Financial Assessment – Coca-Cola Company Mata Diarra Bowie State University Overview Coca-Cola Company has over 500 nonalcoholic brands including juices, energy drinks, and water, among others. It is undisputed the largest beverage firm globally. The firm started operations in the year 1886 in the United States, but currently, the company operates in over 200 countries ("Form 10-K", 2017). The firm prides itself on globally recognized nonalcoholic brands such as Coca-Cola, Fanta, Sprite and Diet Coke. One of the critical successes factors of the company is its efficient distribution system that makes it possible to distribute the products to every part of the world. The company has a network of companies controlled or owned …show more content…
They help to establish the performance and state of a firm’s operations that would otherwise not be reflected by individual item in the financial statements (Ittelson, 2009). The ratios help in identifying different aspects of a firm’s performance including profitability, liquidity, and financial leverage of a firm among others. This article determines the profitability, liquidity and the financial leverage of Coca-Cola Company. Coca-Cola Company Profitability This ratio determines the ability of the firm to generate profit by utilizing resources at its disposal. For instance, a firm can be assessed in determining the extent to which it uses the assets in making income. Return on Assets This ratio shows the ability of a firm to optimally utilize the assets in generating income. A high value indicates the firm optimally uses assets in generating income and vice versa. Return on assets = Income / Total …show more content…
This indicates PepsiCo optimally utilizes the assets in generating income. On this metric, PepsiCo operates profitably compared to Coca-Cola. Return on Sales Year 2014: $6,558m / $66,683m = 0. 098 = 9.8% Year 2015: $5,501m / $63,056 = 0.087 = 8.7% Year 2106: $6,379m / $62,799 = 0.102 = 10.2% From the analysis, the return on sales has increased over the recent three years. This indicates that the firm demand of the firm’s products has a positive trend. This is contrary to the return on sales for Coca-Cola which is relatively constant. Thus, the PepsiCo sales are on a positive trend. PepsiCo Liquidity Analysis Current ratio = Current assets/ Current liabilities Year 2014: $20,663 / $18,092 = 1.142 Year 2015: $23,031/ $17,578 = 1.31 Year 2016: $27,089 / $21,135 = 1.282 The current ratio over the three years shows that the firm has no difficulties in paying short-term liabilities in time. At every year under consideration, the current ratio is above 1 (one) indicating the firm can pay the current liabilities with the current assets without using other sources such as debt
Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories, profitability, asset utilization, liquidity and debt utilization ratios. The ratio analysis covered here consists of eight various ratios with at least one from each of these main categories. These ratios were used to compare and contrast the performance of Verizon versus AT& T over the years 2005 and 2006.
This ratio helps in analysing the position of the company to satisfy its short term debts within a period of one year. The higher the current ratio would be the more the company will be in position to satisfy its short term debts.
This is another sign of a strong company, although it is not uncommon for a company to have a down year. These ratios show the following: · Nike has a very good ability to pay current liabilities. This was evident in the current ratio and the acid test. · Nike has an excellent ability to pay short term and long-term debt. This was proven in the debt ratio and times-interest-earned ratio.
One area to look when examining the financial standing of Nike is to look at the profitability ratios. The profitability ratios are ratios that can be used to assess a company’s ability to generate revenue as compared to the company’s expenses. When looking at the profitability ratios the first thing is gross
As we all should know, PepsiCo is one of the world’s leader in convenient food and beverages. PepsiCo shares are traded worldwide and particularly in NYSE (United States). PepsiCo is in the same line with Coca cola and Cadbury Schweppes as the dominating beverage companies. PepsiCo has successfully built a great brand name rivaling with coca cola, probably because PepsiCo unlike coca cola has its own bottling companies. With a competitive strategy based on differentiation rather than cost leadership like its fellow competitors PepsiCo invests highly in new packaging, flavors, formulas to outsmart their competition. Founded in 1919, producing a variety of sweet and grain-based snacks, carbonated and non-carbonated
Ratios traditionally measure the most important factors such as liquidity, solvency and profitability, as well as other measures of solvency. Different studies have found various ratios to be the most efficient indicators of solvency. Studies of ratio analysis began in the 1930’s, with several studies of the concluding that firms with the potential to file bankruptcy all exhibited different ratios than those companies that were financially sound.
Lastly, profitability ratio measures the effectively of the company in managing its resources to generate income, identifies the capacity of a company in making profit and provides insight to investor regarding the company performance. Thus, return on assets and return on equity will be computed.
The Coca-Cola Company is an international company that deals in beverage and has its headquarters in Atlanta, Georgia. It deals in manufacturing, distributing, marketing and retailing of non-alcoholic beverages, syrups, and concentrates. Coca-Cola is most famous for its drink, Coca-Cola that was invented by the pharmacist, John Stith Pemberton in Columbus. The formula for the beverage was later bought in 1889 by Asa Griggs who incorporated it into the company. In its lifetime, the company has had a lot of acquisition, such as Minute Maid, Thums Up and Odwalla fruit juices brand. The company is a public corporation, and its shares are publicly traded.
Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.
There are over 5000 companies currently listed on the three main U.S. stock exchanges. There are constantly companies being added while others disappear. Two of the most profitable and longest mainstays on the market are the Coca Cola Company and PepsiCo Inc. Chances are, if you’ve owned stock in one of these companies, you’ve made a lot of money over the years. That’s not the purpose of this analysis though. We’re here to examine the financial outlook of each company for the future as well as compare the two companies from several important monetary angles. These companies, as well as all of the others listed on the stock exchanges, are used as investments for external users as well as internal ones.
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.
The Coca-Cola Company is the world’s largest beverage company and is the leading marketer and producer of soft drinks. Today, Coca-Cola is consumed globally at the rate of over 600 million times per day. Nevertheless, Coca-Cola doesn’t live on its past achievements, instead it looks to the future as a challenge and continually seeks new markets and ideas of increasing its market share in locations where it presently has a strong company. This company is the world’s largest producer and distributor of concentrates and syrups for soft drinks. Products developed by the Company are sold through fountain wholesaler, bottlers, and distributors globally (Business Case Studies, 2017).
In the more than 130 years of doing business the Coca-Cola has grown into the third most valuable brand in the beverage industry with 2015 value of $78.4 billion (The Financial Canadian, 2017). Coca-Cola products are sold in more than 200 countries with more than 1.9 billion
The Coca-Cola Company (TCCC), is one of the world's largest beverage company. Although the Company is an American company, has factories in many parts of the world. Directors and chief executive Muhtar Kent is a U.S. citizen of Turkish origin. Today, Coca-Cola is consumed throughout the world at the rate of more than 600 million times per day and this figure is continuing to rise. However, Coca-Cola is not the sort of company to live on its past glories; instead it looks to the future as a challenge and constantly seeks new markets and ways of increasing its market share in areas where it currently has a strong presence. It is the world's largest producer and distributor of syrups and concentrates for soft drinks. Products developed by the Company are sold through bottlers, fountain wholesalers and distributors around the globe. Brand Coca-Cola accounts for about 75 per cent of the Company's unit sales volume of soft drinks.