Coca Cola Financial Analysis

Financial Analysis of Coca Cola:

Exhibit 4 contains consolidated detailed balance sheet and income statement in addition to the overall summary of operations for the last five years. It is clear from the data that there is a gradual decrease in revenues and net profits. We also see a gradual rise in debt and interest expenses, whereas the cash dividends based on per share date is increasing.

Exhibit 5 details the ratio analysis as well as performance review with respect to market and with respect to competitors. From the financial ratios it is evident that the debt-equity ratio is increasing from 0.45 to 1.29 and financial leverage also increasing to 3.78 from 2.63 showing that the firm is going towards long term debt structure. The ratios

The step 2 of the strategy generation is done in exhibits 9, 10, 11, 12, and 13 as BCG, IE, Grand, SHAPE, and SWOT matrices. The result of the five matching stage matrices is then tabulated in exhibit 14, which shows the suggestion of adoption of market penetration, product development, diversification, and integration strategies.

From SO strategies, two strategies: one for diversification into the healthy snack food business, and other for the introduction of a new low calories energy drink line are evaluated through QSPM in exhibit 15. The result is in favor of diversification strategy, although the scores for the two strategies are quite close.

Conclusion and Recommendations:

In our analysis, Coca Cola’s has fully exploited and enjoyed its first mover advantage in the carbonated beverage industry, but since the industry has shifted to its maturity stage and the advent of technological advancement coupled with consumer awareness has changed the dynamics of competition in the beverage industry. Keeping, this scenario in mind, we propose the following

It will give an edge to Coca cola over Dr. Pepper and Pepsi Co., and will also help in regaining the market leadership. Through sponsorship of football leagues, very popular in Europe Coca Cola will rebuild its diluted brand equity.

 The strategy of focusing on core business and outsourcing the downstream activities in te value chain is good and successful, the company must divest from bottling plants and invest that amount in new product development.

 Given the increased health consciousness and changing lifestyle, its important for the company to focus on bottled water market, especially the new lucrative segment of sweetened bottled water in which Pepsi Co. is taking the lead.

 In emerging economies like India, and Latin America and also China, Coca Cola should adopt a market penetration strategy with its core products of Coca Cola, Diek Coke, Fanta, and Sprite, and focus on gaining the market share as huge potential in carbonated beverage industry lies in these