Question

Coca-Cola’s Financial Statements Cola Company The Coca- You are preparing to visit a friend who now lives in Atlanta. Your friend is very interested in. Your friend is not a business major and has asked for your help to learn more about Coca-Cola. Obtain the Coca-Cola Company’s 2013 annual report either using the “Investor Relations” portion of its web site (do a Web search for Coca-Cola investor relations) or go to http:// www.sec.gov and click “Search for company filings” under “Filings and Forms (EDGAR).”

Read carefully through Coca-Cola’s financial statements. Prepare a brief written report for your friend that (in your opinion) provides two interesting and important pieces of information about Coca-Cola from the

• Balance Sheet
• Income Statement
• Statement of Cash Flows

Answer 1

SOLUTION

Balance Sheet:

· Enormous holdings of cash and cash equivalents, $10,414 million.

· Largest asset—property, plant, and equipment, $14,967 million.

· Significant holdings of equity method investments, $10,393 million, goodwill, $12,312 million, and bottlers' franchise rights with indefinite lives, $7,415 million.

· Total assets are $90,055 million.

· Financial debt—current ($16,901 million in loans and notes payable plus $1,024 million in current maturities of long-term debt) and long-term ($19,154 million).

· Financed with more debt than equity—total liabilities amount to $56,615 million and total equity amounts to $33,440 million.

· The majority of equity arises from retained (reinvested) earnings.

Income Statement:

· Net operating revenues of $46,854 million.

· Big drop in revenues—from $48,017 million in 2012 to $46,854 million in 2013.

· Equity income fell from $819 million in 2012 to $602 million in 2013.

· Big drop in net income: $8,584 million in 2013, down considerably from 2012 net income of $9,019 million.

Statement of Cash Flows:

· Operating cash flows are very healthy: $10,542 million, most of which comes from net income plus the depreciation and amortization addback.

· Investing cash flows: ($4,214 million), primarily for additions to property, plant, and equipment and (net) purchases of other investments.

· Financing cash flows: ($3,745 million), primarily for dividends and repurchases of common stock, net of roughly $4.7 billion in cash flows from net issuances of debt.

· Cash balance increased by $1,972 million in 2013, from $8,442 million to $10,414 million.