Ratio Analysis of Coca Cola Amatil: Financial Performance and Position

Accounting for Business

Executive Summary
Ratio analysis is a tool that is used to analyse the financial statements in great depth. It helps
us to know about the financial performance and financial position of the company. There are
different categories of ratio that helps us to know the profitability, efficiency as well as
solvency. In this report, a ratio analysis of coca cola amatil has been done which gives us the
true picture of the company’s performance and position. Also there has been a comparison
made between the two company’s inventory turnover ratios. All the ratios have their
individual importance which has been explained in this report.
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Contents
Executive Summary...............................................................................................................................2
1.0 Introduction.....................................................................................................................................4
1.1 Purpose........................................................................................................................................4
1.2 Scope...........................................................................................................................................4
1.3 Limitations...................................................................................................................................4
2.0 Company Overview..........................................................................................................................5
3.0 RATIO ANALYSIS...............................................................................................................................6
3.1 Current ratio................................................................................................................................6
3.2 Quick ratio..................................................................................................................................6
3.3 Gross profit margin......................................................................................................................7
3.4 Return on equity..........................................................................................................................8
3.5 Return on sales............................................................................................................................8
4.0 Analysis and Comparison using the Inventory Ratio........................................................................9
Bibliography.........................................................................................................................................11
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1.0 Introduction
1.1 Purpose
The purpose of the following report is to have an insight in the financial performance of the
company Coca Cola Amatil. The following report contains an analysis on the financial data,
which will help us understand the viability of the company. The following will also help us
understand how ratio analysis works and how it can practically be implemented in the real
world. (Atkinson, 2012)
1.2 Scope
The following report include implantation of various ratios and there definition. The same has
been done in relation to the company- Coca Cola Amatil. References to various books based
on ratio analysis and the annual report of the company has been made for this. (Berry, 2009)
1.3 Limitations
Since the ratio analysis of the company has been done based on past data, it does not mean
that the same level of performance can be expected in the coming years. The ratio analysis
tool fails to incorporate qualitative data that are mentions in the notes and which may affect
the affect of the decision maker. Therefore, the results of the report are to be read keeping in
mind these limitations.
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