Finance Analysis Coca-Cola

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Business Valuation of Coca-Cola Company

February 25, 2010

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Prepared for:
Frank Smith
CEO SmartStockSystems

Prepared by:
Haofeng Li
Henderson State University
— Table of Contents —

Part I - Company background
1. Nature & history of the company ………………………………………………..3 2. Management team & staffing ……………………………………………………4 3. Product & service information …………………………………………………..6 4. Market data & analysis ……………………………………………….…….……6 5. Marketing strategy ...………………………………………….…….……………7 6. Current operations ………………………………………………….…….…..….7 7. Company expectations.……………………………………………………..…….7 8. Other observations …………………………………………………………….....8 Part II - National economic & industry conditions

2.1 General economic conditions & outlook ……………………………………..…...9 2.2 Industry conditions & outlook ...……………………………………………… .…9 Part III - Historic financial statements & analysis
1. Summary historic income statements ……………………………………………10 2. Summary historic balance sheets .………………………………………………..12 3. Summary historic statements of cash flows .……………………………………..14 4. Business common-size financial statements .……………………………………15 5. Coca- Cola vs. Pepsi common- size financial statements …….………………….18 6. Historic financial ratio analysis.………………………………………………… 22 7. Coca-Cola’s Statistics compared to Sector.…………………………………… . .23 Part IV - Financial statement projections

1. Income statement projections for Fiscal year 2011 .………………………… . . .30 2. Balance sheet projections for Fiscal year 2011 ….…………………………........32 Part V - Cost of Capital …………………………………………………………….…....36 Part VI - Working Capital Management ………………………………………..….........38 References………………………………………………………………………..………39

Part I - Company Background

1.1 Nature & History of the Company

The Coca-Cola Company (TCCC) was established in 1886 and is one of the most recognized brand names than any other product on the planet. In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded by developing Coca-Cola, essentially a non-alcoholic version of French Wine Coca. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a patent medicine for five cents a glass at soda fountains, which were popular in the United States at the time due to the belief that carbonated water was good for the health. Pemberton claimed Coca-Cola cured many diseases, including morphine addiction, dyspepsia, neurasthenia, headache, and impotence. Pemberton ran the first advertisement for the beverage on May 29 of the same year in the Atlanta Journal. Nowadays, the company’s headquarters are also in Atlanta, Georgia where it employs more than 70,000 people. Coca-Cola often referred to simply as Coke. Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The Coca-Cola Company is the world’s largest soft drink maker, and the manufacturer and distributor of concentrated syrups, which are sold to individual fountain retailers and bottling companies at a high volume, high margin business model. It also produces finished beverages in its manufacturing facilities. It owns or licenses over 500 brands of nonalcoholic beverages, and has expanded into non-traditional soft drink markets such as enhanced water, sports drinks, juices, teas and coffees.

Company Fast Facts
1. Coca-Cola’s headquarters are in Atlanta, Georgia where it employs more than 70,000 people. 2. The Coca-Cola Company is the world’s largest soft drink maker, and the manufacturer and distributor of concentrated syrups and one of the most recognized brand names than any other product on the planet. 3. The company owns or licenses more than 500 brands, including diet and light beverages, waters,...
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