The Coca-Cola CompanyA look into the financials of one of the world’s most recognized brands

Introduction: Early Years

• John Pemberton invents Coke in 1886, name is derived from coca leaves and kola nuts.

• 1919 The Coca-Cola Company goes public.• Acquires Minute Maid brand in 1960 and in that decade

releases a string of well known brands such as Sprite and Diet Coke.

• Roberto Goizueta takes the chairman position in 1981 and holds it until his death in 1997 bringing the company from 4 billion dollar company to a 145 billion.

Introduction: The New Millenium

• In the first few years company faces major set backs, cutting some 6000 jobs across the board.

• Releases Vanilla Coke and Diet Coke Lime in this period, both fairly successful launches.

• In 2005 they enter the energy drink market, releasing Full Throttle.

• By the end of 2010 The Coca-Cola Company had bought and consolidated most of the independent bottling agencies responsible for bottling their product.

Where the Company Currently Stands

• One of the most widely know brands worldwide.• Second in its market to Pepsi Co.• Faces stiff competition from Pepsi in soda, bottled water,

and juices.

Current Ratio

2012 2011 20100

0.2

0.4

0.6

0.8

1

1.2

1.4

1.09 1.051.17

1.090.96

1.11.08

0.920.98

Coca-ColaPepsi Co.Dr. Pepper

Debt to Equity Ratio

2012 2011 20100

0.2

0.4

0.6

0.8

1

1.2

1.4

0.990.9

0.76

1.27 1.31.181.23 1.2

0.85

Coca-ColaPepsi Co.Dr. Pepper

Accounts Receivable Turnover Ratio

2012 2011 20100

2

4

6

8

10

12

5.89

9.4210.31

8.73 8.919.67

10.519.9

7.56

Coca-ColaPepsi Co.Dr. Pepper

Return on Equity

2012 2011 20100

5

10

15

20

25

30

35

40

45

27.92 27.37

42.32

28.89 30.3633.38

27.62

25.67

18.7

Coca-ColaPepsi Co.Dr. Pepper

Net Profit Margin Percentage

2012 2011 20100

5

10

15

20

25

30

35

40

18.78 18.42

33.63

9.43 9.69 10.9310.49 10.27 9.37

Coca-ColaPepsi Co.Dr.Pepper

Return on Assets

2012 2011 20100

5

10

15

20

25

10.83 11.21

19.42

8.4 8.99

11.74

6.89 6.68 5.99

Coca-ColaPepsi Co.Dr. Pepper

Key Risks to the Firm

• The Dr. Pepper Snapple group is one of the few companies in this market that managed to become steadily more profitable in recent years

• Pepsi is gaining in popularity all the time and remains stiff competition forcing Coca Cola to constantly try to stay ahead to remain profitable

Their Outlook for the Future

• Within in the industry Coca Cola has managed to hedge out the competition in most of its areas and stay in the lead in terms of profitability. The Coca-Cola Company has managed to stay profitable and create a brand name that has spanned over 100 years. It is likely that Coca Cola will remain one of the dominant soft drink figures for years to come.

Personal Outlook

• The company has a longstanding tradition of topping the industry regardless of economic conditions.

• There profits are exceptional and even in the worst of time they are making serious money.

• They are a really strong investment if you are looking for stability but you will not find the buy low sell high moments as this company rarely is faced by situations which would drastically lower the profitability or health of the company.

References

• I used Mergents company report and competitive report builder http://eres.medaille.edu:2051/companyfinancials.php?pagetype=asreported&compnumber=1832&period=Annuals&dataarea=BS&range=3&currency=AsRep&scale=1000000&Submit=Refresh

• Hoovers Company History http://eres.medaille.edu:2292/H/company360/history.html?companyId=10359000000000