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Coca-Cola Enterprises, Inc – Written Analysis

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Coca-Cola Enterprises, Inc – Written Analysis (as of 2/1/12)
Overview of Company
Coca-Cola Enterprises, Inc. (CCE) markets, produces and distributes nonalcoholic beverages. The Company serves a market of approximately 165 million consumers throughout Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden. On October 2, 2010, Coca-Cola Enterprises Inc. (Legacy CCE) completed a Merger with The Coca-Cola Company (TCCC) and separated its European operations, Coca-Cola Enterprises (Canada) Bottling Finance Company, and a related portion of its corporate segment into a new legal entity which was renamed Coca-Cola Enterprises, Inc. at the time of the Merger. The Company sold approximately 11 billion bottles and cans (or 560 million physical cases) throughout its territories during the year ended December 31, 2010.
Historical Stock Prices and Beta
CCE’s current shares outstanding is 312 million as of February 1st, 2012, with history of a low price of $2.20 on August 24th and 25th, 1992 and a high price of $29.52 on July 21st and 22nd, 2011. According to adfvn.com, CCE has a beta of 1.26 as of February 1st, 2012.
Ratios Analysis
I. Leverage
a. Long-Term Debt
This analysis is a way to determine a company's leverage. The ratio is calculated by taking the company's long-term debt and dividing it by the sum of its long-term debt and equity. Generally, companies with higher ratios are thought to be more risky because they have more liabilities and less equity. The average of CCE’s long-term debt ratio is 42.26% (40.33% for Q4 – 2010 and 44.19% for Q1 – 2011). According the textbook, the long-term debt ratio for the average U.S. manufacturing company is about 30%. CCE has higher long-term debt ratio then the U.S. firms’ average ratio. The company reflected a 10% increase in debt.
b. Long-Term Debt-Equity
This value computes the

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