the cocacola company
Coca-Cola Company
Student’s Name:
Instructor’s Name:
Course Name:
Course Number:
Institution:
Date:
Coca-Cola Company
The Coca-Cola Company is an American company with multiple branches worldwide making it a multinational beverage corporation, manufacturer, retailer and marketer of nonalcoholic beverage syrups and concentrates. Coca-Cola is headquartered in Atlanta, Georgia and is famous for its product Coca-Cola which was introduced in 1886. Coca-Cola was introduced by a pharmacist John Smith Pembert in 1886. In 1889 the Coca-Cola formula was introduced by Asa Griggs Candler who later incorporated the company. Since 1889 Coca-Cola has operated a franchise business or distribution system. The company was incorporated on 5 September, 1919. This company is own licenses to market more than 500 brands on non-alcoholic beverages. These beverages include a variety of sparkling beverages, juices, drinks and enhanced waters. Along with the above brands, the company owns a market range of non-alcoholic sparkling brands of beverages which are the Coca-Cola itself, Fanta, diet coke and sprite. Coca-Cola is listed in NYSE and is part of DJIA, S&P 500 index. The reigning Coca-Cola chairman is Mr. Muhtar Kent. As at December 2013, Coca-Cola had a total of 130,600 employees. Coca-Cola is a multinational company with branches and sub-branches all over the world. Its segments are Eurasia and Africa, Latin America, Europe, North America, Pacific, Bottling investments and Corporate. The company is characterized with great achievements and success with the recent achievements being the acquisition of the Great Plains Coca-Cola Bottling Company in the Great Plains of the Unites States in December 30, 2011. It also acquired the remaining interest in Honest Tea, Inc, and Great Plains in the year ended December 31, 2011. CITATION Dab13 l 1033 (Dabbagh, 2013) Other achievements are the acquisition of the additional interests in Coca-Cola Central Japan Company in the central district of Japan in December 2011. Other acquisitions were in September 2012 when it acquired an estimated 50 % equity of Aujan Industries’ business of beverages. That was followed by the announcements of Sacramento Coca-Cola Bottling Company that it had been fully acquired by the company in January 2013 and from February 22, 2013 the company acquired interest in Fresh Trading Company Ltd. It also acquired the ownership interest in ZICO beverages LLC in November 2013.
Coca-Cola manufactures markets and sells the concentrates of beverages. These are also known as syrups, bases which include fountain syrups still beverages which are finished sparkling. There are also bottling partners who buy the concentrates for fountain beverages. Coca-Cola sells many sparkling beverages like juices drinks, juices, sport drinks, energy drinks, teas and coffee of ready to drink nature, and specific water products. These are always sold to the retailers and distributors, bottling partners, and wholesalers who the n are tasked with distributing them to the retailers. This is always done outside United States. In the US, the company sells the fountain syrups to fountain retailers after manufacturing them. These retailers may include restaurants and large convenient stores that are capable of producing beverages for immediate consumption out of the fountain syrups. It also sells to its bottling partners that are tasked with reselling the syrups to the retailers and also some authorized fountain Wholesalers. CITATION Dab13 l 1033 (Dabbagh, 2013)
In the Latin American countries like Brazil, the company, Coca-Cola manufactures markets and sells brands like Leao/ Matte Leao teas. It however does so in a joint venture with its bottling partners. The year 2011 saw the company increase its sales in the Latin American countries when it introduced a variety of Brands, Brand extensions, and Beverage products. Brands such as Frigos Sabores Caserao were introduces. In the Pacific Fanta which is a sparkling fruit flavored beverage was introduced especially in Malaysia and Singapore. In Vietnam there was an introduction of Real Leaf which was a green tea based beverage. There was also introduction of the three flavor variant of the Georgia Emerald Mountain Ready to drink coffee Beverage and Burn Intense in South Korea. Powerade was launched by the Europe group in Norway, Denmark, France, and Sweden. Other brands that were launched were Cappy pulpy in Turkey and Fanta Powder in India by the Eurasia Group. In the East African market the company launched soft drinks like Schweppes Novida, and Malta drink. There was also introduction of cappy fruit bite in Egypt and Schweppes Gold Malta drink in Ghana. With the introduction of this major brand across the world the company was able to make approximate sales of 26.7 billion unit cases for its products.
The core products of the company are sparkling beverages such as the famous Coca-Cola, Fanta, Sprite, diet coke, among others. The company waters are Dasani, ice dew, Ciel among others.
Coca-Cola Company is in direct competition with Pepsi Company Inc, Nestle, Dr Pepper Snapple Group, Groupe Danone, Uniliver and Kraft Foods among others. Pepsi Co is the company’s major competitor within the beverage and food space. Coca-Cola is an unmatched global leader in its industry with a total of 500 carbonated and non-carbonated beverages. It has a global bottling operations and distribution channels worldwide. Coca-Cola and Pepsi have for years been engaged in rivalry over the market share as well as brand recognition. Pepsi on the other hand has the following advantages and strengths over the Coca-Cola Company: it has a consistent track record of balanced revenue generation and reinvesting in brands it also enjoys strong brand recognition as it is the number two player in the global beverage industry and a global leader in Salty snacks. This can be seen by its ownership of the two wellness and health brands, the famous Tropicana and Gatorade. Another advantage that the company has over its rival the Coca-Cola is the ability to sell both snacks and beverages that are complements in the food category. Pepsi is a threat to the Coca-Cola because of its operation in Canada, Russia, Mexico, and the United Kingdom. It also has very strong and emerging markets of like India, and China. There is huge role in the company’s played by product innovation. This can be seen through the regular creation of flavors from the existing products as well as maintenance of robust pipeline of the products. However the company’s North American market has been showing sluggish results because of the rising costs of raw materials which hurt the company’s margins.
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED BALANCE SHEETS
In Thousands (Except Share Data)
Dec. 29,2013 Dec. 30,2012
ASSETS
Current assets: Cash and cash equivalents $ 11,761 $ 10,399
Accounts receivable, trade, less allowance for doubtful accountsof $1,401 and $1,490, respectively 105,610 103,524
Accounts receivable from The Coca-Cola Company 17,849 15,521
Accounts receivable, other 15,136 12,876
Inventories 61,987 65,924
Prepaid expenses and other current assets 26,872 33,068
Total current assets 239,215 241,312
Property, plant and equipment, net 302,998 307,467
Leased property under capital leases, net 48,981 54,150
Other assets 58,560 53,801
Franchise rights 520,672 520,672
Goodwill 102,049 102,049
Other identifiable intangible assets, net 3,681 4,023
Total assets $ 1,276,156 $ 1,283,474
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED BALANCE SHEETS
Dec. 29,2013 Dec. 30,2012
LIABILITIES AND EQUITY
Current liabilities: Current portion of debt $ 20,000 $ 20,000
Current portion of obligations under capital leases 5,939 5,230
Accounts payable, trade 43,579 51,651
Accounts payable to The Coca-Cola Company 25,869 27,830
Other accrued liabilities 77,622 75,113
Accrued compensation 31,753 32,428
Accrued interest payable 4,054 4,060
Total current liabilities 208,816 216,312
Deferred income taxes 153,408 140,965
Pension and postretirement benefit obligations 90,599 140,719
Other liabilities 125,791 118,303
Obligations under capital leases 59,050 64,351
Long-term debt 378,566 403,386
Total liabilities 1,016,230 1,084,036
Commitments and Contingencies (Note 13) Equity: Convertible Preferred Stock, $100.00 par value:Authorized-50,000 shares; Issued-None Nonconvertible Preferred Stock, $100.00 par value:Authorized-50,000 shares; Issued-None Preferred Stock, $.01 par value:Authorized-20,000,000 shares; Issued-None Common Stock, $1.00 par value:Authorized-30,000,000 shares; Issued-10,203,821 shares 10,204 10,204
Class B Common Stock, $1.00 par value:Authorized-10,000,000 shares; Issued-2,737,076 and 2,716,956 shares, respectively 2,735 2,715
Class C Common Stock, $1.00 par value:Authorized-20,000,000 shares; Issued-None Capital in excess of par value 108,942 107,681
Retained earnings 188,869 170,439
Accumulated other comprehensive loss (58,176 ) (94,526 )
252,574 196,513
Less-Treasury stock, at cost: Common Stock-3,062,374 shares 60,845 60,845
Class B Common Stock-628,114 shares 409 409
Total equity of Coca-Cola Bottling Co. Consolidated 191,320 135,259
Non-controlling interest 68,606 64,179
Total equity 259,926 199,438
Total liabilities and equity $ 1,276,156 $ 1,283,474
Consolidated Balance Sheet
PepsiCo, Inc. and Subsidiaries
December 28, 2013 and December 29, 2012
(in millions except per share amounts)
2013 2012 ASSETS
Current Assets
Cash and cash equivalents $ 9,375 $ 6,297 Short-term investments 303 322 Accounts and notes receivable, net 6,954 7,041 Inventories 3,409 3,581 Prepaid expenses and other current assets 2,162 1,479 Total Current Assets 22,203 18,720 Property, Plant and Equipment, net 18,575 19,136 Amortizable Intangible Assets, net 1,638 1,781 Goodwill 16,613 16,971 Other nonamortizable intangible assets 14,401 14,744 Nonamortizable Intangible Assets 31,014 31,715 Investments in Noncontrolled Affiliates 1,841 1,633 Other Assets 2,207 1,653 Total Assets $ 77,478 $ 74,638
LIABILITIES AND EQUITY
Current Liabilities
Short-term obligations $ 5,306 $ 4,815 Accounts payable and other current liabilities 12,533 11,903 Income taxes payable — 371 Total Current Liabilities 17,839 17,089 Long-Term Debt Obligations 24,333 23,544 Other Liabilities 4,931 6,543 Deferred Income Taxes 5,986 5,063 Total Liabilities 53,089 52,239 Commitments and contingencies Preferred Stock, no par value 41 41 Repurchased Preferred Stock (171 ) (164 )
PepsiCo Common Shareholders’ Equity
Common stock, par value 12/3¢ per share (authorized 3,600 shares, issued, net of repurchased common stock at par value: 1,529 and 1,544 shares, respectively) 25 26 Capital in excess of par value 4,095 4,178 Retained earnings 46,420 43,158 Accumulated other comprehensive loss (5,127 ) (5,487 )
Repurchased common stock, in excess of par value (337 and 322 shares, respectively) (21,004 ) (19,458 )
Total PepsiCo Common Shareholders’ Equity 24,409 22,417 Noncontrolling interests 110 105 Total Equity 24,389 22,399 Total Liabilities and Equity $ 77,478 $ 74,638 (Penzkofer, 2013)
Bothe companies looks financially sound with good profit margins. Coca-Cola is showing much more improved margins than the Pepsi. However its revenues are showing decreasing trends which calls for action. The company should be more concerned in increasing its revenues and decreasing its debts. Pepsi on the other hand is showing decreasing liabilities which is a good gesture. Its revenues are also decreasing but at a very slight level and therefore acts as a wakeup call for the company to increase on its revenues. The total debts of Pepsi is decreasing and that
Given the above information and the recent management of Pepsi and Coca-Cola company, we can dig into the absolute performance of the companies. The following graphs can help explain the position of the Pepsi Co, inc. and Coca-Cola Company (McGowan,2014).
From the chat, we can clearly see that Coca-Cola’s performance outstrips the performance of Pepsi by over 30%. This performance is as a result of the investment community concern towards the change in Pepsi’s corporate strategy towards health, wellness awareness that is enthusiasm for the company and looks to be unfounded.( Zach Investment Research)
It is not something new unique that Pepsi has been on the rise and winning the war against Coca-Cola in the New York Stock Exchange. However individuals are still clinging towards Coca-Cola when purchasing. People think that there is something else entirely to Pepsi than to Cola. Pepsi has also gained customer loyalty with many seeing only Pepsi on the shelves. With a combination of Beverage and Snack business, Pepsi is definitely a force to closely watch.
Fortunately for PepsiCo, more than 40% of its incomes originated from salt not sugar based things. Snacks promoted under Frito-Lay brands represent more than 60% of American salty nibble utilization. The organization likewise has Good-For-You and Better-For-You portfolios with lower fat and expanded nourishment alternatives that incorporate a few Quaker brands sustenance for wellbeing clients. According to Yahoo finance, with return of about 19% not long from now, PepsiCo’s profits have bested Coca-Cola’s 9% year-to-date execution. At that point it was reported that restaurant network Buffalo Wild Wings has exchanged beverage suppliers from Coca-Cola to Pepsi, planning to profit from the letters’ ties with the National Football League and Major League Baseball.
According to the recent surveys and the market trend in beverage industry in north America and as local deals slip and shimmering refreshments neglect to develop, Coca-Cola knows it has an issue and has even thought of an answer. Yet as shares sink lower, speculators appear unconvinced the drink behemoth’s arrangement is sufficient.
The Coca-Cola Company reported $12 billion in second from last quarter income, level from the same period a year ago. Joined with deals decreases in the initial two quarters of the year the organization’s year-to-date income is down 2%. Net wage for the quarter came in at $2.1 billion, down an astounding 14% from a year ago. At 48 pennies, profit every offer were 6 pennies underneath the year earlier outcomes and 4 pennies short of Wall Street examiners’ accord gauge.
In light of difficulties at home and in key business lines Coca-Cola reported a development arrangement Tuesday morning. In a different proclamation CEO Muhtar Kent said, “We have investigated our advancement to date and understand that while the methods we laid out toward the start of the year are on the whole correct, the extension and pace of our activities must increment. Notwithstanding reporting an extended gainfulness program, we are streamlining our operations and further adjusting our motivation arrangements to convey against our development targets.”
The arrangement incorporates an improved working model with a more prominent concentrate on nearby markets, going for $3 billion in “annualized funds” every year by 2019 and additionally refranchising most organization claimed North American packaging domains before the end of 2017 and an a significant number of the remaining regions by 2020. The organization will likewise recharge its emphasis on showcasing and will include income as a metric in its motivator arrangement (yahoo finance)
In light of difficulties at home and in key business lines Coca-Cola reported a development arrangement Tuesday morning. In a different proclamation CEO Muhtar Kent said, “We have investigated our advancement to date and understand that while the methods we laid out toward the start of the year are on the whole correct, the extension and pace of our activities must increment. Notwithstanding reporting an extended gainfulness program, we are streamlining our operations and further adjusting our motivation arrangements to convey against our development targets.”
The arrangement incorporates an improved working model with a more prominent concentrate on nearby markets, going for $3 billion in “annualized funds” every year by 2019 and additionally refranchising most organization claimed North American packaging domains before the end of 2017 and an a significant number of the remaining regions by 2020. The organization will likewise recharge its emphasis on showcasing and will include income as a metric in its motivator arrangement.
The unit case volume went up 1% for the quarter. The volumes in North America declined with 1% even with the 1% growth of International volume in the quarter, volume. A 5% decrease in unit case volume in Europe was somewhat balanced by 5% development in Eurasia and Africa, making it clear that a great part of the organization’s battles lie in created markets. General still drink volume was up 2% in the quarter, tea contributed 4% and both water and caffeinated beverages volume on an upward shift 7%. Shimmering drink volume was level for the quarter (Healy 2012).
References
Zach Investment Research
Dabbagh, A., Heidary Moghadam, A., Naderi, S., & Hamdi, M. (2013). A study on the effect of coke particle size on the thermal profile of the sinters produced in Esfahan Steel Company (ESCO). Journal of the Southern African Institute of Mining and Metallurgy, 113(12), 941-945.
Penzkofer, A. (2007). The Market of Pepsi/PepsiCo. Berlin: GRIN Verlag.
McGowan, C. (2014). The Fundamentals of Financial Statement Analysis as Applied to the Coca-Cola Company. Business Expert Press.
Healy, P., & Palepu, K. (2012). Business Analysis Valuation: Using Financial Statements. Cengage Learning.