Essay: Financial Analysis of Coca Cola

11 Feb

Essay: Financial Analysis of Coca Cola

Sample Essay

The products of the company have been divided according in the categories of sparking beverage sand still beverages. The sparking beverages include carbonated drinks which are the most profitable and demanded products of the company. The still segment includes juices, mixers and coffees and teas which are increasingly becoming popular in the market, which is depicted through the increase in growth as per revenue earned from this segment. Geographically the markets which are most profitable for the company currently are the Latin Americana and the European markets.

In 2007 the gross margin for the company stood at 63.9, while the industry average was at 57.4. The pre tax margin for the company was at 26.9 while the industry depicted a 21.2 average. The net profit margin for the company in 2007 was at 20.6, while for the industry it was 16.5. The five year averages for the above mentioned ratios for the company as well as the industry are depicted in the following table

 

Company

Industry

5Yrs Gross Margin

64.4

56

5Yrs Pretax Margin

27.7

20.9

5Yrs Net Profit Margin

21.2

15.8

 

The five year analysis of the net profit margin for the company depicted that the company had an NPM of 20.3 in 2002, which increased to 20.8 in 2003, and further accelerated to 22.3 in 2004. However it reduced dramatically to 21.1 in 2005 and remained steady for 2006. since then it has decreased to 20.7 in 2007 depicting a decreasing trend for profit margin and profitability as whole for the company.

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