Coca-Cola Amatil Limited Case Study

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Introduction Coca-Cola Amatil Limited is a company that markets, distributes and manufactures a variety of food products and beverages. According, to their Annual Report 2015, in 1904 Coca-Cola Amatil Limited was originally British Tobacco Company established to take over a group of small local tobacco producers, then in 1964 the company purchased the controlling interest in Coca-Cola Bottlers Pty Ltd. In the preceding years Coca-Cola Amatil Limited has become the largest beverage manufacturer in Australia who independently manufactures its own soft drinks, coffee, energy drinks, flavoured milk, fruit juice, vegetable products, packaged ready-to-eat fruit and mineral waters. They distributes and sells the premium spirits portfolio of Beam…show more content…
It is used to evaluate the success of a business. Coca-Cola Amital return on total assets was high in 2012 at 6.8 but dropped significantly in 2013 to 1.2 the dropped happened because of the liquidation of SPC Ardmona (Germany) GmbH (In Germany) and CCKBC Holdings Ltd ( In Cyprus). With the liquidation of these two assets for the year 2013 the return on total assets decreased but in 2014 the company planned the acquisition of Beam Inc. by Suntory Holdings Limited, three production lines to be relocated and the reorganisation of the Australian Beverages Division thus causing better performance and the return on total assets to…show more content…
As such, this company is extremely liquid and should not have any problems paying creditors but interest cover ratio is not a perfect measure of a company financial health because taxes are not included in the earnings figure used to make the calculation this should be considered before investing. b) Also, with the Interest Coverage Ratio showing above 1.5 over the five year period indicates that the company has a high coverage ratio may suggest that the company is “too safe” and is currently neglecting opportunities to magnify earnings through leverage via investments. c) Over the five years period Cocoa-Cola Amital has maintained a current ratio of over 1.5. This indicates the company’s efficiency in using its current assets or its short-term financing facilities and turning its products into cash. As such, it would be wise to invest in Cocoa-Cola

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