Financial Management Assignment: Coca-Cola Company Analysis

This homework assignment explores the role of financial management in promoting a company's success and serving shareholder interests. The student analyzes the role of a financial manager, including capital requirements, source of funds, investment decisions, and profit and loss statements. The assignment then examines the Coca-Cola Company, outlining its ethical practices, social responsibility programs, and global influence from a financial perspective. The analysis incorporates information from annual reports and other credible sources, providing insights into Coca-Cola's commitment to business ethics, its social responsibility initiatives, and its financial performance in the global market. The assignment concludes with a discussion of Coca-Cola's global impact and financial standing, referencing relevant sources such as CNBC and the Federal Reserve Bank of St. Louis.

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Prompt 1
Response
Role of Financial Management in Promoting a Company’s Success.
Financial management is a discipline that starts from a personal level and then exhibited in the corporate world. Financial
management, according to Kadam, (2012), the main goals and contributions of financial management is proper financial planning,
directing and controlling in an organization. It involves managing financial activities like purchasing and also utilizing the funds of the
company. The Chief Finance Officer as a Financial Manager is tasked with making a decision that drives the company forward. It is
therefore clear that a financial manager has different roles. He/she is responsible for calculating and estimating capital requirements
for the company (Chand, 2019). Moreover, he/she engages in discussing with other management teams to make budget estimates for
the company. He determines the cost and also the projected profits and then concludes on the amount of capital that is required. These
discussions are done in consideration with the company policies and the main goal of profitability. After estimating the capital
requirements, the Finance Manager is required to advise the Board of Directors on the choice of source of funds.
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In addition to the above, the finance manager estimates capital requirements and decides on the source of money. Moreover, the
finance manager is tasked with deciding on the structure of the capital composition. The structure may include long term or short term
debt equity analysis; however, this depends on the equity a company has and further funds that can be got from the outside investors.
In investment, the choice of where to invest money is very crucial and a significant factor in determining the success of the business. It
is therefore the role of a financial manager to make a decision on the best investors for the company(Chand, 2019). As elucidated in
the above paragraph, the finance manager is tasked with the declaration of the profit and loss statement for public consumption and
taxation.
The role of financial management in serving the interests of shareholders.
The primary objective of all shareholders is profitability, sustainability and expansion. Therefore the financial manager ensures that
shareholders are kept aware of the financial stand of the organization in terms of performance(Chand, 2019). The above guarantees
productivity and supply hence, profit for the shareholders. The finance officer has to ensure that the company is self-sustaining and
earns profits to the shareholders by utilizing the funds available to him. To ensure the safety of the investment, he has to make good
decisions while choosing where to invest the money(Chand, 2019). This helps him maintain a positive balance sheet between
liabilities and asset.
Moreover, the financial manager plays a vital role in taking into consideration the different interests as presented by the shareholders.
He/she makes a decisions to declare dividends or retain the profits for business diversification and expansion. Both options would
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favor the shareholders because the company gains in terms of assets, and the shares grow(Chand, 2019). The Chief Finance Officer is
responsible for controlling and administering cash. Cash control is one of the most complex parts of management because when cash
is 'tightened,' some employees who have had chances to embezzle develop hatred for the management and work against. However, it
is a crucial part in determining the success of the business(Chand, 2019). Administering cash involves ready cash for paying salaries
and wages, maintenance of stock, purchasing more stock, paying company bills. For shareholders to trust management, there should
be good financial controls. This reveals itself from the performance of the company(Chand, 2019). It will show the shareholders that
the assets are being put to good use, they are secure, and the managers are working in the best interest of the shareholders. A finance
manager is also tasked with utilizing the available funds. He should use the money to invest in the most profit but secure ventures.
Prompt 2
Analysis of a Publicly Traded Company
Response
Analyze annual reports and other credible sources to outline a publicly traded company’s ethics practices from a financial
point of view
Coca-cola Company is a multinational company that is found in America dealing in the manufacturing of nonalcoholic beverages. It is
well known for its ordinary brand coca cola which it invented in 1886. Coca Cola Company is committed to business ethics is
paramount, and it is the practice everywhere it operates. The company has a reliable and comprehensive code of conduct, which is the
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foundation of their compliance with ethics. According to Murillo and Martinek, (2019), Coca-Cola's anti-corruption initiative ensures
that the business of Coca-Cola is conducted in an ethical, fair, and follows the law worldwide and ensures that it observes integrity,
respect, and honesty in the course of its operations. The company tries to avoid corruption of any form, especially in crucial areas like
recruitments.
The company developed clear guidance to be supported through the coca cola subsidiaries around the world. These guidelines also
extend to the business partners like the suppliers, dealers so that across all areas of Coca-Cola service business ethics are observed.
The above are meant to ensure that there is a high degree of integrity, respect, and honesty in the company operation(Coca-
colaarabia.com, 2019).There is a full department of ethics and compliance that oversees all ethics programs, and thorough evaluation
determines the disciplinary measure. Furthermore, to ensure compliance, the company has an online platform where individuals may
report or ask about compliance and ethical issues. It is on the basis on the above that transparency in financial reporting has been the
core of the company operations, which has made it a successful company with high degree of revenues and profitability Coca-
colaarabia.com, 2019).
Analyze annual reports and other credible sources to outline a publicly traded company’s social responsibility programs from
a financial point of view.
Moreover, Murillo and Martinek, (2019) asserts that Coca-Cola Company observes integrity, respect, and honesty in all its
subsidiaries worldwide. This ethical behavior has enabled it to earn an excellent public reputation in that it is successful, and it is
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widely spread world all over. Many other affiliates like a minute maid, the coffee brand joined it to do business because of its
integrity. Doing business ethically has helped Coca-Cola to remain in business amidst competition from other beverages like Pepsi
Cola, which is its main competitor because its products are more or less the same(Coca-colaarabia.com, 2019). The company also
respects its employees across the globe without racial segregation, and this has enabled Coca-Cola to retain the best employees.
Observing business ethics is one of the factors that has made Coca Cola remain profitable hence satisfying its shareholders(Kadam,
2012).
Coca Cola is a multinational corporation, the company serves 200 plus countries around the world, and social responsibility is at the
forefront of its business. Through it's widely spread subsidiaries, its endeavor to build sustainable communities by giving back to the
community. The company spends close to 1% of its operating income on social responsibility, and one of the programs is the
sponsorship of the secondary schools post-Coca Cola cup in Uganda. It also provides clean water to the refugees in the Middle East,
and besides, there is also a program named "Ripple of Happiness," which supports university students. This initiative seeks to develop
a set of entrepreneurs from universities (Coca-colaarabia.com, 2019). Therefore, according to Murillo and Martinek, (2019), the above
cooperate responsibility by the company promotes its activities and ensures competiveness. Therefore, there is need to maintain the
current social activities and even expand to other countries or engage in more social related activities.
Analyze annual reports and other credible sources to outline a publicly traded company’s global influence from a financial
point of view.
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According to Murillo and Martinek, (2019), the company has expanded its operations in quite many countries around the world. In
most countries like in Uganda in Africa, Europe and other parts of the world, the company has heavily engaged in social responsibility
activities. The company has influenced the mode of operation of football leagues in Africa, marathons and heaving funded students in
different higher institutions of learning. The company's global influence has been phenomenal and continues to increase over the years
through its brands (Coca-colaarabia.com, 2019).
Because of its international engagements, its market has increased which has positively impacted its funds. The company operation
across the world through the different services has accumulated more than $31.8 billion dollars as of 2018 (Coca-Cola Company
2018). Moreover, its operations are now across all the continent, which has made in a well defined and established company. Coca
Cola ranked 6th when Forbes Magazine investigated and ranked the worlds valuable brands. Carter, (2019) asserts that if a person
invested $1000 in Coca Cola ten years ago, by now, it would be $2,800 as of 2019. The illustration shows how profitable coca cola is
and therefore, it is worth investing in. From the above analysis, Coca Cola should be included in the Pioneer Fund. Coca Cola stocks
declined and are trying to stabilize by including a variety of brands of drinks in addition to the soda. This imbalance can create
uncertainty; however, because of the history, one should have confidence.
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References
Carter, M. S., (2019). If you invested $1000 in Coca Cola 10 years ago, here's how much you'd have now: Make it: Retrieved
from:https://www.cnbc.com/2019/02/15/if-you-put-1000-dollars-in-coca-cola-in-2009-heres-what-youd-have-now.html
Chand, S., (2019). Functions of a Financial Manager (Management). Accessed from web:
http://www.yourarticlelibrary.com/financial-management/8-functions-of-a-financial-manager-management/27972.
Coca-colaarabia.com (2019). Corporate Social Responsibility: it’s in our DNA. Our Company. Retrieved from: https://en.coca-
colaarabia.com/our-company/corporate-social-responsibility-it-s-in-our-dna
Kadam, N., R. (2012). Financial Management For The Organizational Success: Challenge Before Finance Managers. International
Journal of Advanced Research in Management and Social Sciences. ISSN: 2278-6236: Retrieved from
https://www.academia.edu/5450710/FINANCIAL_MANAGEMENT_FOR_THE_ORGANIZATIONAL_SUCCESS_CHALL
ENGE_BEFORE_FINANCE_MANAGERS_INTRODUCTION
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Murillo H., R and Martinek J., C, (2019). Corporate Social Responsibility Can Be Profitable. Federal Reserve Bank of St. Louis:
Retrieved from https://www.stlouisfed.org/publications/regional-economist/april-2009/corporate-social-responsibility-can-be-
profitable
The Coca-Cola Company (2018). Ethical Business Conduct. Retrieved from:https://www.coca-colacompany.com/stories/ethical-
business-conduct
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