Coca Cola Analysis

A financial analysis of the changes in Coca Cola’s financial statements between FY 96’ and FY 10’ shows profitability overall. Revenues grew by 89%, Total Assets grew by total assets are up from 1996 to 2010 with an increase by 77.8% from $16,161 to $72,921. Gross Profit remained steady at 64% while Net Income rose by 81% which shows that expenses and costs were managed much better.
Current Assets showed a strong increase in cash while the % of receivables on the books were reduced showing a lowering DSO. Inventory was also reduced by 2% or 33% from 1996 showing good management of assets and an improvement in controlling inventory. Long term debt doubled so additional debt was taken on, however this was more than off-set by the improvement in short term liabilities, so by percentage, there was an overall reduction in total liabilities. Shareholder’s equity increased throughout the years from $6,156 to a total of $31,003 in FY 10’; increase of 19%.
Liquidity improved with the large increase in cash, reduction of receivables along with a reduction in current liabilities. The quick ratio was about the same which shows that inventories were closely regulated. Surprisingly the average collection period increased from 32 days to 46 days even though the cash position rose while receivables fell. The large improvements were the inventory turns which increases cash flow as well the fixed asset turnover improvement. With these improvements in turnovers, the cash flows through and resulted in the much improved working capital.
The debt ratio improvement was caused by the reduction of debt and an increase in assets. The same with the debt-to-equity ratio, an increase in equity while having a reduction in debt. Gross profit basically remained constant meaning Sales & COGS remained even through the years. The fact that the Net Profit Margin