Financial Analysis and Cost Accounting of Coca-Cola Presentation

This presentation offers a detailed cost accounting analysis of The Coca-Cola Company, a leading beverage manufacturer. It examines the company's financial performance, including sales trends, cost of sales, and operating income, highlighting effective management strategies. The analysis ...Read More

Cost Account
Relation
THE COCACOLA COMPANY

Introduction
 One of the most successful company in the beverage industry to
be formed is the cocacola company.
 The company has been 125 years old starting its operations in
the year 1886.
 The company is listed in the top 100 companies in the Forbes
Magazine.
 The company manufactures four brands of beverages ranging
from coca cola, Diet coke, Sprite and Fanta.

Discussion
 The company has been facing in reduction in sales due to
competition from other brands over the years.
 The sales fell by 21.32% in the year 2016-2017 and by 10.56% in
the year 2017-2018.
 The cost of sales of the company however, also fell due to
reduction in sales but by greater percentages which is 21.6% in
2016, and 11.2% in 2017.
 The reduction in cost can be due to effective management polices
of the company which has hedged the fall in sales with reduction in
cost.
 However, the operating income has increased highlighting policies
to cater to new demands in the modern society.

Discussion
 The inventory analysis highlights the companies effective
production capabilities.
 The company has the main ingredient which is water and
channelizes water supply for unhamper production.
 The other raw materials are outsourced from the company from
various suppliers to achieve a bargaining power in the industry.
 The packaging bottles production is also outsourced to factories
which reduces investment of the company in heavy machinery.
 Thus the company can focus on manufacturing the 125 years old
guarded secret of Coca-Cola, and focus on the supply chain
management.

Discussion
 The company has its operations in over 200 countries, hence
analysing the revenue and cost for each country creates a
challenge for the company.
 The company invests in brand marketing heavily to maintain the
level of awareness among consumers with new healthier
products.
 The company faces the challenge to maintain its supply
irrespective of various global issues which is achieved by opening
new plants in countries to expand operations.
 The financials of the company is affected with fluctuations in the
currency which is hedged by the companies finance team to the
extent possible.

Conclusion
 The company is evolving with investments heavily to develop
healthier products with the same coca cola taste.
 The scarcity of water which is the main ingredient can affect the
production of the company along with the costs related to
manufacturing.
 The fluctuation in currency creates a huge fluctuation in the
financials of the company and creates a challenge to report fairly.
 Supply chain can be disrupted due to global events which can
affect the cost and the financials of the company severely.
 Anti Coca Cola campaign for healthier products is a challenge for
the company, which needs to be focused upon.

References:
 Ireland, R. and Ashton, J.R., 2017. Happy corporate holidays from
Coca-Cola.
 Gaither, B.M. and Austin, L., 2016. Campaign and corporate goals
in conflict: Exploring company-issue congruence through a
content analysis of Coca-Cola’s twitter feed. Public Relations
Review, 42(4), pp.698-709.