Scope and Size of the Coca-Cola

Date:  2021-03-06 17:06:07
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The Coca-Cola Company is the worlds largest beverage producing company in existence since 1886. Established and headquartered in the U.S, the company owns and markets over 500 nonalcoholic beverage brands (Bryant, 2012). This does not include over 3500 different sparkling beverages from water, enhanced water, juices, ready-to-drink teas and coffees, and energy drinks are now sold in more than 200 countries all over the world. Coca-Cola owns 15 billion dollar brands including Coca-cola, diet coke, Fanta and Sprite (Bryant, 2012) (worlds top four nonalcoholic beverage brands).

The Coca-Cola Company is a wide-reaching corporate that maneuvers on a local scale in every community where it does business. Its capable of creating global reach with local resources because of the strength of its system, which comprises itself and its bottling partners-approximately 275 internationally. Through this successful collaboration, the Coca-Cola Company can sell its products to consumers at a rate of 1.9 billion servings per day (Wahlen, Bradshaw, & Baginski, 2014). Its worldwide workforce is approximately 146000 totaling employees from its six operating groups: Latin America, North America, Eurasia and Africa, Europe, Asia Pacific and the bottling investments (Wahlen, Bradshaw, & Baginski, 2014).

Its main competitors include PepsiCo Inc., Dr. Pepper Snapple Group, Inc., Unilever, Groupe Danone, Kraft Foods Inc., Nestle S.A and many others.

Strengths and Weaknesses

Strengths

Its the worlds best brand (regarding value, value at $77,839 billion) according to the Inter-brand (McGowan, Gardner & Moeller, 2015).

The worlds largest market share in beverage, it controls 44% of the global market share (Wahlen, Bradshaw, & Baginski, 2014).

Robust marketing and advertising. In 2012, only more than $3 billion were accounted for as advertising expenses that increased firms sales and brand recognition (McGowan, Gardner & Moeller, 2015).

Uses the most extensive beverage distribution channel serving more than 200 nations and approximately 1.7 billion servings per day (McGowan, Gardner & Moeller, 2015)..

Bargaining power of suppliers and customers' loyalty. It utilizes its significant power over its suppliers to receive the lowest price available from them.

Weaknesses

Major focus on carbonated drinks. This strategy works in the short term as the use of carbonated drinks will increase in emerging economies. Nevertheless, it will prove weak as the worlds are fighting obesity and are moving towards consuming healthier foods and drinks.

Undiversified product portfolio - The overall consumption of soft drinks is stagnating, and the company will find it hard to penetrate into other markets when it has to sustain the current level of growth.

High debt level due to acquisitions.

Adverse publicity. Its often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drinks.

Brand failure or many brands with an insignificant amount of revenues. The company currently sells more than 500 brands yet only a few brands results in more than $1 billion sales (McGowan, Gardner & Moeller, 2015).

Financial and non-financial performance analysis LINK Excel.OpenDocumentSpreadsheet.12 "C:\\Users\\Samuel Macharia\\Downloads\\Income-Statement (1).ods" "Income Statement!R1C1:R14C4" \a \f 4 \h \* MERGEFORMAT

Coca-Cola Co., selected income statement items, long-term trends

12 months ended 13 months ended 14 months ended 15 months ended

Dec 31, 2005 23,104 6,085 4,872

Dec 31, 2006 24,088 6,308 5,080

Dec 31, 2007 28,857 7,252 5,981

Dec 31, 2008 31,944 8,446 5,807

Dec 31, 2009 30,990 8,231 6,824

Dec 31, 2010 35,119 8,449 11,809

Dec 31, 2011 46,542 10,154 8,572

Dec 31, 2012 48,017 10,779 9,019

Dec 31, 2013 46,854 10,228 8,584

Dec 31, 2014 45,998 9,708 7,098

Sources: Data retrived from Coca-Cola Co. Annual Reports

 

The liquidity ratio of the Coca-Cola Company

Dec 31, 2014 Dec 31, 2013 Dec 31, 2012

Current ratio 1.02 1.13 1.09

Quick ratio 0.81 0.90 0.77

Cash ratio 0.67 0.73 0.59

Source: Data retrieved from Coca-Cola Co. Annual Reports Source: www.stock-analysis-on.net Current ratio It can be calculated as

Current AssetsCurrent LiabilitiesCoca-Cola current ratio improved from 2012 to 2013. However, it deteriorated from 2013 to 2014.

Quick ratio Can be calculated as:

cash + short-term marketable investments + receivablescurrent liabilitiesCoca-Cola quick ratio raised from 2012 to 2013. It did not perform as well in 2013 and 2014 not reaching 2012 level.

Cash Ratio cash + short-term marketable investments current liabilities.Coca-Cola cash ratio is improved from 2012 to 2013. It then performed slightly poorly from 2013 to 2014.

Profitability ratios

Dec 31, 2014 Dec 31, 2013 Dec 31, 2012

Return on Sales Gross profit margin 61.11% 60.68% 60.32%

Operating profit margin 21.11% 21.83% 22.45%

Net profit margin 15.43% 18.32% 18.78%

Return on Investment Return on equity (ROE) 23.41% 25.88% 27.51%

Return on assets (ROA) 7.71% 9.53% 10.47%

Source: Data Retrieved from Coca-Cola Co. Annual Reports Gross profit margin It shows the percentage of revenue available to take care of operating and other expenditures. Coca-Cola Company's gross profit margin improved from 2012 to 2013 as well as 2013 and 2014.

Operating profit margin It is a profitability ratio computed as: operating income revenueCoca-Cola Companys operating profit margin has been performing poorly from 2012 to 2014 without signs of improving

Net profit margin It is an indicator of profitability. It can be calculated as:

net income RevenueCoca-Cola Companys net profit margin has performed poorly since from 2012 to 2014. The trend was the same as that for the operating profit margin.

ROE ROE is a profitability ratio. It can be computed as: net income shareholders' equity. Coca-Cola Company's ROE was deteriorating from 2012 to 2014

ROA It is computed as:

Net income Total assets. Coca-Cola 's ROA also deteriorated from 2012 to 2014

Consolidated balance sheet

Coca-Cola Enterprises Annual Balance Sheet Period Ended 12/31/2014 12/31/2013 12/31/2012 12/31/2011 12/31/2010

Update Reclassified Update Reclassified Update

10/30/2015 10/30/2015 10/30/2015 10/30/2015 10/30/2015

In millions of USD

(except for per share items)

Cash & Equivalents 223 343 721 684 321

Cash and Short Term Investments 223 343 721 684 321

Accounts Receivable - Trade, Gross 1,531.00 1,531.00 1,449.00 1,403.00 1,345.00

Provision for Doubtful Accounts -16 -17 -16 -16

Accounts Receivable - Trade, Net 1,581.00 1,604.00 1,498.00 1,451.00 1,415.00

Receivables - Other -- -- -- -- 0

Total Receivables, Net 1,581.00 1,604.00 1,498.00 1,451.00 1,415.00

Inventories - Finished Goods 238 260 220 225 230

Inventories - Raw Materials 150 192 166 178 137

Total Inventory 388 452 386 403 367

Prepaid Expenses -- -- -- -- 127

Deferred Income Tax - Current Asset 67 31 -- -- --

Other Current Assets 201 138 157 148 --

Other Current Assets, Total 268 169 157 148 --

 

Total Current Assets 2,460.00 2,568.00 2,762.00 2,686.00 2,230.00

 

Buildings - Gross 961 1,024.00 948 880 887

Land / Improvements - Gross 147 166 161 154 157

Machinery / Equipment - Gross 2,735.00 3,095.00 3,349.00 3,049.00 2,933.00

Construction in Progress - Gross 133 178 241 214 124

Other Property / Plant / Equipment - Gross 287 268 379 320 291

Property / Plant / Equipment, Total - Gross 4,263.00 4,731.00 5,078.00 4,617.00 4,392.00

Accumulated Depreciation, Total -2,162.00 -2,378.00 -2,756.00 -2,387.00 -2,172.00

Property / Plant / Equipment, Total - Net 2,101.00 2,353.00 2,322.00 2,230.00 2,220.00

Goodwill, Net 101 124 132 124 131

Intangibles, Net 3,641.00 4,004.00 3,923.00 3,771.00 3,828.00

Defered Income Tax - Long Term Asset 88 260 -- -- --

Other Long Term Assets 152 216 371 283 187

Other Long-Term Assets, Total 240 476 371 283 187

Total Assets 8,543.00 9,525.00 9,510.00 9,094.00 8,596.00

Accounts Payable 641 631 565 589 606

Payable / Accrued -- -- 784 705 --

Accrued Expenses 1,104.00 1,183.00 288 262 1,035.00

Notes Payable / Short Term Debt 0 0 0 0 0

Current Portion of Long Term Debt / Capital Leases 632 111 632 16 162

Income Taxes Payable 172 229 262 239 139

Deferred Income Tax - Current Liability 9 6 -- -- --

Other Current Liabilities 50 35 48 37 --

Other Current liabilities, Total 231 270 310 276 139

Total Current Liabilities 2,608.00 2,195.00 2,579.00 1,848.00 1,942.00

Long Term Debt 3,294.00 3,695.00 2,834.00 2,996.00 2,124.00

Capital Lease Obligations 26 31 -- -- --

Total Long Term Debt 3,320.00 3,726.00 2,834.00 2,996.00 2,124.00

Total Debt 3,952.00 3,837.00 3,466.00 3,012.00 2,286.00

Deferred Income Tax Long-Term Liability 977 1,103.00 1,128.00 1,191.00 1,238.00

Deferred Income Tax 977 1,103.00 1,128.00 1,191.00 1,238.00

Other Long Term Liabilities 207 221 276 160 149

Other Liabilities, Total 207 221 276 160 149

Total Liabilities 7,112.00 7,245.00 6,817.00 6,195.00 5,453.00

Common Stock 3 3 3 3 3

Common Stock, Total 3 3 3 3 3

Additional Paid-In Capital 3,958.00 3,899.00 3,825.00 3,745.00 3,628.00

Retained Earnings (Accumulated Deficit) 1,991.00 1,577.00 1,126.00 638 57

Treasury Stock - Common -3,807.00 -2,868.00 -1,831.00 -1,014.00 -200

Translation Adjustment -441 41 -41 -216 -142

Minimum Pension Liability Adjustment -367 -311 -353 -258 -198

Other Comprehensive Income 94 -61 -36 1 -5

Other Equity, Total -714 -331 -430 -473 -345

Total Equity 1,431.00 2,280.00 2,693.00 2,899.00 3,143.00

Total Liabilities & Shareholders' Equity 8,543.00 9,525.00 9,510.00 9,094.00 8,596.00

Shares Outstanding - Common Stock Primary Issue 239.25 257.6 282.04 304.95 332.56

Total Common Shares Outstanding 239.25 257.6 282.04 304.95 332.56

Treasury Shares - Common Stock Primary Issue 115.31 94.78 66.72 38.45 8

Employees 11,650.00 11,750.00 13,000.00 13,250.00 13,500.00

Number of Common Shareholders 12,165.00 13,279.00 13,822.00 14,171.00 14,399.00

Total Current Assets less Inventory 2,072.00 2,116.00 2,376.00 2,283.00 1,863.00

Quick Ratio 0.79 0.96 0.92 1.24 0.96

Current Ratio 0.94 1.17 1.07 1.45 1.15

Net Debt 3,729.00 3,494.00 2,745.00 2,328.00 1,965.00

Tangible Book Value -2,311.00 -1,848.00 -1,362.00 -996 -816

Tangible Book Value per Share -9.66 -7.17 -4.83 -3.27 -2.45

Total Long Term Debt, Supplemental 3,926.00 3,806.00 3,427.00 2,955.00 2,220.00

Long Term Debt Maturing within 1 Year 621 100 619 0 145

Long Term Debt Maturing in Year 2 250 475 100 613 0

Long Term Debt Maturing in Year 3 423 250 474 100 613

Long Term Debt Maturing in Year 4 0 480 250 473 0

Long Term Debt Maturing in Year 5 420 0 460 250 473

Long Term Debt Maturing in 2-3 Years 673 725 574 713 613

Long Term Debt Maturing in 4-5 Years 420 480 710 723 473

Long Term Debt Maturing in Year 6 & Beyond 2,212.00 2,501.00 1,524.00 1,519.00 989

Interest Costs -3 -9 -5 -7 -9

Total Capital Leases, Supplemental 26 31 39 57 66

Capital Lease Payments Due in Year 1 11 12 14 18 19

Capital Lease Payments Due in Year 2 6 11 11 19 21

Capital Lease Payments Due in Year 3 5 9 8 10 11

Capital Lease Payments Due in Year 4 3 4 4 8 9

Capital Lease Payments Due in Year 5 2 2 3 3 7

Capital Lease Payments Due in 2-3 Years 11 20 19 29 32

Capital Lease Payments Due in 4-5 Years 5 6 7 11 16

Capital Lease Payments Due in Year 6 & Beyond 2 2 4 6 8

Total Operating Leases, Supplemental 277 388 395 406 311

Operating Lease Payments Due in Year 1 55 84 88 78 68

Operating Lease Payments Due in Year 2 46 60 72 77 62

Lease Operating Payments Due in Year 3 38 55 55 64 56

Operating Lease Payments Due...

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