Coke Analysis 6
MBA 501 – Foundations
Fall 2017 Term
Professor Alain Gracianette, D. Mgt
Coca-Cola is an extremely well-established brand that has touched the lives of almost everyone in the world in one way or another. Consistency in the retail market is key when it comes to bringing in more investors, more revenue, and therefore hire profits. This paper will analyze the financial performance of the Coca-Cola company in the years 2002 and 2003. Several key ratios will be examined to show trends on the growth or lack of growth of the company. Coca-cola has seen an increase in their overall assets and revenue, yet there has been a distinct decrease in the return on assets and the return on equity. The exhibits and computations included with proper analysis will explain some of the factors behind why despite more cash at their disposal the company has been unable to sufficiently increase their net profit margin and return on assets and equity.
From 2002 to 2003 there have been 2 major changes for the financial side of the Coca-Cola company. The first has been the decrease in the return on equity by 3 percentage points while asset turnover at the same time has gone down as shown in Exhibit 1. Profit margins have increased only slightly year over year which is worrisome considering that cash on hand has increased by 50% as displayed in Exhibit 3. The good news is despite these changes the Coca-Cola company has at seen small growth in overall revenue and in their profit news which is good news for investors. With such a powerful brand image and a continually high amount of revenue this makes the...