Selection of the Company
Publicly traded company: Coca-Cola Financial Analysis
Imagine that you have been tasked by the Director of Finance of your company to perform an analysis of one of your competitors. Coca-Cola Company is a publicly traded company. Your assignment is to examine the Coca-Cola Company on the factors listed below and provide an evidence-based opinion regarding its financial soundness. You will be required to conduct research regarding a specific business and country.
For this analysis, you will need to investigate the company on the Internet (e.g., www.yahoofinance.com) and through a premier source for peer-reviewed, full-text articles from journals and reference sources. You are required to adhere to APA guidelines and to cite your sources (in-text citation and reference page). Do not copy tables or material and present them as your own. The University is very serious about plagiarism. Materials that are found to be plagiarized are subject to disciplinary action and possible dismissal from the University as per the academic code of conduct policy. All papers will be submitted to the plagiarism Software Suite.
1.Introduction. Provide a brief focus statement about your paper and what the reader can expect.
2.Selection of the company. Provide a brief profile of the selected company and your rationale for selecting it.
3.Short- and long-range financial problems. From your analysis of research materials, examine the company and provide a report on the short- and long-range financial problems that are evident from the review. If you find no short- or long-range financial problems, provide the evidence to justify this conclusion.
4.Optimal capital structure to manage financial performance. Define capital structure. Provide examples of the company’s capital structure and its influence, or lack of influence, on the financial performance of the firm.
5.Financial statements and financial decisions. Analyze the firm’s financial statements and the decisions that appear to have been made to prepare the financial statement.
6.Articulate how the cost of capital is defined and measured. Define the cost of capital and how it appears to be measured in your selected firm.
7.Present value. Calculate present value using applicable present value tables.
8.Summary. Provide a few concluding paragraphs about how your chosen company adheres or does not adhere to sound financial principles.
Note: Follow the Format and Label each part.
1.The Coca-Cola Company is the selected Industry. Get at least 1 other firm within the same industry.
2.In addition, obtain two (2) years of financial data for each firm. A good place to go for such data is the Form 10X, this form must be filed annually to the Securities and Exchange Commission (SEC) by each publicly traded company.
3.Calculate the ratios and determine in what direction the firm is moving with respect to its finances (i.e.: increasing debt or shedding debt).
4.Determine which ratios are most important to that industry and compare them with each other and make some speculations as to how Coca-Cola is performing. For example, product turnover is important to the Fast Food Industry.
5.Look at the two (2) firms’ financial operations to see if they are extinguishing or taking on new debt and why. (Tip: In order to get a better understanding on how the firm is financing investments in assets, make sure to review preferred stock, common stock, and long-term debt).
6.Make sure you discuss the firms Long Term and Short Term Goals in terms of the data you collected and generated. This is a required element of this assignment.
7.From the data you collected and analyzed determine or discuss what the firms Optimal Cost of Capital Structure should be or indicate how these figure or charts could be found and put together. Again, this is a required element of this assignment.
8.Financial Statements, which include Balance Sheet, Income Statement, Statement of Cash Flows, etc., represent the type of material needed in this section. Not only present these statements but point out significant events and what they mean. This is also a required element of this assignment.
9.Cost of Capital is a critical factor needed to run a business. A business person labors hard to reduce the firm's Cost of Capital to the optimum. This topic is also a required element in this assignment.
10.Present Value: This subject is VERY important to financial analysts. For example, you, as a financial analyst, have been tasked to value a firm which the owners desire to sell. The firm has a lot of assets that can easily valued. There are some buildings and land. What is not so easy to find is the value of the new contracts they have secured, the value of work in process (WIP), The value of inventory needed to complete WIP and the new potential contracts. Accordingly, I have to determine the Present Value (PV) of these items plus what ever GOOD WILL the firm may possess.
One way to do this, and there are others, is to captialize the gross profits by dividing it by the Optimal Cost of Capital. Simply stated the
PV= (Gross Profits)/(Optimal Cost of Capital).
11.Finally based upon all this information make an educated speculation as to how Coca-Cola compares to its competitors and possibly its industry writ large.
Thoroughly discuss the topics described above and, when possible, provide specific examples or recommendations. Your paper should:
Follow academic research approaches and APA citation format, including in-text citations and a References list.
Have at least 10 references from academic books, journal articles, and/or credible online sources.
Be well-developed and convey full understanding of financial concepts.
Be organized, coherent, and unified, as well as free of spelling, structure, and grammatical errors. Save it in MS Word.