glued to our daily life consumptions. I have gathered a sound knowledge over the matter and have found this study to be extremely useful to me in my learning experience...

Words: 22254 - Pages: 90