Financial statements and reporting

Coca-Cola
Coca-Cola aims to produce clear financial statements that give a valuable insight into the company's
strategy and performance.
The Coca-Cola Company is the world’s largest beverage company in the world and is the leading
producer and marketer of soft drinks. The company markets four of the world’s five drinks brands: Coca-
Cola, Diet Coke, Fanta and Sprite. Coca-Cola is the world’s strongest system with over $ 105b system
revenue, more than $ 30 million in operating cash flow (thecoca-colacompany.com, 2018). The company
employs around 70,000 people.
Coca-Cola’s Head Office accounts team collects the information required to create these statements
from the company's accountants and financial teams around the world. The legal responsibility for
producing financial statements that present an accurate picture of the company's performance .
The three main Financial Statements are:
1. Establishing financial goals:
- Net Sales Value (NSV) growth of between 3% and 5%. NSV growth refers to the growth
in sales of the company - for example by selling more soft drinks, diet or Fanta to
supermarkets, which in turn sell to consumers.
- Operating margin growth of between 50 and 75 basis points per year for example by
buying ingredients and packaging materials as efficiently as possible.
- Free cash flow of £1.5 billion over the four-year period. Free cash flow reflects how much
cash is generated within the business.
2. Profit and Loss Account:
- The top line shows that the sales revenue from products such as Coca-Cola, Diet Cherry
Coke, Jaz Cola, Fanta, Dasani came to £9,738 million.
- Costs were involved in making these products. The production costs added up to £4,668
million.
- Coca-Cola owns a share of some other companies - raising additional income.
- Coca-Cola has borrowed money to buy new companies. It must pay interest payments on
these loans.
- Coca-Cola must pay Corporation Tax to the government (£185 million).This is a tax on
profits.
3. Cash flow statement:
In 2018, Coca-Cola achieved free cash flow generation of £31,965 million. Cash flow is
very important to the company because cash enables the business to pay its bills, pay
dividends to its shareholders and, in addition, to make acquisitions.
In recent times Coca-Cola has focused on acquiring new businesses, increasing sales and
innovation, cutting costs, and integrating existing businesses to achieve its aims of:
Higher sales growth
Improved operating profit margins
Higher levels of free cash flow.
Through efficient financial management Coca-Cola is able to continually invest in
making sure that customers are supplied with the brands that they enjoy.
Conclusion:
Coca-Cola wants to communicate a true and fair picture of the financial state of the company to its
shareowners and external analysts.
The company values transparency and honesty and aims to reflect this is all its communications, both
internally and externally.
There's something special about The Coca-Cola Company always urge me to be a part of it. There's a
sense of pride that comes from building brands people love. Coca-Cola is on a new journey of growth,
building on our most formidable assets: brands, financial strength, global reach, distribution system and
the strong commitment of management and employees worldwide. Yes, absolutely yes, I’m going to be a
part of Coca-Cola.