3/29/15
Week 1 Cocoa-Cola Analysis

1. My “eye-ball” assessment of Coke’s changes over the period from 1996 to 2010 is that they improved their finances in many ways indicating overall growth. Their revenue doubled along with their gross profit while at the same time their retained earnings tripled. They also paid out more dividends. The balance sheet indicates that Coke has added long term assets and some long term debt. They have a capital surplus which did not exist in 1996 and five times the amount of shareholder’s equity indicating they leveraged some of their investments with not just long term debt but shareholder’s equity also. 2. From looking at Coke’s financial statements we can see the growth that they experienced in the 14 years between statements. Their revenue went from $18,546 to $35,119 during this time period. Coke added new products during this time which had success and would add to their increase in revenue. They introduced the fridge pack, vanilla coke, cocoa-cola zero and simply orange. Their current and long term assets increased which would be due to the acquisitions and mergers that Coke had. During this time period Coke took over Schweppes, Energy Brands, Odwala and created a new beverage company with Nestle. This added to their inventory and property, plant and equipment. These events also added to their long term debt and possibly their treasury stock if they used a mix of loans and stock sales to finance the purchases. In 1996 we can see that Coke’s current liabilities made up 74% of total liabilities where in 2010 they only make up 44% therefore their long term liabilities in 2010 make up the majority of the total. 3. A. Coke was more liquid in 2010 as evidenced by their current ratio of 1.17 and their quick ratio of 1.02. They are in a much better position in 2010 by which these ratios indicate they have