Financial Statement Analysis
Marianne Marchant Margaret Pesikov Sean Lenehan
Table of Contents Questions to be answered
Management Discussion & Analysis section and Miscellaneous Income Statement and Profitability Cash Flows Balance Sheet Liquidity and Efficiency Solvency
3 6 12 14 18 22
Balance Sheet Income Statement
Questions to be answered: Management Discussion & Analysis section and Miscellaneous
1. Read the Management Discussion and Analysis and the
Chairman’s letter to shareholders. Describe the major products and services of the company.
The Coca-Cola Company is the ...view middle of the document...
We have a very positive impression of this company. It seems to us that it is very profitable, very dominant, and holds a very large amount of market power. What makes Coca-Cola very unique is their brand name which is nearly impossible for other companies to even attempt to compete with. During the year of 2009, Coca-Cola introduced Minute Maid Pulpy Super Milky in China, launched a beverage named Frestea Green to target active and healthy individuals in Indonesia, introduced Burn Energy Shots in Europe and sponsored several international events. Also, Coca-Cola became the first company in the beverage industry to commit to disclosing all of their beverage energy information (calories, kilocalories, etc) on all of their packaging. It is evident that Coca-Cola is very focused on the needs of their consumers and is constantly working on developing products that would benefit their customers. Coca-Cola adapts its products to the location to which it intends to market them. For example, in Japan there is a big national interest in recycling, therefore Coca-Cola took this into consideration and created a
bottle that is very light and able to be compacted so that it takes up very little space when recycled. It is this care for its customers and ethical financial behavior that ensures Coca-Cola’s yearly success and profitability. In the future, Coca-Cola will always be one of the most dominant companies in America as well as in other countries, regardless of the state of the economy.
3. Who is the company’s independent auditor and what type of
audit opinion was rendered? What does this opinion mean? Who is responsible for the company’s financial statements? Earnest & Young is the independent auditor for Coca-Cola Company. Their auditor stated that in their opinion Coca-Cola presented all their data fairly and awarded Coca-Cola a status of unqualified. This means that, to the best of their knowledge, Coca-Cola’s information is accurate. Since Earnest & Young gave Coca-Cola an unqualified status, both Coca-Cola and Earnest & Young are now responsible for the company’s financial statements.
4. What has the company’s stock been selling at over the past
three years? You can use quarterly or yearly information. What are your observations about the trend in stock price? What might be the cause(s) for this trend?
Over the past three fiscal years for Coca-Cola, 2007-2009, the company’s stock has reached a high of $63.81 and a low of $39.10.The fact that the company has stayed in the same approximate $20 range means that the company’s sales have stayed somewhat consistent. In the current year of 2010, the company’s stock has reached a high of $64.69 and a low of $49.47. In 2009, it reached a low of $39.10 and a high of $59.11. In 2008, it reached a low of $41.50 and a high of $63.77. In 2007, it reached a low of $45.89 and a high of $63.81. The drop of stock prices was due to a dispute with the company Costco who, in November 2009, stopped...