Financial and Management Accounting

This report provides a brief summary of Coca-Cola Amatil and outlines the details regarding the board of directors, investment or financing decisions, recommendations of ASX CGC, audit firm and their independence, incorporation with ethics and ethical judgment, top 5 investors, and ratio analysis. The subject code is ACCY801: Accounting and Financial Management.

Running head: FINANCIAL AND MANAGEMENT ACCOUNTING
Subject code and Subject Name: ACCY801: Accounting and Financial Management
Submission Type: Online
Assignment Title: Business Report-Coca Cola Amatil Limited
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1FINANCIAL AND MANAGEMENT ACCOUNTING
Table of Contents
Introduction......................................................................................................................................2
a. Company summary...................................................................................................................2
b. Details of board of directors.....................................................................................................2
c. Characteristics of board............................................................................................................5
d. Investment or financing decision.............................................................................................6
e. Recommendation of ASX CGC...............................................................................................7
f. Audit firm and their independence...........................................................................................7
g. Incorporation with ethics and the ethical judgment.................................................................7
h. Top 5 investors.........................................................................................................................8
i. Ratio analysis...........................................................................................................................8
Conclusion.......................................................................................................................................9
Reference and Bibliography..........................................................................................................10
Appendix........................................................................................................................................12

2FINANCIAL AND MANAGEMENT ACCOUNTING
Introduction
The main objective of the report is to provide brief summary of Coca-Cola Amatil. The
report will further outline the details regarding the board of directors of the entity and the
characteristics of the same. In the next section of the report it will focus on the major financing
or investment decision taken by the entity, if any and the recommendation provided by ASX
CGC. The report will further focus on the audit form of the entity and regarding their
independency. The report will also highlight the major investors of it and will comment on the
financial aspects of the entity through various ratios (Ccamatil.com 2019).
a. Company summary
Coca-Cola Amatil Limited (CCA) that was incorporated on 16th October 1926 and
operates its business in beverage industry. It is engaged in distributing, manufacturing and
selling the ready-to-drink beverages in the region of Asia-Pacific. It is one of the largest bottlers
for non-alcoholic ready to drink beverages in the region of Asia-Pacific. Various segments of the
entity include corporate, food and services, alcohol and coffee beverages, and non-alcoholic
beverages. It manufactures the coca-cola products in 6 countries, where it operates including
Australia, Indonesia, New Zealand, Samoa, Fuji and Papua New Guinea (Ccamatil.com 2019).
The company is ranked at number 83 out of 2000 top entities in Australia. It generates majority
of the income from tobacco and beverage products manufacturing under Australian industry.
During the year 2017 it generated the total revenue amounting to $ 50,24,200,000 including the
sales revenue and other revenues. During the year 2017 it had 13000 employees in Australia
including the employees from all the subsidiaries under the control of the entity. However,
despite of strong financial position and dominance in the market, changing health consciousness
attitude of the people may have serious adverse impact on the company’s business (Soll 2014).
b. Details of board of directors
Name and
position
Gende
r
Ag
e
Education Career history Remunerati
on
Ilana Atlas,
Chairman
Female 62 Bachelor of
Jurisprudence
Extensively experienced
in the business field and
$ 408,371

3FINANCIAL AND MANAGEMENT ACCOUNTING
(Honours) and
Bachelor of Laws
(Honours) and
Masters of Laws
held the executive as
well as non-executive
positions for various
industry sectors,
practiced as a lawyer for
22 years
Alison
Watkins,
Group
Managing
director
Female 53 Bachelor of
Commerce,
Fellow –
Australian Institut
e of Company
Directors, Fellow
– Chartered
Accountants
Australia and New
Zealand and
Senior Fellow –
Financial Services
Institute of
Australia.
She was the managing
director of GrainCorp
Limited, she held the
executive as well as
non-executive roles in
food, retail, beverage
and financial services,
was partner at
McKinsey &
Company at early
days of her career
(Ccamatil.com 2019).
$ 51,12,759
John
Borghetti,
AO – non-
executive
independent
director
Male 61 Not available CEO and managing
director of Virgin
Australia Airline Group
$ 224,087
Catherine
Brenner,
Non-
executive
director
Female 45 Bachelor of Laws
and Bachelor of
Economics and
Master of
Business
Former senior
investment banker for
providing advises to
domestic as well as
international clients
$ 254,388

4FINANCIAL AND MANAGEMENT ACCOUNTING
Administration including acquisitions,
mergers, capital raisings
and privatizations.
Julie Coates,
Non-
executive
director
Female 55 Bachelor of Arts and
Diploma of
Education and the
Advanced
Management
Program
Managing director of
Goodman Fielder
Australia. She was in the
senior role in
Woolworths Limited
and managing director
of Big W (Ccamatil.com
2019).
Not available
Martin
Jansen, Non-
executive
director
Male 58 Bachelor of
commercial
economics and
Graduate of the
Executive
Development
Program
Was region director for
Bottling Investment
group in China, Middle
East and Southeast Asia.
He was responsible for
TCCC’s bottling
investment interest in
Singapore, China, UAE,
Malaysia, Oman,
Vietnam, Qatar, Bahrain
and Cambodia
Not available
Mark
Johnson,
Non-
executive
director
Male 58 Bachelor of
Commerce Fellow
- Chartered
Accountants
Australia and New
Zealand; CPA
Australia; and
Fellow - AICD.
Was the CEO and
Senior partner of PWC
from July 2008 to June
2012
$ 238,607
Paul Male 57 Bachelor of Arts Experienced in holding $ 179,601

5FINANCIAL AND MANAGEMENT ACCOUNTING
O’Sullivan,
Non-
executive
director
(Economics) from
Trinity College,
University of
Dublin and
Graduate of the
Advanced
Management
Program from
Harvard
University
senior executive roles in
SingTel and was CEO of
Optus (Ccamatil.com
2019).
Krishnakumar
Thirumalai,
Non-
executive
director
Male 57 Bachelor of
Engineering from
Electronics and
Communication,
Madras
University, MBA
from Indian
Institute of
Management and
Advanced
Management
Program from
Wharton Business
School.
He is president of Coca-
Cola India and South-West
Asia. He has significant
experience in emerging
and developing markets
for sales, marketing,
supply chain and
distribution. Further, he
has more than 30 years of
experience in FMCG
sector (Ccamatil.com
2019).
$ 214,437
c. Characteristics of board
The board of directors of Coca-Cola Amatil is composed of 8 non-executive directors and
1 executive director who is in the position of Group Managing director, out of which 6 directors
are independent. Chairman of the board is Ilana Atlas. Characteristics of the board members are
as follows –

6FINANCIAL AND MANAGEMENT ACCOUNTING
 Ilana Atlas – She is positioned as chairman of the board and joined the board on 23rd
February 2011. She has extensive experience in the business field and practiced as a
lawyer for 22 years. She was also the managing partner of Mallesons Stephen Jaques
 Alison Watkins – she is the group managing director and was appointed in 2014 March.
She was the managing director of GrainCorp Limited. She was also the partner at
McKinsey & Company at early days of her career (Ccamatil.com 2019).
 John Borghetti – he joined the board during 2015 December. Since 2010 May, he is the
CEO and managing director of Virgin Australia Airline Group. He has experience of
more than 40 years in the field of aviation.
 Catherine Brenner – she joined the board during 2008 April. She is the former senior
investment banker for providing advises to domestic as well as international clients
including acquisitions, mergers, capital raisings and privatizations (Ccamatil.com 2019).
 Julie Coates – she is in the board since 2018 march. Currently she is the Managing
director of Goodman Fielder Australia. She was in the senior role in Woolworths Limited
and managing director of Big W.
 Martin Jansen – he is in the board since 2009 December. He was region director for
Bottling Investment group in China, Middle East and Southeast Asia. He was responsible
for TCCC’s bottling investment interest in Singapore, China, UAE, Malaysia, Oman,
Vietnam, Qatar, Bahrain and Cambodia
 Mark Johnson – he is in the board since 2016 December. He was the CEO and Senior
partner of PWC from July 2008 to June 2012 (Ccamatil.com 2019).
 Paul O’Sullivan - he is in the board since 2017 march. He is experienced in holding
senior executive roles in SingTel and was CEO of Optus.
 Krishnakumar Thirumalai – he joined the board in 2014 March. He is president of Coca-
Cola India and South-West Asia. He has significant experience in emerging and
developing markets for sales, marketing, supply chain and distribution. Further, he has
more than 30 years of experience in FMCG sector (Ccamatil.com 2019).
d. Investment or financing decision
The company is always anticipates and adapts the changes in customer references
through innovation in the product. During the year the entity with its partner Coca-Cola

7FINANCIAL AND MANAGEMENT ACCOUNTING
Company invested $ 40 million in execution, marketing, digital technology, price and equipment
for cold drinks. Further, the entity has made significant amount of investment in Indonesia in
water, dairy, juice and tea categories (Ccamatil.com 2019).
e. Recommendation of ASX CGC
Principle 1 – laying out solid foundation for the management as well as oversight
Principle 2 – structuring the board for adding value
Principle 3 – acting ethically as well as responsible
Principle 4 – safeguarding integrity for corporate reporting
Principle 5 – Making balanced and timely disclosures
Principle 6 – Respecting rights of the security holders
Principle 7 – Recognising as well as managing risks
Principle 8 – Remunerate responsibly and fairly (Asx.com.au 2019.)
f. Audit firm and their independence
Financial statement of the entity for the year ended 2017 has been audited by the Ernst &
Young. As per the declaration of the lead auditor of firm for the financial year closed on 31st
December 2017, there have been –
 No contravention in respect of auditor’s independence requirement as per Corporation
Act 2001 related to audit and
 No contravention with regard to any of the applicable code for professional conduct
related to audit (Kaplan and Atkinson 2015)
g. Incorporation with ethics and the ethical judgment
The entity’s code of conduct articulates its high standards with regard to business
conduct. Further, it is built on the commitment regarding acting fairly, lawfully, morally and
ethically. Standalone group policies of the entity involve ‘human rights’ and ‘anti-bribery and
corruption (Kaplan and Atkinson 2015). The company is committed towards informing the
shareholders and enhancing the accessibility to the shareholders through the announcement of
ASX and company publications including annual reports, media briefings, webcasting analysts

8FINANCIAL AND MANAGEMENT ACCOUNTING
and annual general meeting. These activities confirm that the entity’s business is incorporated
with ethics as well as ethical judgements (Lavia López and Hiebl 2014).
h. Top 5 investors
1. Coca-Cola Holding (overseas) Limited with 30.81% holding
2. HSBC Custody Nominees with 24.40% holdings
3. J P Morgan Nominees Australia Limited with 10.36% holdings
4. Citicorp Nominees Pty Ltd with 9.75% holdings
5. National Nominees Ltd with 2.31% holdings (Ccamatil.com 2019).
i. Ratio analysis
Liquidity ratio – liquidity status represents the ability of the firm with regard to payment of its
short-term obligation when they become due. Most well known liquidity ratios are current ratio
and quick ratio. Current ratio compares the current assets against the current liabilities whereas
the quick ratio being stricter does not account the current assets like inventories those takes quite
some time for converting into cash while measuring the credibility (Williams and Dobelman
2017). Current ratio of the company has been reduced from 1.68 to 1.52 whereas quick ratio has
been reduced from 1.32 to 1.16 over the years from 2016 to 2017. Hence, the company’s
liquidity position has been deteriorated (Ccamatil.com 2019).
Leverage ratio – leverage ratio is used to measure the entity’s debt level. Most used leverage
ratios are debt ratio and debt to equity ratio. Very high leverage ratio indicates that the company
is threatened to long-term sustainability and significant amount will be expensed for meeting the
dents and interests (Dokas, Giokas and Tsamis 2014). Debt ratio of the company has been
increased from 0.65 to 0.69 that indicates that debt portion for acquiring the assets has been
increased over the time period. On the other hand, debt equity ratio of the company has been
increased from 1.85 to 2.22 that indicate that the creditor’s contribution to capital has been
increased as compared to owner’s contribution (Ccamatil.com 2019).
Profitability – profitability ratios are used to measure the profit earning capability of the firm
from its revenue after paying the expenses. Gross profit ratio that measures the rate of profit after
meeting the expenses for COGS has been increased from 37.64% to37.82% from 2016 to 2017

9FINANCIAL AND MANAGEMENT ACCOUNTING
(Ccamatil.com 2019). On the other hand, the net profit ratio that measure the profit margin left
with the firm after making payment for all the expenses have been increased from 5.07% to
9.34%. Hence, the overall profitability position of the entity has been improved (Islam 2014).
Market value ratio – these ratios are used for analysing current share price of the entity’s stock.
These ratios are widely used by the existing as well as potential investors for determining
whether the shares of the entity are underpriced or overpriced (Nimtrakoon 2015). Earning per
share that represents the profit margin allocated to each share has been increased from 32.2 cents
to 59.8 cents. On the other hand, the price earnings ratio that is used for valuing the entity that
measures the current stock price against the EPS has been reduced from 31.43 to 14.23 (Ball,
Grubnic and Birchall 2014).
Cash flow management ratio – operating cash flow ratio measures the short term liquidity of any
firm. The ratio of less than 1 indicates that the entity does not have sufficient cash to meet the
short term liability. For both the years the entity’s operating cash flow is less than 1 and has been
reduced from 0.42 to 0.32 (McLaney and Atrill 2014). On the other hand, cash flow margin ratio
represents the relationship among sales and cash generated from operation. Same for the
company has been reduced from 0.15 to 0.12 over the period under concern. Hence, the overall
cash flow management ratio of the entity is not good (Henderson et al. 2015).
Conclusion
From the above discussion it can be concluded that Coca-Cola Amatil which is carrying
on its business in beverage industry generates majority of its income from tobacco and beverage
products manufacturing under Australian industry. Looking into its financial performance over
the years from 2016 to 2017 it can be identified that the liquidity position of the company has
been deteriorated. Leverage level of the company became high along with deterioration in
market performance. Further, the cash flow from operation for both the years were not sufficient
for meeting the liabilities and cash generated against sales has got worst. Only the positive side
with regard to its financial performance was improvement in profitability ratio. Hence, the
company shall consider lowering its leverage level and improving the liquidity position through
paying off the debt.

10FINANCIAL AND MANAGEMENT ACCOUNTING
Reference and Bibliography
Asx.com.au. 2019. [online] Available at: https://www.asx.com.au/documents/about/appendix-
4g.pdf [Accessed 3 Apr. 2019].
Ball, A., Grubnic, S., and Birchall, J. 2014. 11 Sustainability accounting and accountability in
the public sector. Sustainability accounting and accountability, 176.
Brigham, E. F., Ehrhardt, M. C., Nason, R. R., and Gessaroli, J. 2016. Financial Managment:
Theory And Practice, Canadian Edition. Nelson Education.
Ccamatil.com. 2019. Coca-Cola Amatil – Australia, New Zealand & South Pacific. [online]
Available at: https://www.ccamatil.com/ [Accessed 3 Apr. 2019].
Dokas, I., Giokas, D., and Tsamis, A. 2014. Liquidity efficiency in the Greek listed firms: a
financial ratio based on data envelopment analysis. International Journal of Corporate Finance
and Accounting (IJCFA), 1(1), 40-59.
Henderson, S., Peirson, G., Herbohn, K., and Howieson, B. 2015. Issues in financial accounting.
Pearson Higher Education AU.
Islam, M. A. 2014. An analysis of the financial performance of national bank limited using
financial ratio. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and
Transport, 2(5), 121-129.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Karadag, H. 2015. Financial management challenges in small and medium-sized enterprises: A
strategic management approach. EMAJ: Emerging Markets Journal, 5(1), 26-40.
Lavia López, O., and Hiebl, M. R. 2014. Management accounting in small and medium-sized
enterprises: current knowledge and avenues for further research. Journal of Management
Accounting Research, 27(1), 81-119.
McLaney, E. J., and Atrill, P. 2014. Accounting and finance: an introduction. Pearson.

11FINANCIAL AND MANAGEMENT ACCOUNTING
Nimtrakoon, S., 2015. The relationship between intellectual capital, firms’ market value and
financial performance: Empirical evidence from the ASEAN. Journal of Intellectual
Capital, 16(3), pp.587-618.
Soll, J. 2014. The reckoning: Financial accountability and the rise and fall of nations. Basic
Books (AZ).
Williams, E. E., and Dobelman, J. A. 2017. Financial statement analysis. World Scientific Book
Chapters, 109-169.
Zainudin, E. F., and Hashim, H. A. 2016. Detecting fraudulent financial reporting using financial
ratio. Journal of Financial Reporting and Accounting, 14(2), 266-278.

12FINANCIAL AND MANAGEMENT ACCOUNTING
Appendix
Ratio 2017 2016
Liquidity
Current ratio
Current assets 2799.6 3104.8
current liabilities 1838.8 1843.1
current assets/current liabilities 1.52 1.68
Quick ratio
current assets 2799.6 3104.8
inventory 670.3 676.4
current liabilities 1838.8 1843.1
(current assets-inventory)/current
liability 1.16 1.32
Leverage
Total debt ratio
Total liability 4176.6 4201.1
Total assets 6056.9 6475.3
Total liability/total assets 0.69 0.65
Debt-equity ratio
Total debt 4176.6 4201.1
Total equity 1880.3 2274.2
Total debt/total equity 2.22 1.85
Profitability
Net profit margin
Net profit 461 257.3
Sales 4933.8 5077.7
net profit/sales 9.34% 5.07%
Gross profit ratio
Gross profit 1865.9 1911.1
Sales 4933.8 5077.7
Gross profit/sales
37.82
%
37.64
%
Market value
Earnings per share (cents) - given 59.8 32.2

13FINANCIAL AND MANAGEMENT ACCOUNTING
Price earnings ratio
Market value per share 851 1012
EPS 59.8 32.2
Market value per share/EPS 14.23 31.43
Cash flow management
Operating cash flows ratio
cash flow from operation 589.2 774.8
Current liabilities 1838.8 1843.1
cash flow from operation/Current liabilities 0.32 0.42
Cash flow margin ratio
cash flow from operation 589.2 774.8
Net sales 4933.8 5077.7
cash flow from operation/net sales 0.12 0.15