B u s I n e s s R e p o r t A n a l y s i s

• Coca-Cola is the world largest soft-drink company in the world

• The firm makes or licenses more than 3,000 drinks under 500 brand names in some 200 nations

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INDUSTRY

OVERVIEW

Coke 44%

Pepsi 31%

Other 9%

Dr. Pepper

15%

Current CEO Muhtar Kent

CEO

& C

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an

• Mr Kent Joined the company in 1978

• He left in 1999 and become the president and CEO of the Efes Beverage Group.

• He returned back to Coca-Cola and was named CEO.

• He become the chairman of the Board of Directors on April 23, 2009

• The Big 4 Auditors • World largest

professional services firms

AUDITOR

“In our opinion, the financial statements referred to above present fairly in all material respects, the consolidated financial position of The Coca-Cola Company and subsidiaries at December 31, 2009 and 2008. The Coca-Cola Company and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria. “ (10-k) Report

Fair and

EffectiveFair and

Effective

• Net operating revenue decreased• Selling, general and administrative expenses decreased• Equity Income increased• A decrease in expenses and in increase in equity income mostly

accounted for an increase in Net Income attributable to the stockholders

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ratio

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Gross Margin Percentage =

(Revenue – Cost of Goods Sold)/Revenue

2009 – 64.2%2008 – 64.4%2007 – 63.9%

Industry – 59%

ALL DATA IS BASED ON 2009 10K Report UNLESS OTHERWISE STATED

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ratio

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<Inventory Management> Coke uses Average Cost and FIFO Method Inventory is valued at lower cost or market value

Inventory Turnover Ratio =

Cost of Goods Sold/Average Inventory

• Coke (2009): $11,088,000,000/ $ 2,354,000,000 = 4.71

• Coke (2008): $11,374,000,000/ $ 2,187,000,000 = 5.20

• Industry Average : 6.4 (2010 Q1)

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ratio

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<Receivables Management>Receivables Turnover Ratio

=Net Credit Sales/Average Net Receivables

• Coke – 9.2 (2010 Q1)• Industry – 10.2 (2010 Q1)

Allowance for doubtful accounts for 2009 : $55 million

• Coke believes they are not exposed to credit risk because they are geographically diverse. They aren’t afraid of not collecting bad debt because their operations are spread out globally and not specific to one area.

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ratio

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Corporation’s Investing PerformanceCorporation’s Investing Performance

(in millions)

• Decrease in acquisition and investments on trademarks

• Increase in purchase of investments

• Increase in purchase of property, plant and equipment

• Increase in Cash• Increase in Inventories

• Depreciation expense total approximately $1,005 million in 2009, $993 million in 2008 and $958 million in 2007.

• Amortization expense total approximately $18 million in 2009, $19 million in 2008 and $21 million in 2007

• Coca Cola’s acquisition and investment=$300 million in 2009

• Coca Cola has intention to acquire the rest of Fresh Trading Ltd. Between 2010 to 2014• Coca Cola plans to build new factories in

foreign countries

Corporation’s Financial PerformanceCorporation’s Financial Performance

Assessment of Coca-Cola’ Financial Performance

Financing Assets:– Issued 24799 million shares of common stocks to raise $6199.75

million ($0.25 par value)– $ 41,537,000 in retained earnings

Debt & Equity Financing:– Total current liability is $13721 million

– Coca-Cola owns 21.9 million of its own common stocks. They announced a plan(2006 plan) , that company can purchase up to 300 million shares of company’s common stock

Leverage Ratio:

– Coca Cola: 48%– Industry Median: 74%

Solvency Ratio:

– Quick Ratio (Acid Test): 0.9– Industry Median: 0.9

Total Liabilities

Total AssetsDebt-Total Assets Ratio =

Acid-Test Ratio =

Cash + Short-term + Net Current investments receivables

Total Current Liabilities

Liquidity Ratio:

–Coca-cola current ratio is 1.28 –Industry’s current ratio average is 1.30

Interest & Dividends:–In fiscal year 2009 coca-cola earned $249million of interest income compare to $333million in 2008, there is a 25% of change.–Historically, coca-cola pays dividend to stockholders. In 2009, coca-cola pay cash dividend of $1.64 million.–Dividend Payouts Chart

Current Assets

Current LiabilitiesCurrent Ratio =

RecommendationRecommendation

Return on Equity is the amount of net income returned as a percentage of

shareholders equity. It equalsNet Income

Shareholder's Equity Coca-Cola’s Return on Equity = 176.57%

Compared to Pepsico Inc = 41.13%

A dividend yield shows how much a company pays out in dividends each year relative to its share price, and equals

Annual Dividends Per SharePrice Per Share

Coca-Cola’s Dividend Yield = 3.26Compared to Industry Dividend Yield = 2.62

Dividend Payout Ratio shows how well earnings support the dividend payments, and equals

DividendsNet Income

Coca-Cola’s Dividend Payout Ratio = 54.40 Compared to Industry = 12.32

www.reuters.com

A presentation byOygulRingo

KCKaina Mike