Sample - Fsa Assignment- Mod000986

8/17/2019 Sample - Fsa Assignment- Mod000986

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Financial Statement Analysis

Course: Master of Business Administration- Full Time

Academic Year: 2014/15

Module: Financial Statement Analysis

Module Code: MOD000!"

Semester/Trimester:

ID of Student:

Word Count: 2250

Student ID: Module Code:MOD000!" Page 1


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TABLE OF COTETS

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i. About the Company.............................................................................................................................................. 3

ii. About the Industry& Competitors................................................................................................................ ........ 3

iii. Key elements of Financial Performance...............................................................................................................4

iv. Current Maret Conditions that Impact Coca Cola!s Financial performances...................................................."

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1 E!EC"TI#E S"MMA$Y

T9is re:ort :ro;ides an in de:t9 critical analysis and com:arison of &oca-&ola &o#7s financial

:erformance o;er t9e :ast 5 years i#e# 200-201,# T9e second lar

ready to drin? tea and coffee> under t9e leadin< =rand names of coca - cola> diet co?e> fanta and

s:rite#

ii A&out t'e Industr)* Com(etitors

T9e maor com:etitors of &oca &oal &o# are 6e:si &o# (nc#> estle> Monster Be;era

rou:eDanone> raft Foods rou:> 'nile;er rou:> etc# 9ic9 com:ete in a multi:le


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Be;era all t9is ma?es it ;ery difficult for ot9er com:anies to ma?e an entry into t9e industry and

t9us :rotect t9e com:any7s :rofita=ility in t9e industry#

iii +e) elements of Financial ,erformance

Financial statement analysis is t9e :rocedure of collectin e;aluatin analyin< and inter:retin<

t9e financial data of a com:any alon< it9 measurin< t9e ris?s and returns for t9e in;estments

6amela 6eterson Dra?e> Fran? E# Fa=oi> 2012> ::# 101-102#

T9e data for financial analysis is ta?en from t9e financial re:orts annual re:orts of t9e

com:any> i#e# (ncome Statement> Balance s9eet 8 &as9 Flo statement> 9ic9 is t9en used for

analysis =y com:utin< t9e ratios o?ul Sin9a> 200#

T9us> t9e financial statement analysis 9el:s in decision ma?in inter and intra com:any

com:arison> determines t9e financial :erformance and :osition of t9e firm in t9e mar?et# (t also

9el:s t9e in;estors to com:are and analye as to 9ere to in;est t9eir money T9omas *#

*o=inson> 6aul Munter and Eulia ran> 2004#



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i; Current Mar-et Conditions t'at Im(act Coca Cola6s Financial (erformances

Figure 1:Source: Created for the purpose of this assignment.

T9e dia:olitical>en;ironmental>le


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, C$ITICAL AALYSIS OF COCA COLA

i $ATIO AALYSIS

1 LI7"IDITY $ATIOS

CURRENT RATIO (CR)

CURRENTASSETS

CURRENTLIABILITIES

T9e o=ecti;e of t9e ratio is to calculate t9e safety mar it states t9at t9e firm is

una=le to meet its s9ort term lia=ilities &orey> et al#> 201,#

From 1#2!1 in 200 t9e &* 9as di::ed to 1#1,1 in 201,> t9is s9os t9at t9e com:any is

increasin< its current lia=ilities as com:ared to 200#



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- QUICK RATIO (QR)

QUICKASSETS

CURRENTLIABILITIES

T9e ratio si 2012#

From 0#51 in 200 t9ere is fall in t9e * to 0#01 in 201,# T9is states t9at t9e com:any is

9a;in< less issues in :ayin< off its current lia=ilities it9 t9e cas9 a;aila=le to t9em#



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3 ABSOLUTE LIQUID RATIO (ALR)

CASHANDMARKETABLESECURITIES

CURRENTLIABILITIES

T9e ratio measures t9e a=solute li@uidity of t9e =usiness for :ayin< off its current s9ort term

de=ts eliminatin< t9e account recei;a=les as t9ere is uncertainity a=out t9eir fast collection# T9e

ideal ratio is 0#51)# # oyal and *uc9i oyal> 2012#

(n 200 t9e ratio as 0#"31 and 9ad increased to 0#3,1 in 201,# T9us> it states t9at t9e com:any

9as enou


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4 C URRENT CASH DEBT COVERAGE RATIO

NETCASHPROVIDEDBYOPERATINGACTIVITIES

AVERAGECURRENTLIABILITIES

T9e ratio 9el:s in measurin< 9o li@uid t9e com:any is and also identifies t9e mo;ement of t9e

cas9 flos o;er a s:ecific :eriod of timeS## Ma9es9ari> S## Ma9es9ari> 200#

From 0#"11 in 200> &oca &ola &o#7s current cas9 de=t co;era =ut is still mana


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2 SOL#ECY $ATIO

DEBT-EQUITY RATIO

LONG−TERMDEBTS

SHAREHOLDE R'

SFUNDS

T9e ratio indicates t9e measure of relati;e :ro:ortion of de=t and e@uity> 9ic9 9el:s to finance

t9e asset of a firm Ataulla9> i 2003#



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- PROPRIETARY RATIO

PROPRIETO R' SFUND

TOTALASSETS ×100

(ts o=ecti;e is to :ro;ide a rou


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3 FIXED ASSETS TO EQUITY RATIO

FIXEDASSETS

SHAREHOLDE R' SFUNDS

(t si 201,#



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4 TIMES INTEREST EARNED RATIO

Earnings !"#r! In$!r!s$ ∧Ta%

In$!r!s$ E%&!ns! ×100

(t 9el:s in ascertainin< t9e a=ility of t9e com:any to fulfil t9e interest :ayment t9rou


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, T"$O#E$/ACTI#ITY $ATIO

INVENTORY TURNOVER RATIO (ITR)

COSTOFGOODSSOLD

AVERAGEINVENTORY

T9e ratio 9el:s in measurin< 9o many times t9e com:any sells it total a;era 2011#



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- RECEIVABLES/DEBTORS TURNOVER RATIO (DTR).

NETCREDITSALES

AVERAGEACCOUNTSRECEIVABLE

T9e DT* 9el:s in de:ictin< t9e s:eed =y 9ic9 t9e de=tors are con;erted into cas9 in a year

Mic9ael and &9ristine> 1!#



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3 AVERAGE COLLECTION PERIOD

365 DAYS

DEBTORSTURNOVERRATIO

T9e ratio indicates 9o ra:idly or 9o sloly t9e money is collected from t9e de=torselfert>

2004#



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4 ACCOUNT PAYABLE TURNOVER PERIOD

NETCREDITPURCHASES

AVERAGECREDITORS

T9e ratio si


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" AVERAGE PAYMENT PERIOD

365 DAYS

CREDITORSTURNOVERRATIO

T9e ratio states t9e a;era


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4 ,$OFITABILITY $ATIO

GROSS PROFIT RATIO

GROSSPROFIT

NETSALES

×100

T9e ratio indicates t9e :ercenta


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- NET PROFIT RATIO

NETPROFITBEFORETAX

NETSALES ×100

T9e ratio 9el:s in determinin< t9e o;erall :rofita=ility of a com:any# (t also measures 9o muc9

eac9 amount earned =y t9e com:any is translated into :rofit &onrad> 2003#



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3 OPERATING PROFIT RATIO

OPERATING PROFIT

NET SALES ×100

T9e ratio 9el:s in analyin< t9e amount of o:eratin< cost dran on t9e sale of


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4 RETURN ON EQUITY/SHAREHOLDER’S INVESTMENT

NET INCOME

SHAREHOLDERS EQUITY ×100

T9e o=ecti;e of t9e ratio is to analye 9o effecti;ely t9e funds raised from t9e s9are9older7s

e@uity 8 :reference 9as =een utilied Mainul> 2012#



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4 MA$+ET ,OSITIO AALYSIS

i ,$ICE EA$I8 $ATIO

MARKETPRICEPERSHARE

EARNINGPERSHARE

T9e ratio 9el:s in com:utin< t9e amount t9e s9are9olders eG:ect from t9e earnin


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ii DI#IDED ,AYO"T $ATIO

DIVIDENDPERSHARE

EARNINGPERSHARE

T9is ratio de:icts t9e :ro:ortion of $arnin


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iii DI#IDED YIELD $ATIO

DIVIDENDPERSHARE

MARKETPRICEPERSHARE × 100

T9e ratio si


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5 COM,A$ATI#E MA$+ET ,OSITIO AALYSIS

T9us> On an a;era&oca &ola &o# eG9i=its 13#41 6rice to $arnin


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" COM,A$ISO OF COCA COLA CO2 * ,E,SI CO2

i O T9E BASIS OF BALACE S9EET

ASSETS in 201,>&oca &ola &o#7s current asset ma?e u: ,4#3"C of its total assets> 9ereas t9e

s9ort term lia=ilities ma?e u: ,0#!!C of its total lia=ilities and s9are9olders7 e@uity# (n

com:arison> 6e:si &o#7s current assets ma?e u: 2!#"5C of its total assets and t9e s9ort term

lia=ilities ma?e u: 2,#02C of its total lia=ilities and s9are9olders7 e@uity# T9is s9os t9at &oca

&ola 9as enou415 million of net re;enue> 9ereas &oca &ola &o#7s net

o:eratin< re;enue is 4">!54 million> =ut e;en after 9i coca cola co# ma?es

more o:eratin< income 9ic9 states t9at t9e cost incurred for sales of &oca &ola &o# is muc9

loer t9an 6e:si &o# &onstitutes 43C cost of sales to net re;enue> 9ereas &oca &ola &o# 9as,#,C#

,$OFIT(n 201,> on an a;era 6e:si &o# itnessed 10#3C of net :rofit from t9e sale of its

:roducts> on t9e ot9er 9and &oca &ola &o# itnessed 22#2,C of net :rofit> 9ic9 states t9at t9e



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amount eG:enditure coca cola &o# incurs from manufacturin< till t9e :oint of sale of t9e :roduct>

is muc9 loer t9an 6e:si &o#

3 LIMITATIOS

T9ere are alays limitations to e;ery study> t9is re:ort 9as t9e folloin< limitations

Firstly> if t9e eGistin< accountin< data is incorrect t9e ratios dran from it ill also =e incorrect#

Secondly> ratio analysis :ro;ides insufficient information for decision ma?in< :ur:ose# (t only


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As t9e =e;era estle> raft> etc#> it =ecomes ;ery im:ortant

to eG:and t9e mar?et =y ta::in< ne mar?ets and continuously inno;ate and stren


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11 $EFE$ECE

1# Ataulla9> A#> i A# and Ti::ett> M# 2003# T9e Distri=utional 6ro:erties of t9e De=t

to $@uity *atio Some (m:lications for $m:irical *esearc9# A=acus> 4,2> :#111-1,5#

2# Baruc9 .e;> 134# Financial statement analysis a ne a::roac9# 6u=lis9ed =y 6rentice-

all#

,# Brad> M#B# and Eo9n> D#.#> 1"# Detectin< a=normal o:eratin< :erformance T9e

em:irical :oer and s:ecification of test statistics# Eournal of Financial $conomics>

41,> :#,5-,#

4# &oca &ola &om:any> 200# Form 10 Annual *e:ort# JonlineK A;aila=le at #coca-

colacom:any#com JAccessed 23 o;em=er 2014K5# &oca &ola &om:any> 2010# Form 10 Annual *e:ort#JonlineK A;aila=le at #coca-

colacom:any#com JAccessed 23 o;em=er 2014K

"# &oca &ola &om:any> 2011# Form 10 Annual *e:ort#JonlineK A;aila=le at #coca-

colacom:any#com JAccessed 23 o;em=er 2014K3# &oca &ola &om:any> 2012# Form 10 Annual *e:ort# JonlineK A;aila=le at #coca-

colacom:any#comJAccessed 23 o;em=er 2014K

!# &oca &ola &om:any> 201,# Form 10 Annual *e:ort# JonlineK A;aila=le at #coca-

colacom:any#comJAccessed 23 o;em=er 2014K

# &orey>S#>et al#> 201,# Analyin< li@uidity usin< t9e cas9 con;ersion cycle met9od

incor:oratin< time com:lements static measures suc9 as t9e more common current ratio#

Eournal of Accountancy# 2155> :#44#

10# Dou 13# &or:orate Financial Mana 3t9 ed# 6u=lis9ed =y &en 6aul Munterand Eulia rant> 2004# Financial Statement Analysis A

lo=al 6ers:ecti;e# 6u=lis9ed =y 6earson/6rentice all#

14# elfert> 2004#Tec9ni@ues Of Financial Analysis A Mode# 6u=lis9ed =y Tata Mcra-

ill $ducation#

15# Eames B# Steart> 2014# Business Day- For &o?e> &9allen


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13# Eo9n> A#> 2003# T9e ;alue of cor:orate financial measures in monitorin< donturn and

mana 12> :#25,#

1!# Mo9 #B#> Maryamm> S# and Me9di> *#> 201,# T9e relations9i: =eteen total asset

turno;er and :roducti;ity indicators of com:anies listed in Te9ran Stoc? $Gc9an


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12 AE!"$E

i BALACE S9EET * ICOME STATEMET OF COCA COLA CO2



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ii BALACE S9EET * ICOME STATEMET OF ,E,SI CO2



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Sample - Fsa Assignment- Mod000986

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