Introduction
Coca Cola is considered to be the world’s largest beverage company which offers consumers with a wide variety of refreshment beverages. The company was established in 1886 and has since continued to grow globally. Coca Cola offers over 500 sparkling and still brands of products and offers more than 3,800 choices of beverages worldwide (Coca-Colacompany.com, n.d.).
As one of the world’s most recognized and valuable brands, Coca Cola’s portfolio features over 20 billion dollar brands, 18 of those brands offer reduced to low (or no calorie) options. The company’s range of brands include, Diet Coke, Coca Cola Zero, Fanta, Dasani, Sprite, Powerade, vitaminwater, Del Valle, Gold Peak, and many more. The company provides those brands
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Income Statement Analysis
The two items analysed from the income statement were the items of Seasonality and Competition. Coca Cola states that their range of non-alcoholic ready to drink beverages are in some ways based on seasonal sales, in which the company sees their highest sales during the second and third calendar quarters.
The company has also stated that their beverages compete in a segment of the commercial beverage industry which tends to be highly competitive and consists of numerous companies that are similar to Coca Cola which compete in multiple geographic areas, or businesses that are mainly regional or local in operations, which means that Coca Cola is competing with on a global scale with both local, regional, and global companies for a share of overall market segmentation (Source: Page 9 from Cocal Cola Financial Statement for
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Gross profit margin is the indication of the percentage of revenue available within a company to cover operating expenses and other expenditures.
Based on analysis of Coco Cola’s net profit margin, the company’s percentages decreased from the year 2010 to 2011 but increased slightly from the year 2011 to 2012.
By analysing these two items and comparing them versus each other. Coca Cola’s decrease in gross profit margin has continually decreased throughout the years of 2010, 2011 and 2012 but the company’s net profit margin has faced a decrease during the year of 2010 – 2011 but began to increase between the years of 2011 and 2012. Meaning that while the company’s gross profit deteriorates, the company has managed to increase its net profit between the years of 2011 and 2012, as an investor this means that the company is continuously attempting to find new ways to increase net profit but in the process it continues to increase the expenses of selling its
The profit margin ratio demonstrates the ability of a company to increase the percentage of net income earned for every dollar of sales. For example: “this ratio shows the percentage of each sales dollar earned as net income”. (Harrison Jr., Horngen, Tomas, 2013) The Hershey Company was able to increase the profit margin ratio from 10 percent in 2012 to 11 percent in 2013. The increase in profit margin from the previous year 2012 shows that the performance of the company is increasing which means that revenue is increasing or expenses are decreasing. Furthermore, The Hershey Company is managing their performance efficiently and this is directly reflected in profit margin ratio.
Gross profit margin ratio will define an organizations financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold (Investopedia). The gross profit margin literally measures how much of every dollar of sales a company is able to actually keep (Answers, 2009).
Increasing gross margin is a positive parameter and shows the firm’s developing healthy. Gross margin is calculated by subtracting the cost of goods with the total sales revenue and then dividing it by the total
The gross profit margin appears to be more stable compared to the sales value and volumes that usually show mobility. However, a small change in gross profit margin indicates a substantial change in overall profits.
Here the profit margin is 30% while it was 28.70% in previous year. This means each dollar of sales revenue produced 30% in profits. There is not much difference compared to previous
Profitability ratios are used to assess a business’s ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For the majority of these ratios, a higher value relative to a competitor’s ratio or the same ratio from a previous period indicates that the company is doing well. The gross profit margin is a measurement of a company 's manufacturing and distribution efficiency during the production process. A company that boasts a higher gross profit margin than its competitors and industry is more efficient. KO has a gross profit margin of 63.86% compared to DPS’s 60.20%. I
Coca-Cola shows impressive performance in profitable growth. Coca-Cola’s current gross profit margin is very high, which is good because this indicates that the company has done an exceptional job in cutting costs. Coca-Cola is making considerable effort in making use of costs of goods sold. The management team at Coca-Cola is effectively using raw materials, labor, and manufacturing supplies. According to Muhtar Kent, it
Most notably, the increase from 2010 to 2011 was a staggering $9,774 in millions. Compared to the increase of $5,660 in millions from 2009 to 2010, there is a greater increase in merchandising costs that Costco should be concerned about (Thompson… 2014). These costs have been accrued through increasing gas costs for the transportation of goods and the increase in warehouses have increased preopening costs. Costco has so far been able to keep a net income possible with these increasing merchandising costs. Although if the net income is compared from 2009 to 2010 and 2010 to 2011, the amount of gain in the net income is decreasing; if left unchecked, this will become a problem. In 2009 to 2010, there was a gain of $217 million while in 2010 to 2011 there was only a gain of $157 million (Thompson… 2014). This is a smaller gain by $58 million. While it is still an increase in net income, the resulting costs of running their business have caused Costco to achieve a smaller profit margin.
The net profit margin helps investors understand how profitable a company is. This explains how much profit a company has per dollar of sales. ABC SDN. BHD. has a net profit margin of
The graph above is displaying the gross profit margin of Bank of America, Morgan Stanley, and JP Morgan Chase. All three corporations suffered declines in their gross profit margins from 2007 through 2009. This decrease is in relation to the economic downfall that occurred during that time period. These corporations suffered decreases in revenue. While their revenues decreased, their cost of goods sold continued to increase. They were not able to account for the increase in expenses until year 2010 when their revenues picked back up.
The Net Profit Margin in 2012 was 10.5% while in 2013 it was 66.6%. This increase in the Net Profit Margin can be attributed to the increase in net profits after taxes despite the fact that there was a slight decrease in revenues.
The analysis of the changes in the net margin shows that the profitability of Dunkin’ Brands has reduced over the three-year period. The net profit margin rises from 42.69% in 2013 to 45.26% in 2014 only to reduce to 39.41 in 2015. This shows that the company generates lower net incomes than it did in the previous years. This could be a result of an increase in costs and could account for the decrease in net income even as the revenue of the company
The Coca-Cola Company is a strong multinational company with a well-established trademark that has done well since 1886. The company has improved its marketing strategies to satisfy customers in a better way. Since its establishment, it has effectively differentiated itself by being considered as the largest manufacturer, marketer, and distributor of non-alcoholic syrups
Coca cola is one of the largest multinational soft drink companies in the world. It does its production in Cambodia, Ethiopia, Kenya, Mozambique, Namibia, Nepal and many other countries. The functional area is two type. They are internal and external.
The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special versions with lemon, lime, or coffee. In 2013, Coke products could be found in over 200 countries worldwide,