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Background on coca cola
Background on coca cola
Growth of coca cola company
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Coca-Cola Company Analysis
The Coca-Cola company was founded in 1886 by John Pemberton, a Civil War veteran and Atlanta pharmacist. He was inspired by his curiosity as he stirred up a fragrant, caramel-colored liquid that he brought down to a place called Jacobs’ Pharmacy. There he added carbonated water and let several customers sample the new concoction. Jacobs’ Pharmacy put it on sale for five cents a glass and named it Coca-Cola. This “inspired curiosity” has now grown to be the world’s leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups. In 1906 Coca-Cola opened bottling plants in Canada, Cuba, and Panama. Today they produce nearly 400 brands in over 200 countries. More than 70% of their income comes from outside the U.S. (1). This paper will focus on an analysis of operations of the statement of cash flow reports and a vertical and horizontal analysis of the consolidated balance sheets. Also an analysis of the global financial condition of the Coca-Cola Company and the value of goodwill and other intangible assets will be discussed.
The statement of cash flows reports a firm’s major cash inflows and outflows for a period. This statement provides useful information about a company’s ability to generate cash from operations, maintain and expand its operating capacity, meeting its financial obligations, and pay dividends. There are three types of activities to look at in this statement, which are cash flows from operating activities, investing activities, and financial activities (3, 2005).
When analyzing Coca-Cola’s statement of cash flow, the first thing to note is a steady increase in operating activities within the past few years. These transactions affect the net income. From 2001 to 2003 the cash from net income increased from $4.1 million to $5.5 million. The operating activities is often the most important cash flow of a business because it shows the cash from revenue compared to the payments made for expenses (2).
The cash flows from investing activities are cash flows from transactions that affect the investments in non-current assets. Some of these include investments in bottling companies; purchases of property, plant and equipment; and purchases of investments and assets. For the most part, these figures have remained fairly stable. From 2001 to 2003 it went from $1.1 million to $9.3 million, showing a slight decline (2).
The last part of this report is the cash flow from financing activities.
In order to determine the value of operations, and using proforma income statement and balance sheet statement, Cash flow statement was formulated for the next 5 years. The Account Receivables plus the Inventory minus the Account Payable was determined as Net Operating Working Assets. An organization cost of 0,000 was amortized over the 5-year period.
In Be Our Guest, Inc.’s scenario, we can see that the total cash flow from operations increased from 1995, $168,000, to 1997, $229,000, by 37%. This increase to the CFO is a result of a few different accounts. Although net income decreased 22.8% from 1995 to 1997, because depreciation increased 25.8% from 1995 to 1997, the total net income adjusted for non-cash charges increased by 4% from $250,000 to $259,000, from 1995 to 1997. The changes to Accounts Receivable over the years reduce cash flow from operations by $75,000, $46, $42,633 in 1995, 1996, and 1997, respectively. These increases in accounts receivable cause the cash flow from operations to decrease because Be Our Guest, Inc. collected less money from their customers compared to the sales. Whereas, the changes in Accounts payable & accruals of, $5,768, $19,063, and $14,859, in 1995, 1996, and 1997, respectively, caused the cash flow from operations to increase because Be Our Guest, Inc. is paying their suppliers less, indicating they are retaining more cash for
Net cash from operations rose from 2007 at $146.9 million to 2011 at $411.1 million
GAAP and IFRS), there are two allowable ways and means to actually display the operating portion of the statement of cash flows: The direct approaches, happens to be referred to as this because of the summing of money/cash on conditions that it is used by operating activities of $930, and is composed of cash inflows & outflows that can basically be traced straight to the cash T-account. & The Indirect Method, is allowable under GAAP and is another technique of actually computing/calculating and making known money/cash on condition that it is used by operating activities. Among other things, under this particular approach, money/cash on the condition that it is used by operating activities is actually calculated indirectly by starting with the Net Income estimations, which is shown on the income statement, and adjusting it for differentiation between cash flows &
The cash flow statements for Microsoft, Corp. for the past three years had an up and down
Furthermore, the cash-flow demonstrates the monetary receipts and monetary expenses in a certain time period. The cash-flow budget greatly centers on viability, which relates to the organization’s generating enough cash to meet both short-term and long-term financial obligations to maintain their existence (Finkler et al., 2013). In essence, an organization generating more cash than using in their operations produces a more
The increase in cash and cash equivalents reflected strong cash flows from operations during the year, offset by contributions of $308.1 million to the Corporation's pension plans. Prepaid expenses and other current assets reflected higher prepaid pension expense associated with the funding of pension plans during the year and increased original margin balances for commodity futures. The elimination of current deferred income taxes resulted primarily from the significant liability related to the tax effect on other comprehensive income associated with the gains on commodity futures contracts during the year. Property, plant and equipment was lower than the prior year primarily due to depreciation expense of $155.4 million and the retirement of property, plant and equipment of $19.0 million, partially offset by capital additions of $132.7 million. The decrease in goodwill primarily reflected the impact of the sale of certain confectionery brands to Farley's & Sather's and foreign currency translation. The increase in other non-current assets primarily resulted from the pension plan funding during the
Coca –Cola (KO) is one of the world’s largest beverage companies. Company was incorporated in September 1919 under the State of Delaware law and headquarters is located in Atlanta Georgia. But from 1886, company established its brand in US (Coca-Cola, 2012, p. 1). Currently company is providing for more than 500 varieties of non-alcoholic sparkles to the customers around the world. Apart from this, company also serve for still beverages that includes enhanced water, water, ready-to-drink, juices, energy drink, sport drinks and so on.
The project is on Asset Management in coca cola, strained from annual reports of the company. The subject matter is partial to Asset Management, its scrutiny and its performance valuation but not to any other areas of accounting, corporate, marketing and financial matters.
The management of cash is essential to the survival of any organization. Managing an organization’s financial operation requires knowledge of the economy and ways to maximize revenue. For any organization to operate on a daily basis adequate cash flow is required. Without cash management the organization will be unable to function because there is no cash readily available in case of inconsistencies in the market. Cash is also needed to keep the cycle of the company’s operations going.
The purpose of this report is to compare financial reports from the two largest soft drink manufacturers in the world. The Pepsi Co. and Coca Cola have been the industry's leaders in their market since the early 1900's. I will use relevant figures to determine profitability, and break down key ratios in profitability, liquidity, and solvency. By breaking down financial statements, and converting them to percentages and ratios, comparisons can be made between competitors regardless of size.
Vertical analysis is used to evaluate data and express the items of a financial statement as a percentage of a base amount listed. For the vertical analysis of PepsiCo and Coca Cola I looked at both the balance sheet and the income statements. The valuations that I took into consideration for this vertical analysis were the cost of goods sold as a percentage of net sales, net income as a percentage of net sales, current assets compared to total assets and the percentage change year to year, and the current liabilities compared to total liabilities and the percentage change from year to year. The cost of goods sold percentage shows how much is actually costs to produce and sell the items that a make company money. The net income as a percentage of sales shows how much money from the sale of an item is actually considered income that the company makes. The current assets compared to total assets shows how much of the assets a company has are actually available at a given time. The current liabilities compared to total liabilities shows how much of a company’s liability lays in a current status for the year.
The selected business organization is Coca Cola Company. This company is well known for production of soft drinks and beverages, which include coke, fanta, sprite, krest, among many other brands. On the other hand, it is best to note that this firm is an American business organization, retailer, manufacturer, and marketer of non-alcoholic drinks. The headquarters of this multinational corporation is in Atlanta. Most importantly, the company is worldly known for its global brand name of Coca Cola. Furthermore, the company makes distributions to more than 200 countries as it offers more than five hundred brands of its beverages to people for consumption. In essence the company serves close to two billion people globally each day. Moreover, the business organization operates a franchise business system of distribution whereby it gains a lot from this particular mechanism (Mike 2001).
Cash flow statements provide essential information to company owners, shareholders and investors and provide an overview of the status of cash flow at a given point in time. Cash flow management is an ongoing process that ties the forecasting of cash flow to strategic goals and objectives of an organization. The measurement of cash flow can be used for calculating other parameters that give information on a company 's value, liquidity or solvency, and situation. Without positive cash flow, a company cannot meet its financial obligations.