AN ANALYSIS AND EVALUATION OF

THE FINANCIAL AND BUSINESS

PERFORMANCE OF COCA COLA
FROM 2012 TO 2014
STUDYIPASS INTERNATIONAL
WWW.STUDYIPASS.COM
[email protected]

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 1. Project Introduction

2. Accounting techniques and business models

3. Financial performance results

4. Business performance results

Agenda 5. Conclusion

6. Recommendation

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PROJECT INTRODUCTION

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 TOPIC AND ORGANISATION
TOPIC 8 COCA COLA
Coca Cola started in 1892 and is considered by
Topic 8 is about analysing and evaluating the Forbes as the 4TH World Most Valuable Brand
(Forbes, 2015). In 1919 5th September Coca
financial and business performance of a Cola was incorporated and currently has its
particular organisation over three years headquarters in Atlanta, Georgia (Reuters,
2015).
period. The Coca-Cola Company owns and licences
over 500 non-alcoholic beverage brands in
over 200 plus countries (Coca Cola, 2015). The
company products popularity has caused it 1.9
billion of its products to be consumed daily
(Coca Cola, 2015).

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 QUESTIONS & OBJECTIVES
OBJECTIVES QUESTIONS
To identify the financial performance of Coca What is the financial performance of Coca
Cola through the assessments of the financial Cola?
statements of Coca Cola
What is the business performance of Coca
To identify the business performance of Coca Cola?
Cola through the assessments of the
competitive environment of Coca Cola What is the performance of Coca Cola in
To identify the performance of Coca Cola comparison with Pepsi?
against Pepsi through the comparison of Coca
Cola performance against Pepsi performance What is the outlook of Coca Cola from the use
of the SWOT model?
To identify the overall outlook of Coca Cola by
using the SWOT model.

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ACCOUNTING TECHNIQUES AND
BUSINESS MODEL

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 ACCOUNTING TECHNIQUES AND
BUSINESS MODELS
Bargaining
Powers of
Profitability Customer

Efficiency Liquidity
Financial Threats of
New
Entrant
Competitive
Rivalry
Bargaining
Powers of
Suppliers
Ratios

Gearing Investor Threats of

Substitute

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ACCOUNTING TECHNIQUES AND
BUSINESS MODELS
STRENGTHS

THREATS SWOT WEAKNESSES

OPPORTUNITIES

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FINANCIAL PERFORMANCE RESULT

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 FINANCIAL PERFORMANCE
PROFITABILITY PERFORMANCE PROFITABILITY PERFORMANCE

REVENUE GROWTH NET PROFIT MARGIN

4.0000 20
18
3.0000
16
2.0000 14
PERCENTAGE

PERCENTAGE
12
1.0000
10
0.0000
8

-1.0000 6
4
-2.0000
2
-3.0000 0
2012 2013 2014 2012 2013 2014
COCA COLA 3.1692 -2.422058854 -1.826951808 COCA COLA 18.92246496 18.41038118 15.4876299
PEPSI-COLA -1.52171298 1.409332438 0.4035233 PEPSI-COLA 9.488181763 10.21907702 9.834590525

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 FINANCIAL PERFORMANCE
INVESTOR PERFORMANCE EFFICIENCY PERFORMANCE

PRICE PER EARNING RATIO ASSET TURNOVER

30 1.4

25 1.2

1
20
0.8
RATIO

RATIO
15
0.6
10
0.4

5 0.2

0 0
2012 2013 2014 2012 2013 2014
COCA COLA 17.985 20.63917526 26.51851852 COCA COLA 0.822871146 0.752747253 0.771144529
PEPSI-COLA 17.17676768 18.92677346 22.51740139 PEPSI-COLA 1.138021512 1.113616929 1.272163611

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 FINANCIAL PERFORMANCE
LIQUIDITY PERFORMANCE GEARING PERFORMANCE

QUICK RATIO Debt Ratio

1.1 0.8

0.7
1.05
0.6
1
0.5
AXIS TITLE

RATIO
0.95 0.4

0.3
0.9
0.2
0.85
0.1

0.8 0
2012 2013 2014 2012 2013 2014
COCA COLA 0.972790338 1.007766711 0.923148205 COCA COLA 0.615104324 0.628671367 0.667898243
PEPSI-COLA 0.885891509 1.053534391 0.968383816 PEPSI-COLA 0.699898175 0.685213867 0.75112397

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 FINANCIAL PERFORMANCE SUMMARY
I. Coca Cola Company financial performance over the three years has being very good but it
had issues with revenue growth, which encountered falling soft drinks demand and currency
exchange exposure.

II. In terms of efficiency it has been able to produce good results by turnover increments but it
had to deal with poor inventory turnover days. For liquidity and gearing terms it has been
able to ensure a good financial and liquid positions.

III. The ability of Coca Cola to reduce cost and grow profit has cause price per earnings to
increase for the past three years.
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BUSINESS PERFORMANCE RESULT

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 BUSINESS PERFORMANCE: COMPETITIVE
ENVIRONMENT
THREATS OF NEW ENTRANTS COMPETITIVE RIVALRY

1. Capital Intensive
1. Expensive Market Promotions AND
2. Brand Awareness
2. Out bidding each other sports sponsorship
3. Customer Base and Global Reach

4. Regulations

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 BUSINESS PERFORMANCE: COMPETITIVE
ENVIRONMENT
BARGAINING POWERS OF SUPPLIERS AND
THREATS OF SUBSTITUTE
CUSTOMERS
1. Easy to switch and no switch cost 1. Easy to switch and Lack of differentiation of
products among competitors (CUSTOMER)
The non-alcoholic beverages industry has a lot of
Due to the availability of products that can easily
different players, which offers buyers enticing
replace Coca Cola like Pepsi Cola and lack of
promotions and with no cost of switching it is
differentiation among their ingredients it is easier for
easy for buyers to try other products (Bailey,
customers to switch from Coca Cola to Pepsi Cola
2014). without a cost or regrets (Bailey, 2014).

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 BUSINESS PERFORMANCE: COMPETITIVE
ENVIRONMENT
BARGAINING POWER OF SUPPLIERS COMPETITIVE SUMMARY
I. the competitive rivalry in the beverage
1. In-house production of chemicals industry is very high.
(SUPPLIER) II. There is high threats of new entrants but
the dominate nature of Coca Cola and other
Four of the key supplier positions of non- brands makes it difficult to be successful
alcoholic beverages is syrup producers, III. The bargaining powers of customers is very
distributors, bottlers and merchants (Bailey, high
2014). The ones who controlled these four key IV. The bargaining powers of suppliers though
areas controls the beverage company. high it has little influence over Coca Cola
V. The threats of substitute is high since there
are so many similarities between Coca Cola
products and it competitors

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 BUSINESS PERFORMANCE: SWOT
STRENGTHS OPPORTUNITIES

1. BRANDING 1. EMERGING AND DEVELOPING MARKET

POSITIONS
2. PRODUCTS LINES
2. STILLED BEVERAGES
3. PARTNERS
4. FRANCHISE

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 BUSINESS PERFORMANCE: SWOT
WEAKNESSES THREATS

1. FALLING SODA SALES 1. CURRENCY FALLING

2. OVER DEPENDENCE 2. SUSTAINED ATTACKS ON FIZZY DRINKS

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CONCLUSION AND RECOMMENDATION

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 CONCLUSION
1. Coca Cola Company financial performance over the three years has being very good but it had issues with revenue growth, which
encountered falling soft drinks demand and currency exchange exposure but it profitability position is good. For liquidity and gearing
position, it is good but needs to bring it earnings per share performance to the same level as price per earnings.

2. Coca Cola Company has performed well in its business performance by appreciating the various competitive factors and positioning itself
well. For instances, whilst there are rivalry it has being able to position itself well to secure key platform like the FIFA World Cup. With
the threats of entry and substitute and bargaining powers of customers and suppliers, Coca Cola is well positioned.

3. In comparison with PepsiCo, it was concluded that Coca Cola has performed very well in many areas. However, it was realised that
PepsiCo ability to grow it food snacks has helped it to reduce inventory turnover days.

4. Coca Cola Company has the strengths it needs to counter its weakness weaknesses and take advantage of opportunities but the external
threats are not good enough.
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 RECOMMENDATION

Products Line Expansion

Currently there is a huge attack on Coca Cola Company flagship product Coca
Cola, therefore, it is advisable that as a company it will start expanding its
products line to include non-alcoholic ready-to-drink market products.

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 THANK YOU

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