FINANCIAL MANAGEMENT

Financial Management

Task: 1

Financial analysis of Coca-Cola

For the course of the study, “coca-cola” company is selected; the study will critically analyze the financial performance of the company by analyzing different financial information relating to the company. Coca-cola is a leading carbonated multinational company operating in more than 200 countries (Mark 2000, pp. 19-45). The company selected due to its extended business operations and, the financial analysis of the company will provide an ample opportunity to understand applications of different financial management functions.

Type

Public (listed in NYSE )

Foundation

1892

Headquarters

Atlanta, Georgia, U.S.

Industry

Beverages

Income

88,000 million dollars (2010)

Operating profit

35,230 million dollars (2010)

Net profit

102,820 million dollars (2010)

Assets

260,700 million dollars (2010)

Social Capital

55,800 million dollars (2010)

Performance of Coca-Cola Company

Over sales in the North American region for coca-cola has increased with 2 percent rose in the last quarter of the year 2010, whereas the last year increase in the sales were only 1 percent. The volume of the juice sales has increased by 7 percent, led by brands like simply juices. After 2006, it is the first time that coca-cola has witnessed a sales increase in the North American region. The chief executive officer of the company Muhtar Kent has expressed that the company's new strategy has resulted in the overall increase in the sales (Mockler 2002, pp. 45-67). The new bottle shape of the beverage in a 2-liter pet has gained access in 4 million improved household and, consumers have found it convenient to store it. More over the company has also extended its products with the introductions of different brands such as drinking mineral water and exotic juices brands.

Income Statement

The three years income statement analysis of the company shows that the financial performance of the company is improving with total revenues increasing from 30,990,000 (2009) to 35,119,000 in the year 2010 which is more than 13%. The gross profit of the company has also increased from 19, 902,000 (2009) to 22,426,000 in (2010). The operating income for the year 2010 has increased from 8,231,000 to 8,449,000 which is a positive outlook and indicates a positive growth trend for the company (Helfert 2001, pp. 35-62). The net income from continuing operations of the company has also increased from 7,605,000 (2009) to 12,834,000 (2010), which is a quite significant increase and a positive outlook for the company. The net income of the company has increased significantly from 6,824,000 to 11,809,000 (2010) which is around 70% increase.

Balance Sheet

The balance sheet analysis of the company for the past three years shows that assets of the company have increased with a significant percentage of more than 55%. The current assets of the company has also increased significantly from 17,551,000 (2009) to 21,579,000 in (2010). On the other hand the total liabilities have also increased from 23,872,000 (2009) to 41,918,000 in 2010 with almost 57% (Helfert 2001, pp. 35-62). The total shareholders' equity for the year 2010 has increased from 24,799,000 to 31,003,000 in 2010. The net tangible assets of the company have decreased with more than ...