Financial Analysis of Coca Cola Company

Financial Analysis of Coca Cola Company

Introduction

Coca Cola Company is one of the leading beverage industries, globally. The world's biggest beverage company, Coca-Cola Company and its bottling partners helps refresh consumers enjoy more than 500 brands and 3,500 beverage products. Coca-Cola Company is one of the world's most well reputed companies. The company's portfolio offers a number of brands such as fruit juices, soft drinks and many other beverages such as Diet Coke, Sprite, Coca-Cola Zero, Fanta, Powerade and Minute Maid, features $15 billion brands including Consumers in more than 200 countries. The consumption of the Coca Cola Company's beverages is greater than 1.7 billion servings per day. Further discussed is the financial performance of the Coca Cola Company.

Discussion

Financial Analysis

According to their financial performance, as shown in the income statement, from 2008 to 2010, the net income was substantially increasing while, in 2011, the net income dropped down to $8,572. The balance sheet shows increment in assets from $40,519 to $79,974 and though long term debt has increased up to $13,656. Even the cash flow of Coca Cola Company is positive that means cash inflow is greater than outflow. Being in a cash surplus is preferable (assets.cocacolacompany.com).

Ratio Analysis

This will further help in gauging the financial performance of Coca Cola Company. Current ratio shows the availability of cash in the business. It indicates a company's current liabilities with its current asset (Pamela Peterson Drake). The current ratio has improved of Coca Cola Company from 1.05 (2011) to 11.11 (2012). It means Coca Cola Company is using more of its current asset than current liabilities, making it financially better off. Even the quick or acid test ratio has increased from 0.92 to 0.99 in 2012. Improvement means it can use to repay current liabilities with quickly converted cash. Debt ratio has also increased to 0.615 in 2012 from 0.6 in 2011. This substantial increase means that the percentage of Coca cola Company's assets, provided with debt, is not by large amounts. It is more likely for the Coca Cola Company to raise capital from equity rather than debt. Debt equity ratio further tells the financial leverage of the Company. It has increased from 1.5 in 2011 to 1.59 in 2012. A high debt equity ratio means that the company is aggressive in financing for its growth in business through raising debt; however, Coca Cola Company is not highly leveraged company (assets.cocacolacompany.com). The greater the leverage, higher the risk business has to face. Coca Cola Company has a reliable debt equity ratio maintain the capital structure best suited for the company.

Debt securities of Coca Cola Company

There are different types of debt securities that a corporation can issue. This is done in order to raise capital. The balance sheet of Coca Cola Company shows long term and short term debt securities. These debt securities are mentioned as loans and notes payable. These short term debt securities have allegedly increased from $12,871,000 in 2011 to $16,297,000 in ...