Financial Statement Analysis of Coca-Cola, 2002

Only available on StudyMode
  • Download(s) : 148
  • Published : January 16, 2011
Open Document
Text Preview
Financial Statement Analysis of Coca-Cola, 2002
Uploaded by craigi on Jun 13, 2006

Financial Statement Analysis of Coca-Cola, 2002
The following is an analysis based on the annual report presented by the Coca Cola Company, year 2000. I will on behalf of the information shown in the balance sheet, income statement and the cash flow statement, conduct a number of calculations of ratios. Furthermore comment on changes providing an overall status rapport compared to estimations from previous year.

Coca Cola Company, year 2000

Structure of the company’s assets

2000 1999 Changes in %

Total Assets ($): 20834 21623 96.4

Ratio of Fixed Assets : 68.2% 70.0% 97.4

Inner Structure of fixed assets:

• Intangibles 13.5% 13.0% 103.8

• Tangibles 29.3% 28.2% 103.9

• Investments 57.2% 58.8% 97.3

Ratio of Current Assets : 31.8% 30.0% 106

Inner structure of current assets:

• Inventories 16.1% 16.6% 97.0

• Receivables 25.5% 27.7% 92.1

• Cash & equivalents 27.5% 24.9% 110.4

• Other Assets 28.8% 27.7% 104.0

• Marketable Securities 1.1% 3.7% 29.7

Evaluation

There was a slightly decline in total assets from 1999 till the end of 2000. In percentages a decrease of 3.65, having it reduced from $21623 to $20834 respectively.

Reviewing the structure of assets no major alterations have incurred during this period. Otherwise fixed assets, represents an amount close to 68-69% of total assets. Looking further into this section the governing segment, namely investments, has decreased by 1.69 percentage point. While intangibles and tangibles increasing near to 1 percentage point each, compared to numbers published in 1999.

The current ratio has increased by six percent since 1999. Now contributing to the extension with an approximately 30 percent of total assets. Inventories and receivables declining with a non-significant fraction while cash and equivalents rising with 2.2 percent.

Having stated the circumstances in regards to the decline in total assets, small adjustments have been made, causing diminutive effects on the structure of the company.

Structure of Equities

2000 1999 Changes in %

Ratio of Stockholders’ Equity : 44.7 44.0 101.6

Ratio of Liabilities : 55.3 56.0 98.8

Ratio of Net Indebtedness : 46.9 47.7 98.3

Inner Structure of Liabilities:

• Long-term liabilities 80.9 81.4 99.4

• Short-term liabilities 19.1 8.6 222.1

Growth of Stockholders’ Equity : 1.5 1.5 100.0

Evaluation

The long term debt to equity ratio has increased slightly from 44 to 44.7 percent primarily due to the reduction in equity (due to the income loss). Long term debt to total capital has improved slightly from 81.4 to 80.9 percent. The reason impacting this is the high increase in short-term liabilities. Negative in the sense that they are due within a year and will probably have an effect on liquidity.

Liquidity

2000 1999 Changes in %

Current Ratio : 71.0 65.7 108.0

Current Ratio II : 38.3 34.6 110.7

Quick Ratio : 19.5 16.3 119.6

Credit Coverage Ratio : 18.8 18.2 103.3

Dynamic Liquidity : 18.9 20.1 94.0

Short-term Dynamic Liquidity : 23.4 24.7 94.7

Evaluation

The current ratio which measures a company’s ability to meet its current obligations has increased from 65.7 in 1999 to 71 percent in 2000. At first glimpse a good indication, knowing that the largest proportions are more or less equally spread, within current assets.

Current Ratio II gives us an improved sight into the issue, in regards to whether it can meet its current obligation or not. Having 18.2 percent covered in 1999, and 18.8 in 2000, gives an indication that it has indeed increased covering a larger part. At the same time having covered such small percentages, compared to the high increase of short-term liabilities, may cause some problems of concern.

The Quick Ratio increasing by 3.2 percentage points from 1999 to 2000 shows us...
tracking img