The revenue trend for ten years shows that the total revenue of the company Coca-Cola is declining as compared to the last five years. The company has shown that the decline in revenues in 2016 and 2015 can be attributed to the following factors: 1) Price, geographic and product mix caused favorable 3% impact in 2016 revenue, favorable 2% of 2015 revenue 2) Foreign currency fluctuations have an unfavorable impact of 3% on 2016 revenue and 7% of 2015 revenue 4) divestitures and acquisitions 5) volume of sales
The total return comparison assumes that the dividends are reinvested on a daily basis. The Peer Group Index is constructed by the company itself, which includes companies from Down Jones Food and Beverage Group, and from the Dow Jones Tobacco Group of companies. The comparison shows that the company Coca-Cola is performing consistently, but below the indexes regarding the total return. The growth of the total returns is positive but slightly slower than those of the two indexes
The activity ratios show the performance and efficiency of a company regarding its operations. The Inventory Turnover of 5 to 6 times for Coca-Cola shows that it has sold its inventory five times in a year. It is a good indicator of the efficiency. The ratio is getting better year by year showing its efficiency. It can be confirmed by looking at the Days Inventory as well. This measure shows how many days are needed by the Coca-Cola to convert its inventory into sales. The decreasing number of days confirms the improved efficiency.
The operating segments which are giving the highest revenue not necessarily are the most profit generating segments as well. It is depicted in the figures, where the highest revenue generating segment bottling investments are generating very low income as compared to other segments. It is because of the reason that the segments like “Bottling investments” and “Corporate” are consuming a larger amount of operating costs, lowering the income generated by it. The loss in this segment is attributed to the operating charges increments, acquisitions, and divestitures. The highest income generating segment for Coca-cola is the segment of “Europe, Middle East, and Africa.”
The Capital Expenditures in the segments show how much Capital is being invested in the segments as a percentage of the total capital invested. The figures show that the “Bottling Investments,” North America and Corporate segments have consumed more than 80% of all the expenditures made. The ROIC shows the degree to which these expenditures have been successfully used to generate returns.
The ROIC shows the degree to which these expenditures have been successfully used to generate returns. The ROIC is computed as Operating income divided by the investment plus the capital expenditures amount. The figures show that the highest ROIC generating segment is that of the Asia Pacific and North America. The lowest return generated regarding the investments made and capital expensed is of Bottling Investments and Corporate segments.
The Coca-Cola Company manufactures markets and sells; 1) Beverage concentrates, these are syrups, including fountain syrups and beverage bases, and 2) still beverages and finished sparkling. The business of Coca-Cola is more generated from the finished product operations as shown in the graph. The graph shows the percentage of net operating revenues generated by each product segment. The company has been trying to raise the revenue generated by the Beverage concentrates operations and has been successful as well to some extent.
The major portion of the total expense is recorded as of Selling, General and Admin expense and Cost of Goods Sold. The COGS is 45% of the total revenue, and Selling & Admin expense is 42%.
The Coca-Cola Company defines its operating segments in six segments. The percentage of operating revenue by each segment varies each year because of the varying growth rate of the operating revenues. The growth rate of the revenues is dependent on the sales volume, price, divestitures and acquisitions, geographic mix, currency fluctuations, and product mix. As per the figures, the major chunk of revenue is generated by the Bottling investments which have grown in three years as well. The second major contributing segment is of Europe, Middle East, and Africa Segment. The lowest revenue regarding total revenue is generated by corporate segment.
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