Financial Analysis of Coca Cola: Background, Mission, Core Competencies, Factors Affecting Performance, Ratio Analysis, Share Valuation

Business finance

TABLE OF CONTENTS
Introduction................................................................................................................................3
Financial analysis of Coca Cola.................................................................................................3
Background of the company..................................................................................................3
Mission...............................................................................................................................3
Customer analysis in the Marketing strategy of Coca-Cola...............................................3
Core competencies of the company...................................................................................4
Factors affecting the performance of the company............................................................5
Ratio Analysis........................................................................................................................5
Valuation of the shares of coca cola Amatil..........................................................................7
Share valuation.......................................................................................................................9
Conclusion..................................................................................................................................9
Recommendations......................................................................................................................9
References................................................................................................................................11
Appendices...............................................................................................................................12
Financial ratios.....................................................................................................................12

INTRODUCTION
The present study is based on an evaluation of the financial performance of Coca-Cola.
Initially, the background of the company is assessed by considering their market, competitive
strategies and core competencies. Further, it is followed by computing and interpretation of
financial ratios to assess their financial position. Last part of the study analysis share price
fluctuations of the company over the years with a graphical presentation for better
understanding.
FINANCIAL ANALYSIS OF COCA COLA
Background of the company
Coca-Cola Company is functioning as a foremost soft drink maker and operating in more
than 200 states worldwide. Company advertise and sales several sparkling and still drinks,
and it’s 60% profits and concerning 80% of its functioning income is produced from outside
the United States (Coca-Cola Amatil Limited Annual Report, 2017). The brand is strongly
recognized throughout the world. As per the indoors business observers, around 94% of the
world population is familiar and known about its logo which is presented in the white and red
colour of Coca-Cola.
Mission
Their business proceedings begin with their desired objective which is to provide the standard
products while considering their performance aligned with the choices of customers.
Customer analysis in the Marketing strategy of Coca-Cola
The policy of the company is focused on targeting the mass market. Clients are considering
various factors while moving towards the products for example; low cost of the product, great
flavour, expediency & convenience and diverse alternative to select from (Sinha and Sheth,
2018).
The company is operating in the non-alcoholic beverages market. In this industry, it is always
seen that it is an ever-growing business with the higher amount of opportunities. Moreover
with the start of rising Asian markets & developing nations the utilization will be higher due
to the changing lifestyle and shifts in the choices of the clientele, financial conditions and
varying habits of purchasing (Coca-Cola Amatil Limited Annual Report, 2017). Moreover, in
such business clients have various choices for example from water, tea, coffee and soft

drinks; consequently, there are huge chances for customers to move towards the different
brands and products. Therefore, simple methods to differentiate the brand and retain the
consumers is to build a strong brand image and generate force for the product in the
marketplace.
Core competencies of the company
The Coca-Cola Company is always known as the originator of refreshing drink brands.
Nowadays, our generous collection contains more than 500 brands, for example, sparkling
beverages, fruit drinks and squash drinks, water coffee, tea, energy and enhanced hydration
drinks and sports drinks and so on (Gardner, McGowan and Susan, 2012). Value-added dairy
between such products is 20 that produce more than a billion dollars in yearly retail sales.
An additional core competency is their capability to direct the world’s most complicated
structure of independent bottling associated with producing worth for their retail and
restaurant clientele (Five Strategic Actions, 2015). From many years company has obtained
and directed several Coca-Cola bottling associates, with the objective of getting better
performance, optimizing manufacturing and sharing structure, and eventually refranchising
the bottling countries back to autonomous position.
In terms of functioning, brand portfolio, cost management, Collaborative customer
relationship and, concerted customer association, Coca-Cola has a better competitive edge
more than its competitor.
Operations
In terms of functioning Coca-cola Company has outsourced the bottling process to the
franchise, FEMSA which is the biggest Bottling franchisee of the Coca-Cola brand beverage
in the whole world (Dekhil, Jridi and Farhat, 2017). It assists the corporation in measuring
significant development opportunity in an immature, non-carbonated drink section and in
planned attainment by incoming into agreements to equally obtain corporation with The
Coca-Cola Company.
Cost control
Characteristics of a company such as expanded product portfolio, Outsourcing process
& economies of scale assist them in lowering down their functioning cost & amplify
its productivity.