Financial statement analysis

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6 December 2017

Coca-Cola liability

The liability owned by Coca-Cola Company arose from the events they held in the past, the settlement which results in an outflow of economic benefits from the company. The current liability owned by the company declined from the years 2014 to 2016 financial years. These liabilities incurred during the normal business operation following twelve months and within one business cycles. Additionally, the company owns non-current liabilities which increased in 2014 to 2016 financial years; these non-current liabilities were also incurred during the normal business operations. By September 2017 the total current liability of the company was estimated to be $27, 633, (Sheth, 2017).

The company identified some of its contingent liabilities which were the warranty given on the purchase of the company products, the guarantee of other party’s loan and the lawsuits filed against the company. These liabilities are depended upon for future occurrence and cannot be converted into an actual liability. The company has, however, failed to fulfill some of the assured liability given to vendors of approximately $ 683 interndent to leased “Aqua-Chem” demanding payment of $10 million. These liability are rarely responded to by Coca-Cola Company, Sheth (2017).

The current long term debt to Coca-Cola Company sums up to $ 29684 million, as per September, 2017. The bonds offered by the Coca-Cola Company includes Coca-Cola Corp. bond income and Coca-Cola century bonds payable at $ 73.75 per year on a fixed income. The company also provides coupon bonds internationally which is premium based however its domestic in nature, the bond is subjected to discount,

Coca-Cola Company had no long-term capital leased in the recent years, (Berglund, 2017). The leverage ratio of Coca-Cola Company depends on equity and total liability change. By September 2017 the ratio was 6.83 where the total liability change was $ 2,627.335 million, and change in equity was $ 383.116 million. The Coca-Cola debt ratio are classified depending on the capital and equity, the debt-equity ratio is the total debt divided by the total equity of the company which deteriorated from the financial years 2014 to 2015and 2015 to 2016. Besides, the debt-capital ratio is the total debt divided by adjusted debt and total equity which as reduced in the same financial years, (Berglund, 2017).

The common stock of Coca-Cola Company mandated to by the shareowners are $ 0.25 per share value, and the share authorization of up to 11, 200 shares. The shares were issued to 7040 to the treasury stock at the cost of 2, 514. The shares in the last two years have been low. Proffered stock is issued when a company needs capital but does wish to take debts to the investors. The cumulative preferred stock of coca cola is $ 1911832.62 million which is the total long-term debt plus, the capital lease obligations, current portion of the long-term debt and the minority interest. The preferred stock is not used by the company. The recent cash dividend per policy by the end of 2015 to 2016 fiscal year was $1.22 per shares per year which was 2.89% to the investors. This amount is distributed quarterly on the earning per shares which is recently 0.27 per year. The Coca-Cola pays a quarterly dividend on the stock; these dividends have no impacts on the stock price with equal shares vales per shareholders, (Samantha, 2014). Coca-Cola treasury stock for Sep. 2017 quarter was $ 50,256 Million. Treasury stock may have come from a repurchase or buyback from shareholders, but not issued to the public. The reason for rebuying the stock was due to ownership consolidation, undervaluation, and boosting financial ratio. The company has a return on equity of 19.59%. The return on equity of Coca-Cola is $ 26.85 while the return on capital is approximately 9.42 of the total investment capital at a ratio of 12.23. According to (Heath, 2017), the current market value of Coca-Cola has increased for the recent one year by 0.42% to 45.97 USD. The company has constant cash flow due to the consistent replenishing of the stock and new product in to the market.

References Berglund, H. (2017). Civil society and political protest in India—The case of Coca-Cola in Kerala. India Review, 324-343. Heath, R. (2017). Issues Management in Investor Relations and Financial Communication. The Handbook of Financial Communication and Investor Relations, 261. Petty W., Titman S., Keown J., Martin P., Martin D., & Burrow M. (2015). Financial management: Principles and applications. Pearson Higher Education. Samantha, S. (2014). Coca-Cola Profit Declines 14%, Future Growth Plan Fails To Impress. Forbes Staff, 3 - 5. Sheth, J. (2017). Revitalizing relationship marketing. Journal of Services Marketing, 6-10.