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Coca-Cola Garrett Roberts ACG2021 Sec. 008

Coca-Cola Garrett Roberts ACG2021 Sec. 008. . . Executive Summary.

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Coca-Cola Garrett Roberts ACG2021 Sec. 008

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  1. Coca-ColaGarrett RobertsACG2021 Sec. 008 . 

  2. Executive Summary Coca-Cola was established in 1886 and today has plants in 200 countries world wide. Coca-Cola is also the largest producer of non-alcoholic drinks in the world. They have taken steps to supply everyone with a taste of their product. When they say everyone, they mean everyone including countries like China, Brazil, Nigeria. I believe this is a great company that with great success has taken a good idea and made it a great one. For more information contact Coca-Cola at www.cocacola.com for any additional information about the company or its financial reports.

  3. Part A. Introduction • Douglas N. Daft is the chief executive officer • The corporate headquarters is in Atlanta, Ga. • Dec. 31 is the last day of the fiscal year • Coca-Cola is a company that provides a great tasting ice cold beverage for a cheap price. Although Coca-Cola does produce their own product it is up to individual bottling companies to do the bottling for them. • The main geographic area of activity for coke is simply stated, the world. Over 200 countries that have and sell Coca-Cola products, but 68% of its income comes from oversea accounts rather than the U.S. Although the majority 32% of Net Operating Revenue comes from North America.

  4. Part A. Audit Report • Name of the company’s independent auditors. • In your own words, what did the auditors say about the company?

  5. Part A. Stock Market Information • Coca-Cola price per share as of 2/25/04 was $49.65. • In the past year the stock price has varied from a low of $37 to a high of $53 per share • 88 cents dividend per share • All of the information above is as of 2/25/04 • My opinion of the stock is one of prior knowledge. I have had stock in this company for many years and it has not shown any substantial gains in the last five years. I am not happy in the least with this investment and would not recommend buying this stock to anyone.SELL STOCK TODAY.

  6. Part B. Industry Situation and Company Plans I believe that Coca-Cola the company is going to do just fine in future years. It has become in a way its own industry, originating in the U.S. and expanding the demand worldwide. There have been steps taken to sell their product to every country in the world. Right now there is 31% of the world population that has a developed or developing Coca-Cola market, accounting for 89% of sales. There is another 69% of the world that does not have a developed plant so there is a great deal of expansion that can and will take place. The more people who try the product the more they will become reliant on it. Thus, the same way Americans have became reliant, so too will sales on a worldwide level.

  7. Part C. Income Statement The format of the Income Statement is in multi-step format. 2002 2001 Net Income 3,050 3,969 Gross Profit 12,459 11,501 Inc. from Oper. 5,458 5,352 All numbers in mill. I believe that these numbers are down because foreign relations are not that high around the world. Many millions of dollars are also being used to build plants overseas to fill that 69% gap of the world that does not have Coca-Cola. The U.S.’s economy is not functioning at a high level at all. These three factors are very substantial because coke is not a mandatory good, it is a luxury good. If money is short(low economy) items like coke will be pushed to the side, but when the economy and international relations get better I believe that coke sales and profits will rise.

  8. Part C. Balance Sheet 2002 Assets = Liabilities + Stockholders Equ. 24,501 = 12,701 + 11,800 2001 Assets = Liabilities + Stockholders Equ 22,417 = 11,051 + 11,366. All numbers in mill. The Asset Account changed the most, but most meaningful was the Liabilities Account. This account went up in 2002, which means that the company is heading in the wrong direction with its expenditures and needs to have better money management.

  9. Part C. Statement of Cash Flows Cash flow is $3,362 and the net income for 2002 was $3,050 Is the company growing through investing activities, i.e., buying property, plant and equipment and other long lived assets? What is the company’s primary source of financing, i.e., long-term loans, stock sales? Overall, has cash increased or decreased over the past two years?

  10. Part D. Accounting Policies What are the significant accounting policies, if any, relating to revenue recognition, cash, short-term investments, inventories, and property and equipment? List the topics of the notes to the financial statements.

  11. Part E. Financial AnalysisLiquidity Ratios • 2002 2001 • Working Capital = 11 (1,258) • Current Ratio = 1.001 .851 • Receivable turnover • Numbers in mill. • Average days’ sales uncollected • Inventory turnover • Average days’ inventory on hand • Regarding Working Capital there is 11 mill dollars the company has to finance and build inventory. • Regarding Current Ratio means that for every 1.001 dollars of current assets there is 1 dollar of current liabilities.

  12. Part E. Financial AnalysisProfitability Ratios 2002 2001 • Profit margin = .156 .226 • Asset turnover = .798 .783 • Return on assets = .124 .177 • Return on equity = .258 .349 • Regarding Profit Margin Coca-Cola made about 16 cents out of every dollar earned. • Regarding Asset Turnover Coca-Cola produced roughly 80 cents in sales for every dollar invested. • Regarding Return on Assets Coca-Cola’s assets generated 12 cents of net income for every dollar invested. • Regarding Return on Equity Coca-Cola generated 26 cents of net income for every dollar invested.

  13. Part E. Financial AnalysisSolvency Ratio • 2002 2001 • Debt to equity = .622 .742 • All that these numbers mean is that in 2002 62.2% of financing come from investors and the rest from creditors or 74.2% in 2001.

  14. Part E. Financial AnalysisMarket Strength Ratios For the past two years, calculate and comment on: • Price/earnings per share = • Dividend yield =

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