1. Assessment of changes in Coke’s financial statements between 1996-2010.
Coke has done well from 1996 to 2010 based on the financial statements reviewed. The company has grown revenue significantly while still controlling the cost of goods and assets. The overall costs of assets required for operating expenses has reduced as a percent of revenue. The financial health of the company is strong without a large reliance on long-term debt. As Coke has grown it has lost some efficiency in converting the assets into revenue, but has still managed to significantly increase income and retained earnings overall. Coke has established a good cash flow and has the ability to cover liabilities satisfactorily. In 1996 Coke did not have strong working capital. In 2010 Coke has developed a positive working capital and will not require short-term loans for daily business support. 2. Analysis of Common-size statements.
The total assets of Coke have risen over the years but the percent of current assets has reduced. The reduction in productive assets is a positive indication that fewer assets are required to generate increased revenues. The assets that have increased are related to other long term assets. These long term assets are possibly from acquisitions for intangible assets. There is a noticeable reduction in the receivables line and increase in cash. This indicates that the company is not extending as many dollars of purchases on credit or that the turnover for payment is faster from the customers.
The total liability has increased but is a less of a percent total than in 1996. The largest increase in liabilities is in long-term debt. This debt would be long-terms loans that Coke has taken for operating and expansion expenses. The accounts payable has decreased in both direct dollar amount and as a percent to total. The reduction in payable accounts