OVERVIEW OF COCA-COLA COMPANY

The Coca-Cola Company, incorporated on September 5, 1919, is a beverage

company. The Company owns or licenses and markets over 500 nonalcoholic
beverage brands, primarily sparkling beverages but also a range of still beverages,
such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and
coffees, and energy and sports drinks. The Company's segments include Eurasia and
Africa, Europe, Latin America, North America, Asia Pacific, Bottling Investments and
Corporate. The Company owns and markets a range of nonalcoholic sparkling
beverage brands, including Coca-Cola, Diet Coke, Fanta and Sprite.
The Company markets, manufactures and sells beverage concentrates, which
are referred to as beverage bases, and syrups, including fountain syrups (concentrate
business or concentrate operations), and finished sparkling and still beverages
(finished product business or finished product operations). The Company makes its
beverage products available to consumers across the world through its network of
Company-owned or -controlled bottling and distribution operations, as well as
independent bottling partners, distributors, wholesalers and retailers.
The Company competes with PepsiCo, Inc., Nestle S.A., Dr Pepper Snapple
Group, Inc., Groupe Danone, Mondelez International, Inc., Kraft Foods Group, Inc.,
Suntory Beverage & Food Limited and Unilever.
Here are some products by Coca-Cola Company. It can be subsidize by
category such as for carbonated soft drinks (Coca-cola, Fanta, Sprite), juice and juice
drinks (Minute Maid, Five alive, Simply lemonade) and many more.

BOOK VALUE VS MARKET VALUE

The book value of a company represents how much a company is worth based
strictly on its balance sheet. To find book value, add up everything the company owns
in terms of assets, then subtract everything the company owes, such as debts and other
liabilities. So, basically just find the total equity of a company. Book value reveals
how much the company is worth if it were liquidated and all assets were sold for cash.
But if you want to find the book value per share, just dividing book value by the total
number of shares outstanding, and you can find the book value per share.
Market value is a much easier figure to derive. The market value is simply the
price of each share on the open market or how much it would cost to buy a share of
stock at any given point. While book value represents how much the company's assets
are worth, market value reveals what investors think the company is worth and how
much they will pay to buy stock in the firm.
Now, lets try to find the book value and market value of Coca-Cola Company
for 2015. It is compute in millions.
a. Book Value
2015

Book Value

= 25,764

b. Market Value

2015

Market value = Stock price x Outstanding shares

= 18,078,644

2014

2014

This information is very important for shareholders, especially the market

value. Because market value has a more meaningful implication in the sense that it is
the price you have to pay to own a part of the business regardless of what book value
is stated. After all, when you invest in a share of stock or something like that, you
want to really know that you are paying for sensible price.
When the market value greater than book value, it means that market assigns a
higher value to Coca-Cola, and it absolutely attracts many investors. So we can say
that Coca-Cola Companys assets are so valuable, make a lot of money, thus the
market values them far more than what they are stated as being worth from an
accounting standpoint.
The difference between market value and book value can depend on various
factors such as the companys industry, the nature of a companys assets and
liabilities, and the companys specific attributes.
Further explanation about how book value and market value matters for either
stockholders, shareholders, and company will be explain later in this paper.

IS COCA-COLA A HEALTHY FIRM?

The Coca-Cola Company is the worlds largest beverage company. They
believe that success depends on ability to connect with consumers by providing them
with a wide variety of options to meet their desires, needs and lifestyles. Therefore,
success further depends on the ability of our people to execute effectively, every day.
The goal is to use Companys assets our brands, financial strength, unrivaled
distribution system, global reach, and the talent and strong commitment of our
management and associates to become more competitive and to accelerate growth
in a manner that creates value for our shareowners.
To know whether a firm is in a good condition (the solvency,
liquidity, profitability, and etc.) or not, we must conduct a financial
ratios that will help us to analyze deeply about the actual conditions
of the firm. And we can use that to compare and investigate the
relationship between different pieces of financial information.
Financial

ratios

are

traditionally

grouped

into

the

following

categories:
a.
b.
c.
d.
e.

Liquidity ratios
Financial leverage ratios
Asset management ratios
Profitability ratios
Market value ratios

Next is the summary of some of the ratios that actually can reflected if a company is
healthy or not.

Quick Ratio
Current Asset
Inventory
Current Liabilities
Cash Ratio
Cash
Current Liabilities
Current Ratio
Current Asset
Current Liabilities
Debt-equity Ratio
Total Asset Total

2014
0,923
times

2015
1,132
times

I/D
Increase

0,277
times

0,271
times

Decrease

1,019
times

1,240
times

Increase

0,668
times

0,714
times

Increase

Equity
Total Asset
Days Sales
Outstanding
Account
Receivables
Net Income
x (365 days)
Days Payable
Outstanding
Inventory
COGS
x (365 days)
Cash Conversion
Cycle
(DSI+DSO-DPO)
Receivable
Turnover (RT)
Sales
Account
Receivables
Days' Sales In
Receivable
365 days
RT
Inventory
Turnover (IT)
COGS
Inventory
Days' Sales
Inventory
365 days
IT
Fixed Assets
Turnover
Sales
Net Fixed Asset
Profit Margin
Net Income
Sales
ROE
Total Equity
Sales
ROA
Total Asset
Sales

229
days

195
Days

Decrease

188
Days

202
days

Increase

104
days

54
Days

Decrease

10,300
times

11,239
times

Increase

36
days

33
days

Decrease

5,771
times

6,024
times

Increase

63
days

61
days

Decrease

0,779
times

0,781
times

Increase

15,48%

16,63%

Increase

23,31%

28,59%

Increase

7,74%

8,17%

Increase

First, in liquidity ratio, it tells us that Coca Cola Company has ability to pay

any of its bills over the short run without undue stress. Example is by looking at the
current ratio, Coca Cola have more than 1, which is the ideal for any healthy firm.
Second, in financial leverage ratio, tells us that Coca Cola Company can
control its long-term liability to meet its obligations. Example by looking at debtequity ratio that increase, means that Coca Cola earns return above its
capital, and its assets is bigger than its debts.
Third, turnover ratio, tells us that Coca Cola Company
efficiently uses its assets to generate sales. Example by looking at
the days sales outstanding, that decreasing, means that takes Coca
Cola Company only a fewer days to collect its account receivables.
Fourth, profitability ratio, tells us that Coca Cola Company
efficiently use its assets and manages its operations. Examples by
looking at profit margin that has increased from last year, means
that the cents Coca Cola generates in profit for every dollar in sales
is increasing.
Therefore, with the information available above, we can make a conclusion
that Coca Cola Company is a healthy firm.

PAST, PRESENT, AND FUTURE ANALYSIS

Going publicly traded on 1919, Ernest Woodruff bought the company for $25
million which now tits market capitalization is more than $180 million! From 1919,
the company was expanded rapidly. By 1950, Coca Cola was sold over 100 countries.
Not always went smooth on its business journey, the use of cocaine which was legal at
that time, was protested by many countries, Saudi Arabia is one of them, so they have
to pull their products back. But, the companys hardwork attract billionaire investor,
Warren Buffet to invest in the company and hold for 9.3% of the company.
Here are some awards and ranking that achieved by Coca Cola Company last
year:
AWARDS

2014 U.N. Womens Empowerment Principles Leadership Award

2014 Award for Corporate Excellence (Secretary of State)

2014 Industry Champion of the Year Award (Sustainable Bio Award)

2014 Best Global Initiative for Womens Economic Empowerment (5by20 program)
RANKINGS

CoreBrand: Americas Most Respected Brands - #1

FORTUNE: Worlds 50 Most Admired Companies - #6

FORTUNE: Worlds Best Multinational Workplaces (Great Place to Work) - One of

25

Interbrand: Best Global Brand - #3

Harris Reputation Poll: #2

DiversityInc: Top 50 Companies for Diversity - #33

Universum Global: Worlds Most Attractive Employers - #23

Forbes: Worlds Most Valuable Brands - #4

Forbes/Reputation Institute: Americas Most Reputable Companies - #11

Forbes: Americas 25 Most Inspiring Companies - #15

Barron: Worlds Most Respected Companies - #28

Corporate Responsibility Magazine: 100 Best Corporate Citizens - #9

Newsweek: Green Rankings - #147 (US) & #229 (World)

For the present analysis, we can just looking back at the ratios done before. It
represents about the actual Company condition. Therefore, we can make further
analysis and interpretation given that available information. If we look back at the
ratio, Coca Cola Company is a very big company and has many subsidiaries and of
course a worldwide company. Thus, many factors over market around the world can
give such big impact for the company. Such as the shocking news that booming lately
about the Brexit, which is British Exit. Its about British leaving the Europe. This
event gave affect in many aspects over the world, including the market. It also create a
volatily of foreign currencies. If we looking deeply in the financial reports of Coca
Cola Company, there is a decreasing of revenue growth of the company in 2015.
Maybe its because of the many events occurred in 2015 and before. But, still Coca
Cola Company is growing rapidly over the year.
For the future analysis, there are five major plans that the Coca Cola
Company has stated to be its focus for the coming years:
-

Maintaining its long-term high single-digit EPS growth target while adjusting
its net revenue target to mid-single-digit growth and replacing its operating
income metric with profit before tax (All long-term growth targets are on a

comparable currency neutral basis)

Streamlining and simplifying its operating model to drive the speed and agility

of the organization and provide line of sight to aligned compensation targets

Expanding productivity initiatives with $3 billion in expected annualized

savings by 2019
Refocusing on its core business model of building the worlds greatest
beverage brands and leading an unmatched global system of strong local
bottling partners

If Coca Cola Company can maintain this program, Coca Cola will likely to
thrive in previous years even it hard.