| Coca- Cola Company financial Statement Analysis |
Company Overview
The Coca- Cola Company is the main manager and advertiser of nonalcoholic drink brands. Coca- Cola either possesses or licenses 500 of the world’s nonalcoholic drink brands. Coca- Cola is perceived as the world’s most significant brand. There are roughly 54 billion refreshments of different varieties served around the world, of the 54 billion Coca-Cola represents pretty nearly 1.6 billion of those drinks. Coca-Cola offers syrups, concentrates, and soft drinks to packaging organizations and retailers. Coca-Cola takes after the bookkeeping standards that are for the most part acknowledged in the United States (GAAP). At the point when deciding, the organization officials dependably consider the effect on stakeholders of the organization and are mindful so as to carry on morally and take after the strategies of Coca-Cola. The organization just records income when collectability is guaranteed and conveyance of all items has happened. The organization endeavors to be exceptionally sensible when recording data that is not situated in stone. Additionally, Coca- Cola considers potential business sector hazards on their money related proclamations with a specific end goal to all the more precisely show the condition of their organization.
We have an exceptionally positive impression of this organization. It appears to us that it is extremely beneficial, exceptionally predominant, and holds a lot of business sector power. What makes Coca-Cola extremely novel is their image name which is about inconceivable for different organizations to try and endeavor to contend with. Amid the year of 2013, Coca-Cola presented Minute Maid Pulpy Super Milky in China, propelled a refreshment named Frestea Green to target dynamic and sound people in Indonesia, presented Burn Energy Shots in Europe and supported a few universal occasions (Wahlen, Baginski & Bradshaw, 2010). Additionally, Coca-Cola turned into the first organization in the drink business to focus on unveiling the majority of their refreshment vitality data (calories, kilocalories, and so forth) on the greater part of their bundling. It is apparent that Coca-Cola is exceptionally centered on the needs of its customers and is continually taking a shot at creating items that would profit their clients. Coca- Cola adjusts its items to the area to which it expects to market them. Case in point, in Japan there is a huge national enthusiasm toward reusing, thusly Coca-Cola looked into this and made a jug that is light and ready to be compacted so it takes up almost no space when reused. It is this tend to its clients and moral budgetary conduct that guarantees Coca- Cola’s yearly achievement and gainfulness. Later on, Coca-Cola will dependably be a standout amongst the most predominant organizations in America and additionally in different nations, paying little heed to the condition of the economy.
Price Earnings Ratio = Current Stock Price per Share / Earnings per Share
| Stock Price – | 12/31/11 | $160 | |
| 12/31/12 | $121 | ||
| 12/31/13 | $158 | ||
| Earnings per Share – | 2011 | $2.59 | |
| 2012 | $2.51 | ||
| 2013 | $2.95 | ||
| Coca-Cola Price Earnings Ratio each year – | 2011 | $160 | / | 2.59 | = | |
| $61.78 | 2012 | $121 | / | 2.51 | = | |
| $48.21 | ||||||
| 2013 | $158 | / | 2.95 | = | ||
| $52.56 | ||||||
In 2011, the Coca-Cola Company had a colossally high Price Earnings Ratio of $61.78, implying that speculators were hopeful about the future prospects of the organization. Notwithstanding, in 2012, the Price Earnings Ratio fell intensely down to $48.21, implying that financial specialists were starting to scrutinize the future prospects of the organization. Once 2013 came around, the degree rose to $53.56, demonstrating that the organization is starting to skip back and is indicating to a greater extent a guaranteeing future. Through the years, the Coca-Cola Company has relentlessly become in stock cost. Over the recent years, actually when they were experiencing issues in 2012, they demonstrated that they were still ready to surpass their rival more every year.
Income Statement and Profitability
| Horizontal Analysis on Sales | 2013 | 2012 | |||
| Net Operating Revenues (In Millions) | |||||
| $31,944 | $30,990 | ||||
| Dollar Change in Account Balance: | => | $30,990 – $31,944 = | |||
| Current Year Balance − Prior Year Balance | |||||
| $(1,004) | |||||
| Percentage Change in Account Balance: | => | $(1,004) ÷ $31,944 = − | |||
| Dollar Change ÷ Prior Year Balance | |||||
| 3.1% | |||||
| Horizontal Analysis on Net Income | 2013 | 2012 | |||
| Consolidated Net Income (In Millions) | |||||
| $6,906 | $5,807 | ||||
| Dollar Change in Account Balance: | => | $6,906 – $5,807 = | |||
| Current Year Balance − Prior Year Balance | |||||
| $1,099 | |||||
| Percentage Change in Account Balance: | => | $1,099 ÷ $5,807 = | |||
| Dollar Change ÷ Prior Year Balance | |||||
| 18.9% | |||||
As should be obvious from this investigation, there was a pretty nearly 1 million dollar increment in the Net Income of this organization. This is a 18.9% change from the prior year and is a guaranteeing sign for the organization. Net Revenues, on the other hand, diminished by pretty nearly 3% since 2012. Despite the fact that, Coca-Cola is procuring less cash every year as per the investigation on Sales, they found themselves able to diminish their costs for the year (counting expense of merchandise sold) and enormously affect their net pay for 2013 keeping in mind the end goal to build their income.
The Coca-Cola Company and Subsidiaries
| Consolidated Statements of Income | ||
| Year Ended December 31, 2013 | Current Year 2013 | |
| (In millions except per share data) | ||
| NET OPERATING REVENUES | $ | 30,990 |
| Cost of Goods Sold | $ | 11,088 |
| GROSS PROFIT | $ | 19,902 |
| Selling, general, and administrative expenses | $ | 11,358 |
| Other operating charges | $ | 313 |
| OPERATING INCOME | $ | 8,231 |
| Interest income | $ | 249 |
| Interest expense | $ | 355 |
| Equity income (loss) – net | $ | 781 |
| Other income (loss) – net | $ | 40 |
| INCOME BEFORE INCOME TAXES | $ | 8,946 |
| Income taxes | $ | 2,040 |
| CONSOLIDATED NET INCOME | $ | 6,906 |
| Less: Net income attributable to noncontrolling interests | $ | 82 |
| NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE | ||
| COCA- COLA COMPANY | $ | 6,824 |
| BASIC NET INCOME PER SHARE | $ | 2.95 |
| DILUTED NET INCOME PER SHARE | $ | 2.93 |
| AVERAGE SHARES OUTSTANDING | 2,314 | |
| Effect of dilutive securities | 15 |
| AVERAGE SHARES OUTSTANDING ASSUMING DILUTION | 2,329 |
The Coca-Cola Company and Subsidiaries
| Consolidated Statements of Income | ||
| Year Ended December 31, 2012 | Current Year 2012 | |
| (In millions except per share data) | ||
| NET OPERATING REVENUES | $ | 31,944 |
| Cost of Goods Sold | $ | 11,374 |
| GROSS PROFIT | $ | 20,570 |
| Selling, general, and administrative expenses | $ | 11,774 |
| Other operating charges | $ | 350 |
| OPERATING INCOME | $ | 8,446 |
| Interest income | $ | 333 |
| Interest expense | $ | 438 |
| Equity income (loss) – net | $ | (874) |
| Other income (loss) – net | $ | 39 |
| INCOME BEFORE INCOME TAXES | $ | 7,506 |
| Income taxes | $ | 1,632 |
| CONSOLIDATED NET INCOME | $ | 5,874 |
| Less: Net income attributable to noncontrolling interests | $ | 67 |
| NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF | ||
| THE COCA-COLA COMPANY | $ | 5,807 |
| BASIC NET INCOME PER SHARE | $ | 2.51 |
| DILUTED NET INCOME PER SHARE | $ | 2.49 |
| AVERAGE SHARES OUTSTANDING | 2,315 | |
| Effect of dilutive securities | 21 | |
| AVERAGE SHARES OUTSTANDING ASSUMING DILUTION | 2,336 | |
Despite the fact that Sales in 2013 were short of what they were in 2012, the Net Income in 2013 was more than it was in 2012.
Purposes behind change in Sales:
The reduction in deals in 2013 since 2012 may be credited to the way that individuals are still just ready to use just a small amount of what they could have used previously. Despite the fact that the economy has been showing improvement over it has in the previous years, costs for specific things are as of now expanding (ex: Higher Education, Health Insurance, and so forth.) and the populace is far less capable and ready to make buys that are a bit much.
Likewise, increments in wellbeing mindfulness with respect to soda pops, sugar, and so on may have additionally brought about individuals being more reluctant to buy Coca-Cola items because of dread of wellbeing dangers and heftiness. This causes an abatement popular and along these lines a diminishing in deals.
Explanations behind change in Net Income:
Certain components influencing net wage were high expenses for sugar and aluminum, awful obligation, and a general powerless US economy. Luckily, in the late years there has been proof that the economy is header’s to recuperation, subsequently why the Net Income in 2013 may have been higher than the Net Income in 2012. Gradually, the economy is working all the more for the sustenance and drink industry which is the reason Net Income is by all accounts expanding at Coca-Cola and in addition organizations, for example, Sara Lee, General Mills, Tyson Foods, and Pepsi Co.
Variance of remote coin trade rates can influence Sales and Net Income
Gross Margin Ratio (Percentage of Selling Price that is a Profit) IN MILLIONS
2013
(1 – ($11,088 ÷ $30,990)) X 100% = 64.2%
2012
(1 – ($11,374 ÷ $31,944)) X 100% = 64.4%
2011
(1 – ($10,406 ÷ $28,857)) X 100% = 63.9%
Profit Margin Ratio (Net Income/Net Sales) IN MILLIONS
2013
$6,906 ÷ $30,990 = 22.3%
2012 $5,874 ÷ $31,944 = 18.4%
2011
$6,027 ÷ $28,857 = 20.9%
The overall revenue proportions are showing that the organization was getting more benefit from deals in 2013 than in 2012 and got less benefit in 2012 than in 2011.the terrible edge degree is demonstrating that the rate of aggregate income that the organization holds. This has marginally diminished from 2012 to 2013 yet the change is extremely insignificant and probably does not have much to do with the operation of the organization. It expanded marginally somewhere around 2011 and 2012. The progressions in terrible edge are little.
A reduction in terrible edge proportion may be brought about by an increment in the expense of merchandise sold. The more lavish it is to deliver a thing, the less benefit the organization will hold. An increment in expense of products sold may be identified with shortage of assets and expansion. An increment in the terrible edge degree is undoubtedly because of a lessening in the expense of products sold. Additionally, an abatement or increment in income might likewise influence this proportion. Net revenue degree may be influenced by a few components. An expand may be an aftereffect of an increment in net pay from net deals or a reduction in net deals contrasted with the net wage (Selvi, Wagner & Türel, 2010). The inverse is valid for a reduction.
| Total Assets: | |||||||||
| 2014 | 2013 | 2012 | 2011 | 2010 | |||||
| $48,671 | $40,5 | $43,26 | $29,96 | $29,427 | |||||
| 19 | 9 | 3 | |||||||
| Horizontal Analysis: | Dollar Change from 2012- | ||||||||
| Dollar Change from 2013-14 | |||||||||
| 2013 | |||||||||
| 48,671 – $40,519 = $8,152 | $40,519 – $43,269 = | ||||||||
| ($2,750) | |||||||||
| Dollar Change from 2013-06 | Dollar Change from 2012- | ||||||||
| 05 | |||||||||
| $43,269 – $29,963 = $13,306 | $29,963 – $29,427 = $536 | ||||||||
| Percentage Change from | Percentage Change of | ||||||||
| 2013-08 | 2008-07 | ||||||||
| $8,152 ÷ $40,519 = 20.1% | ($2,750) ÷ $43,269 = | ||||||||
| (6.4)% | |||||||||
| Percentage Change from | Percentage Change of | ||||||||
| 2012-13 | 2012-13 | ||||||||
| $13,306 ÷ $29,963 = 44.4% | $536 ÷ $29,427 = 1.8% | ||||||||
The aggregate assets of the Coca-Cola Company in 2010 were $29,427 and expanded by a couple of hundred dollars that one year from now in 2012. In 2013, the organization’s aggregate expanded significantly up to $43,269 yet dropped somewhat in 2008 to $40,519. The purpose behind this lessening altogether asset could have been because of the significant Recession that happened amid that time. By the following year in 2013, nonetheless, Coca-Cola had the capacity to get again on its feet and build its advantages considerably more than they had before as they finished the year with $48,671. Coca-Cola has dependably been an enormous name in the refreshment business and has ended up greater than at any other time in recent memory over the recent years.
References
Selvi, Y., Wagner, E., & Türel, A. (2010). Corporate social responsibility in the time of financial crisis: evidence from Turkey. Annales Universitatis Apulensis Series Oeconomica, 12(1), 281-290.
Wahlen, J., Baginski, S., & Bradshaw, M. (2010). Financial reporting, financial statement analysis, and valuation: A strategic perspective. Cengage Learning.
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