Financial Performance Analysis of Coca-Cola Amatil Limited (2017)

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BUSINESS REPORT

Table of Contents
Introduction......................................................................................................................................3
Findings and analysis.......................................................................................................................3
a. Company background..................................................................................................................3
1. Liquidity ratio..............................................................................................................................5
2. Asset management efficiency......................................................................................................6
3. Capital structure...........................................................................................................................6
4. Profitability ratios........................................................................................................................6
5. Market value................................................................................................................................6
6. Cash flow management................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
Appendix..........................................................................................................................................9

Introduction
Financial information presented in the annual report of a company defines the strength, weakness
and current position in the market. Moreover, it also defines the performance growth of the
company by comparing information with their previous year’s data. Therefore, in the following
study financial performance and position of the company Coca Cola Amatil Limited will be
identifies anddiscussed. Apart from this their detailed information regardinginvestments, Board
of Directors, top five investors and others will also be identified and discussed. Moreover, the
study will generate in-depth idea regarding the business structure of the company Coca Cola
Amatil Limited over the period of 2017.
Findings and analysis
a. Company background
Coca Cola Amatil Limited is one of largest non-alcoholic drink bottlers operating in the Asia-
Pacific region. Apart from this CCA is also considered as worlds five bottlers of Coca-Cola. The
company presently operates their business in six different countries such as New Zealand, Papua
New Guinea, Australia, Fiji, Indonesia and Samoa. The company has diverse range of products
starting from soft drinks, coffee, packaged drinking water, energy dinks, flavored milk, fruit
juice and others. Coca Cola Amatil Limited was founded in the year of 1904 British tobacco
Company in Australia (Rein et al. 2017). It further started expanding its behind in the year of
1982 and in the year of 1989 company sold is majority of stakes to the Coca Cola Company
which is around 29% of the overall ownership. The company presently holds about 14,000
employees and have access to around 270 million customers. In the year of 2017 the company
has earned a revenue of $ 4,933.8 million and a net profit of $ 416.2 million.
b. Details about the Board of Directors
Name Gende
r
Ag
e
Education Career history Position Remunerati
on
Ilana
Atlas
Femal
e
 Bachelor
of
Jurisprude
 Practicedlaw
for 22 years
 the Managing
Partner of
Chairman
and
Independe
nt Non-

nce
 Bachelor
of Laws
 Masters of
Laws
Mallesons
Stephen
Jaques
 Senior
executive in n
Westpac
Banking
Corporation
executive
director
Alison
Watkins
Femal
e
 Bachelor
of
Commerc
e
 Fellow,
Australian
Institute of
Company
Directors
 Fellow,
Chartered
Accountan
ts
Australia
and New
Zealand
 Senior
Fellow,
Financial
Services
Institute of
Australasi
a
 Joined CCA
in 2014
 Holds
extensive
experience in
different
related
industries
 Managing
Director of
GrainCorp
Limited
 Partner at
McKinsey &
Company
Group
Managing
Director
and
Executive
director

John
Borghett
i
Male
Catherin
e
Brenner
Femal
e
Julie
Coates
Femal
e
Martin
Jansen
Male
c. Characteristics of the Board
d. Investment decision
e. Recommendation
f. Audit details
g. Key measured taken by Coca Cola Amatil Limited
h. Top five investors of Coca Cola Amatil
i. Financial statement analysis
1. Liquidity ratio
Liquidity ratio reflects the overall business position based on the value of assets over liabilities, it
further helps in determining the ability of the company to mitigate their short term obligation
with the availability of current assets. Hence, based on the calculation of current ratio it has been
found that the company CCA has been effective in maintaining their asset value of the period of
2017 and 2016. It has rather being found that CAA has current ratio which values to be 1.5 in
2017 and 1.7 in 2016. The shift of value reflects that the company has increased their percentage
of liabilities over assets buy gathering some of short term loans or credits (Ashraf and Khawaja,
2016). However, it is effective for the company as well as the investors as the value of current
ratio is more than the limit of 1 which reflects that the company has the ability to mitigate their

short term obligations by the use of their current assets. On the other hand, quick ratio reflects
the strength of the company in mitigating their uncertainty over business after the deduction of
inventories. Therefore, based on the calculation of quick ratio it has been found that quick ratio is
1.2 and 1.3 which is at normal position.
2. Asset management efficiency
Asset management efficiency ratios reflect the efficiency of the company to manage their assets
in order to increase the performance and position of the company. Based on the calculation of the
inventory turnover ratio of CCA it has been found that the company has decreased their turnover
from 4.6 to 4.2 over the period of 2017. This reflects that the company has limited their use of
inventories over the period. On the other hand, asset turnover reflects to be almost similar. This
indicates that the company has increased turnover of using inventories in order to increase their
sales.
In a venture the board setting, operational effectiveness is approximately characterized as your
capacity to process interests in as ideal a way as would be prudent, automated should as much as
possible. The center of operational productivity is the innovative framework that supports your
speculation the executives exercises. A lacking IT foundation at last prompts tasks that are
inadequate, best case scenario and a danger to your company's suitability best case scenario.
While evaluating what your key agony focuses are, you have to decide the main driver behind
them. By and large, issues, for example, the powerlessness to seek after development
methodologies, bringing down the level of operational hazard or trouble in containing costs isn't
because of an awful methodology or unfit staff but instead a foundation that essentially can't
bolster the requirements of the business. On the off chance that you attempt and work around
foundation impediments as opposed to tending to them head-on, you are just postponing the
inescapable.
3. Capital structure
Capital structure ratio indicates the debt value of the company over the assets and equity. Based
on the calculation of debt to asset ratio it has been found that the company CCA has increase

their value of the period from 0.6 to 0.7. this rather indicates that the company has increased their
assets over the value of their debts. On the other hand, the debt to equity ratio reflects a similar
growth from 1.8 to 2.2. Therefore, it can be said that the company has been able to increase their
liabilities over the issue of share or equity.
Points of interest and weaknesses of benefit proportions is something imperative to remember
before using these proportions in breaking down an organization. The proportion examination is
one of the critical crucial investigation apparatuses, you can perform to pass judgment on
whether the organization is among the conceivable speculation class. You can do the proportion
investigation of an organization on an independent premise or by contrasting and the business
peers. Among different classifications, we will examine today the upsides and downsides of
productivity proportions. Productivity proportion as one of the classifications has subcategories.
At whatever point you manage gainfulness proportions, you generally consider benefits a level of
something. We should take a portion of the vital proportions of under this classification that
speaks to the whole productivity proportion’s class and examine the advantages and detriments
of the equivalent.
The benefit of utilizing this proportion is that the administration can screen and afterward control
the usage of advantages. For what reason is the use of benefits critical? Proficient and
compelling use of benefits directly affects productivity. With proficient resource usage, an
organization makes a positive influence impact by delivering and selling more units against a
similar devaluation cost in the salary articulation.
Profit for resources passes on how much net benefit is produced by each dollar of interest in
resources. Expanding return on the benefit can essentially imply that administration is utilizing
the advantages and the other way around (Kim and Henderson, 2015).
Profit for capital utilized tells you about the administration execution in putting the funding to its
most effective use. With this measurement, you can pass judgment on the administration
execution crosswise over various organizations in the comparative business. On occasion, the
board remunerations depend on the fulfillment of a set focus of this specific measurement
(Goumas, Charamis and Tabouratzi, 2018). Much more, this measurement can be contrasted and
organizations crosswise over various enterprises. The benefit of using the proportion is that it

makes a decision about the proficiency of the general finances' usage of the organization. It
covers the two sorts of capital, the value just as obligation.
4. Profitability ratios
Profitability ratios indicate the ability of the company to earn profit after the deduction of all the
expenses. On the basis of the calculation of operating margin ratio it has been analyzed that CCA
has experienced a growth in their profits. It has rather being identified that the company has been
able to adjust and minimize their expenses over the operation which is certainly helped the
company to increase their profit percentage (Speak et al. 2018). On the other hand, the net profit
margin has also increased in 2017 to 9% from 5% in 2016. This reflects that the company has
reduced their financial expenses as well as the value of tax over the period (Park, 2018).
Therefore, it can be said that profitability rations can determine the future productivity through
comparing sales and productivity. If a respective firm cannot identify the future possibilities of
rations regarding investment and sales, it will be difficult to make strategies. In that concern, it is
important to manage profitability ratio. However, a company may gain fluctuation in managing
proper portability ratio, but having the same, it will be better to maintain future strategies having
a clear aspect of sustainability (Das and Saha, 2017).
5. Market value
Market value ratios reflect the ability of the company to pay back shares value to their
shareholders based on their earnings. This ratio is considered to be beneficial for investors of the
company in order to analyze their return over investments. Based on the calculation of Earnings
per share (EPS) of CCA it has been found that it has increased to 0.559 from 0.547 over the
period of 2017. Thus, it can be said that the company has been able to provide their shareholders
a basic amount of return over investment (Giesecke, Dixon and Rimmer, 2016).
6. Cash flow management
Cash flow management ratios reflect the availability of cash within the company. Based on the
calculation of Cash Flow Margin Ratio it has been found that CCA has degraded the value from
15% to 12%. This was due to the reason of degrading sales from the period of 2016 to 2017.
Apart from this, it has also been found that cash flow from operating cash flows has also

decreased from 774.8 in 2016 to 589.2 in 2017. On the other hand, it has also been analyzed that
Cash Flow from Operations to Liabilities decreased to 14% from 18% during the period of 2017
and 2016. This was due to decreasing liabilities and Cash Flow from Operations (Asongu and De
Moor, 2017).
Conclusion
Therefore, it can be said that in most of the terms, business owners have to consider financial
status in order to make further strategies. As per above considerations, it is a fact that most of the
ratios of the firm have experienced many variations in terms of changing market and sales
perspectives. On the other hand, the liquidity ratio of the firm has not met enough aspects of
profitability. In that concern, it is important to manage proper cash flow in order to maintain
profitability.

References
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Regulation: A Financial CGE Assessment of the Impact of a Rise in Commercial Bank Capital
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Kim, Y.H. and Henderson, D., 2015. Financial benefits and risks of dependency in triadic supply
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Das, S. and Saha, T.R., 2017. Benefits of Mandatory IFRS Adoption in India: A Study Based on
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Appendix
Liquidity
Current ratio
Particulars 2017 2016
Current assets
2,799.6
0
3,104.8
0
Current
liabilities
1,838.8
0
1,843.1
0
Current ratio 1.5 1.7
Quick ratio
Particulars 2017 2016
Current assets
2,799.6
0
3,104.8
0
Inventories 670.3 676.4
Current
liabilities
1,838.8
0
1,843.1
0
Quick ratio 1.2 1.3
Asset efficiency ratio
Inventory turnover
Particulars 2017 2016
Cost of goods sold 2,799.60 3,104.80
Inventories 670.3 676.4
Average inventories 673.4 676.4
Inventory turnover 4.2 4.6
Asset Turnover Ratio
Particulars 2017 2016