Coca Cola's Financial Analysis

Topics: Balance sheet, Coca-Cola, Asset Pages: 8 (2363 words) Published: May 27, 2012
Coca Cola’s Financial Analysis

Coca Cola’s Financial Analysis
Danielle Nicole Lewis
Hawaii Pacific University

Coca Cola’s Financial Analysis: History and Current

The Coca Cola Corporation is an American Icon of business that has established a new direction for American Industry operations in the 20th century. According to Moxley (2002), “Beginning with its invention in 1886 by druggist John “Doc” Pemberton in Atlanta, the development of the product is shown, along with the changes in American life that accompanied-and affected-the prices. We learn that by giving out free samples and pervasive advertising, Coca-Cola became known throughout the country.” (Moxley, 2002) Coke was a known brand by the turn of the 20th century. The use of free samples gave future customers the chance to try the product risk-free and instil confidence in the owners belief in the quality of the product. According to Moxley (2002), “Bottling plants were shipped around the world, laying the base or the worldwide expansion of the product in the late 1940s and 1950s. Throughout, the evolution of advertising and changes in packaging is shown through print and film ads, demonstrating the changes brought about by the culture of the time.” (Moxley, 2002) Coke’s history points to the importance of packaging and marketing as a function of distribution and sales. The company developed bottling plants to bottle the elixir and establish a quantification method to manage inventory of bottles and to plan distribution routes and channels. According to (Dietz ,1993), “During World War II the U.S. military allowed Coke bottling plants to be set up wherever U.S. troops were stationed, which created a world-wide distribution system. The popularity of the drink extended even to the Soviets. And then there is the matter of the introduction of “New Coke.” (Dietz, 1993)

Current Operations
Coke currently operates in each continent across the world and employs an international workforce in companies throughout the world. Coke and Cadbury Schweppes merged at the beginning of the millennium. M&A activity has been rather common in the operations of Coke. According to Financial Markets, (2010), “”Today begins the next era of winning for our North America system” said Muhtar Kent, Chairman and CEO, The Coca-Cola Company. “With the completion of this transaction, the Coca-Cola Company has renamed the sales and operational elements of the North American businesses, Coca-Cola Refreshments USA, Inc. (“CCR”) and Coca-Cola Refreshments Canada Company, which will be wholly-owned subsidiaries of The Coca-Cola Company and led by CCR President and CEO Steve Cahillane. CCR will integrate five business components into a 21st century bottling and customer service operation in both the U.S. and Canada. The five components formerly were CCE North America; CCNA Foodservice; the Minute Maid and Odwalla juice businesses; CCNA Supply Chain Operations and the Company-owned bottling operations in Philadelphia.”” (Financial Markets, 2010)

Financial Analysis
Balance Sheet
A balance sheet is a summary of the financial balances of a company. A balance sheet is often described as a snapshot of a company's financial condition. A standard company balance sheet has three parts: assets, liabilities and ownership equity. Assets refer to the current and fixed assets. (Gallagher, 2010) For current assets, Coca Cola has $8.379 billion in cash at the end of 2010. Customers owe the company over $4 billion. KO also has $2.65 billion in inventory. The sum of all current assets, including cash, net accounts receivable, and inventory, if often referred to as the working capital. For KO, this figure is $21.579 billion. Next to be listed are the fixed assets of Coca Cola. “Fixed assets are expected to provide a benefit to the firm for more than one year. They are normally less liquid than current assets.” (Gallagher, 2010) Net fixed assets for...

Bibliography: Dietz, L. S. (1993). We 'll Buy it FOR GOD, COUNTRY AND COCA COLA. Los Angeles Times . Mark Pendergrast.
Financial Markets. (2010). Investment Weekly News. Retrieved Mar 17, 2011, from The Coca-Cola company finalizes transaction with coca-cola enterprises. :
Gallagher, T
Investopedia. (2011). Price to Earnings Ratio. Retrieved March 17, 2011, from Price to Earnings Ratio:
Moxley, M
Stanford, S. M. (2010, November 4). Coca-Cola May Sell $4 Billion of Bonds for Tenders. Retrieved March 17, 2011, from Bloomberg :
Yahoo Finance
Balance Sheet
Period Ending | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 |
Period Ending | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 |
Net Income | 11,809,000   | 6,824,000   | 5,807,000   |
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