Financial Analysis of Coca-Cola Amatil Limited

Accounting

FINANCE 1
Contents
Introduction......................................................................................................................................2
Overview of the company................................................................................................................2
Current Business activities..............................................................................................................3
Company’s Capital Structure...........................................................................................................3
Debt and Equity Instrument.............................................................................................................4
Analysis of past and present dividend policy..................................................................................5
Capital Asset Pricing Model............................................................................................................6
Weighted Average Cost of Capital -100..........................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

FINANCE 2
Introduction
The main aim of this paper is to understand the concept of analyzing or evaluating the
financial position of the company. There are several techniques or methods that have been used
by the organization to evaluate the financial position by analyzing the financial statements such
as WACC method, ratio analysis, CAPM model and the others. It is required for the company to
analyze the financial statements to evaluate the financial position in the market. In this report,
Coca-Cola Amatil has been taken into consideration to examine the financial statement of the
organization. WACC, CAPM modela have been used to analyze the financial position of the
organization.
In the beginning of this report, overview about the company will be discussed. After that,
the discussion is made on the capital structure of the organization. Further the discussion has
been made on debt and equity instrument of thee company. Past and Present dividend policy of
the company will also evaluated. At the end of the report, CAPM (Capital Asset Pricing Model)
and WACC (Weighted Average Cost of Capital) methods are used to assess the financial
situation of the organization.
Overview of the organization
Coca-Cola Amatil Limited is one of the largest bottlers companies that provide the non-
alcoholic ready to drink beverages in the Asia-Pacific region. It is also one of the bottler of Coca-
Cola Amatil into the five major bottlers. It operates in six countries such as Papua New,
Australia, Indonesia, Fiji, New Zealand and Samoa (Coca-Cola Amatil Limited, 2018).
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FINANCE 3
Current Business activities
The company works with the diverse group of operations, across six countries. The
organization has large number of consumers everywhere those provides the non-alcoholic
beverages, coffee and also ready to eat food. The company operates in beverage industry in order
to provide the services in the market. The company operates the business as brand partners and
brand owners across the dynamic mix of market. All the services and designs of bottles are
different or unique from the others (Coca-Cola Amatil Limited, 2018).
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Company’s Capital Structure
By examining the annual report of Coca-Cola Amatil, it has been found that equity plus net
debt is capital of the company. The company evaluates net debt by addition of borrowings and
debt related derivatives less long term deposits, cash assets and other financial liabilities. The
company manages the capital in order to make sure the assessment to funding to maintenance the
organization activities (Coca-Cola Amatil Limited, 2016). It maximizes the returns to
shareholders through the optimization of equity balances and net debt.
As per the analysis of table from the annual report of the company, it is observed that the
amount of capital is increasing from the previous year 2017. It has been found that the amount of
equity is increasing and the amount of net debt is decreasing in 2018 from 2017. The company