COCA COLA COMPANY

COMPANY PROFILE
The Coca-Cola Company, American corporation founded in 1892 and today engaged primarily in the manufacture and sale of
syrup and concentrate for Coca-Cola, a sweetened carbonated beverage that is a cultural institution in the United States and
a global symbol of American tastes. The company also produces and sells other soft drinks and citrus beverages. With more
than 2,800 products available in more than 200 countries, Coca-Cola is the largest beverage manufacturer and distributor in
the world and one of the largest corporations in the United States. Headquarters are in Atlanta, Georgia.
The Coca-Cola Company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The
bottlers, who hold exclusive territory contracts with the company, produce the finished product in cans and bottles from the
concentrate, in combination with filtered water and sweeteners. A typical 12-US-fluid-ounce (350 ml) can contains 38 grams
(1.3 oz) of sugar (usually in the form of high fructose corn syrup). The bottlers then sell, distribute, and merchandise Coca-
Cola to retail stores, restaurants, and vending machines throughout the world. The Coca-Cola Company also sells
concentrate for soda fountains of major restaurants and foodservice distributors.
PURPOSE
Refresh the world. Make a difference.
VISION
To craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a
more sustainable business and better shared future that makes a difference in people’s lives, communities and our planet.

PRODUCT VARIANTS

Carbonated: Water:

o Coca-Cola o Viva! (mineral ice water)

o Coca-Cola Light o Wilkins Distilled (distilled water)
o Coca-Cola Zero o Wilkins Pure (purified water)
o Coca-Cola thêm Cà Phê (Only at 7-Eleven Philippines o Wilkins Delight (water-based drink with real fruit juice)
Stores) o Wilkins Sparkling (plain, flavored)
Sports:
Sprite
o Powerade
o Sprite Zero
o Royal Tru-Orange o Juice:
o Royal Tru-Grape o Minute Maid Pulpy
o Royal Tru-Lemon o Minute Maid Fresh
o Sparkle o Eight O’Clock (instant juice drink)
o Sarsi o Nutriboost
o Pop Cola
o Schweppes (soda water, ginger ale and tonic water)
o Thunder Super Soda
COMPANY’S MANAGEMENT
CASH MANAGEMENT
Cash management is the efficient collection, disbursement, and investment of cash in an organization while maintaining the
company’s liquidity. In other words, it is the way in which a particular organization manages its financial operations such as
investing cash in different short-term projects, collection of revenues, payment of expenses, and liabilities while ensuring it has
sufficient cash available for future use.
In the real world, organizations have strict cash management controls to monitor its inflows and outflows while retaining a
sufficient amount in order to take advantage of attractive investments or handle unforeseen liabilities. Efficient management of
cash prevents loss of money due to theft or error in processing transactions. Numerous best practices are adopted to enhance
management of company’s funds.

Cash flow statement item Description The company

Amount of cash inflow (outflow) from

operating activities, excluding discontinued
operations. Operating activity cash flows Coca-Cola Co.’s net cash provided by
include transactions, adjustments, and
operating activities increased from 2017
changes in value not defined as investing or
Net cash provided by operating financing activities. to 2018 and from 2018 to 2019.
activities
Amount of cash inflow (outflow) of investing
activities, excluding discontinued Coca-Cola Co.’s net cash (used in)
operations. Investing activity cash flows provided by investing activities
include making and collecting loans and
increased from 2017 to 2018 but then
acquiring and disposing of debt or equity
instruments and property, plant, and decreased significantly from 2018 to
Net cash (used in) provided by equipment and other productive assets. 2019.
investing activities

Amount of cash inflow (outflow) of financing

Net cash used in financing activities
activities, excluding discontinued
operations. Financing activity cash flows
include obtaining resources from owners Coca-Cola Co.’s net cash used in
and providing them with a return on, and a
financing activities decreased from
return of, their investment; borrowing money
and repaying amounts borrowed, or settling 2017 to 2018 but then slightly increased
the obligation; and obtaining and paying for from 2018 to 2019.
other resources obtained from creditors on
long-term credit.

Coca Cola's Budgeting

Zero-base Budgeting:
The company cut down their expenses and cut down jobs to maintain their position in the markets. In this regard, the company
uses zeros base budgeting. Zero based budgeting shows that review of expenses, again and again, happens because no any
extra expense takes spending further. At the end of each financial quarter, expenses should be equals to income that means
utilize where actually we need, like rent, supplies, and funds for emergency or retirement savings. It is also very popular cost-
cutting measure from last many years. Because many companies going to use this method and save their extra expenses.
Coca-cola uses this technique to save its money through cutting thousand of extra jobs, selling corporate jets, removing
inefficient factories and even appoint worker and before making copies that have to take permission. Zero-base budgeting
really focuses on reviewing your expenses so you can check where your money is gone or spend, and budget items can be
managed properly. Always focus the spending of every amount and its basic utilization for the benefit of the company.

Budgeting Process and Procedures for coca cola:

Preparation techniques: in accordance with the 10k annual reports of coca cola present that both financial and nonfinancial
budgeting is basic purpose of the company. In such a way that company set the budget according to their requirement and
desire and then selects objectives, so the main purpose of making budgets to achieve these objectives in last.
Uses of evaluation: for both evaluations, internal and external, company prepares a budget. A detailed analysis of brands
performance shown in annual reports because they want to present what is their actual production as compared to budgeted
they set at the start of the year.
Coca-cola management accounting information system:
Management accounting is based on all accounting data collected from companies for making an internal decision and
manage all expenses and sales. Coca-cola uses cashbook ledger having two sections; one section is used to save all records
of disbursements and payments and the second section is utilized to record all cash information and receipts. All record must
be kept on a daily basis.
Coca-cola Cost Accounting Approach:
Costing system of products presents that all costs are related to departments or processes and costs assign to products
according to the utilization of process. In short, the company considers each product cost depend on activities which include in
the production process. Main three activities are shown the production process features like concentrate and syrup blending,
packaging and manufacturing. So it is clearly showed that company uses activity-based costing. The company also makes a
budget of its costs according to activities related to process. In simple, higher activities will be the result of the higher budget
of coca cola production.
Coca-cola Capital Decision-making Process:
The capital decision is very compulsory because as we consider all brands, a large number of investment involve which make
this decision riskier. Payback period is very important to calculate because of investment returns. With this, internal rate of
return and net present value also determine in case of investment decision process to clearly show the actual return on
investments and also verify how much investment needs to get expected results. After budgeting and costing method, coca
cola use WACC weighted average cost of capital to run the process of capital decision. In such type of capital decisions,
according to the cost of capital of every related activity and related capital are weighted as per requirement for the intention of
investment. In this regard, company checks all outcomes and sources of capital that may cause to increase investment if for
equity, beta and return rate both increased.
Coca-cola Capital Acquisition and Structure:
For capital acquisition and structure, coca cola uses equity-based capital. This type of capital acquires through available in the
market for investing a point of view and then investment interest in the form of dividend payments to investors. In other words,
it’s a shareholder bases structure where that shareholder becomes chairman who has the highest investment in the company.
Decision-making criteria for acquiring a new investment in coca cola:
Two main points we have to consider or analyze whether or not we have to take the decision on investment in the company:
 Expected returns: because of higher return on any investment, the chances of adopting that investment becomes higher. As
we know the criteria that only those investments selected which provide positive results of returning in future.
Impact on brand image: coca cola is very much concerned about its brand image and always make decisions for selecting any
investment who reflect no nay negative impact on its brand image. That’s why the company didn’t rely on government systems
because of corrupt reputation.
Coca-cola Sale Growth:
The sale growth is going to increase. It is only because of reducing any type of extra costs from budgeting. In this case, the
company can produce more units for sale, which automatically increase the profit of the company. Its current growth rate in
the economy in more than 35% which shows that coca cola is competitive with the demand of markets.
SHARES
Coca Cola’s principal shareholders are Kar-Tess Holding (a Luxembourg company) holding approximately 22.96 percent of
our outstanding ordinary shares, and The Coca-Cola Company, which indirectly holds approximately 22.89 percent of our
outstanding ordinary shares.

 23% - The Coca-Cola Company

 23% - Kar-Tess
 54% - Free float

RISK MANAGEMENT
Foreign exchange and commodity exposure
It arise from changes in exchange rates and commodity prices.Currency devaluation, in combination with capital controls,
restricts movement of funds and increases the risk of asset impairment.
Potential Impact:

 Financial loss
 Increased cost base
 Asset impairment
 Limitations on cash repatriation
Key mitigations:

 Treasury policy requires the hedging of 25% to 80% of rolling 12-month forecasted transactional foreign currency
exposure

 Hedging beyond 12 months may occur in exceptional cases subject to approval of Group CFO
 Treasury policy requires the hedging of rolling three-year commodity exposures; different policy limits apply for each
hedge-able commodity
 Derivative financial instruments are used, where available, to reduce net exposure to currency and commodity price
fluctuations.

Ethics and Compliance

We operate in some complex markets with high levels of perceived corruption. As a result, we are exposed to an increased
risk of fraud against the Company as well as to the risk of Anti-bribery and Corruption (ABAC) fines or sanctions if our
employees or the third parties we engage to deal with government fail to comply with ABAC requirements.
Potential Impact:

 Damage to our corporate reputation

  Significant financial penalties
 Management time diverted to resolving legal issues
 May suffer economic loss because of fraud and reputational damages, fines and penalties, in the event of non-
compliance with ABAC regulations by our employees or by third parties representing us with government
Key mitigations:

 Code of Business Conduct (COBC), ABAC and commercial compliance training and awareness campaigns for our
entire workforce
 All third parties that we engage to deal with government on our behalf are subject to ABAC due diligence, and must
agree and comply with our Supplier Guiding Principles
 Risk-based internal control framework and assurance programme with local management accountability
 Speak Up Hotline
Discriminatory Taxes
Regulations on consumer health, government misconceptions relating to formulations and the risk of being a target for
governments and interest groups to introduce discriminatory taxation (e.g. sugar) and packaging waste recovery taxation.
Potential Impact:

 Reduction in profitability
Key mitigations:

 Proactively working with governments and regulatory authorities to ensure that the facts relating to formulations are
clearly understood and that our products are not singled out unfairly
 Retain our ‘seat at the table’ by demonstrating that we are a responsible and sustainable business
 Engaging with various stakeholder groups including NGOs and the communities in which we operate to deliver our
2025 sustainability commitment

LIQUIDITY MAINTENANCE

Liquidity ratio Description The company

Current ratio A liquidity ratio calculated as current Coca-Cola Co.’s current ratio
assets divided by current liabilities. deteriorated from 2017 to 2018 and from
2018 to 2019.

Quick ratio A liquidity ratio calculated as (cash plus Coca-Cola Co.’s quick ratio deteriorated
short-term marketable investments plus from 2017 to 2018 and from 2018 to
receivables) divided by current liabilities. 2019.

Cash ratio A liquidity ratio calculated as (cash plus Coca-Cola Co.’s cash ratio deteriorated
short-term marketable investments) from 2017 to 2018 and from 2018 to
divided by current liabilities. 2019

As to improve the Liquidity ratios:

1. Switch from Short-term debt to Long-term debt: Use long-term debt to finance your business instead of short-term
debt. Long-term debt gives the benefit of smaller monthly installments and lower interest rates. The principal is also
 not due for repayment immediately. Removal of short-term debt from your balance sheet allows you to have better
Quick and Current ratios, and allows y to save some of your liquidity in the near term and put it to better use.
2. Get Rid of Useless/ obsolete Assets: wasting resources and not earning anything. It is time to get rid of them. Try and
get a good price for it. However, there are some assets that are not worth anything in the market, and you would be
better off just disposing of them for whatever they are worth. After the sale, your cash balances would go up, you do
not have to account for depreciation, and the ratios would subsequently improve.
3. Control Overhead Expenses: Examine how much you are spending on rent, labor, professional fees, marketing and
so on. You will be surprised how much of these are unnecessary. Cut back on them and your short-term expenses
automatically go down. The cash you are able to retain in the business also increases. Soon, your Current and Quick
ratios start looking mighty impressive.
Coca-Cola invested its surplus liquidity mainly in money market funds (MMFs) with the investment objective of preserving the
value of its principal and ensuring access to liquidity.

Stress in the MMF market and the emergence of negative interest rates for EUR balances effectively eliminated MMFs as an
investment tool for Coca-Cola . It sought alternative investment options for surplus liquidity. In the second quarter of 2015 the
need for an alternative solution became of even greater importance, due to Coca-Cola HBC accumulating liquidity in advance of
an impending bond maturity and recognizing that it needed a specific investment solution for over €100m.

To find a solution, the company entered into discussions with its top tier banks looking for a guaranteed return of principal,
access to liquidity at short notice and a positive yield. Citi were able to propose an effective and sustainable solution.

In short, the solution works by automatically pooling Coca-Cola EUR liquidity in a multi-currency pool and then notionally
investing the balance in a USD high-yield deposit account that tracks longer-term market indices. The investment account that
sits outside the pool is funded or de-funded daily to ensure that it reflects the EUR balance after any FX fluctuation.

Coca-Cola further benefited from the solution because interest rates divergence driven by Central Bank actions generated a
favourable environment for Coca-Cola to earn a net positive average weighted return of eight basis points or 0.08% in spite of
prevailing market rates at -0.28%.

This solution overcomes these challenges to meet all of Coca-Cola ’s investment objectives. Key benefits

1. Principle amount not subject to FX risk.

2. Positive accounting treatment satisfied.

3. Positive average weighted return of eight basis points in spite of prevailing negative market rates

OPTIMUM UTILIZATION OF RESOURCES

BOTTLE COLLECTIONS
The company adopts different methods around the world to collect bottles. In some countries it uses a deposit return scheme
that enables consumers to return bottles in exchange for incentives - such as cash, vouchers or a points-scheme. It also
works with private firms that employ collection agents to retrieve used bottles.
A recycled PET (polyethylene terephthalate) bottle has a much lower carbon footprint than an aluminum can or a returned
glass bottle.
Coca-Cola is taking steps to be at the forefront of the enhanced recycling movement, which can potentially turn packages
such as colored PET bottles that may have been excluded from certain recycling streams into brand-new PET bottles. The
Coca-Cola system recently announced two investments to speed the development and deployment of breakthrough enhanced
recycling technologies that will convert recycled plastic into food-grade PET for use in the company’s beverage bottles. Unlike
mechanical recycling, enhanced recycling allows recovery and reuse of PET plastic without material degradation.
Coca-Cola beat Wall Street estimates with quarterly revenue of $9.51 billion last month, prompting the company to give an
upbeat forecast for 2019.

FUNDING MANAGEMENT
Bottling Investments Group
In January 2006, our company owned bottling operations were brought together to form the Bottling Investments Group, or
BIG. BIG was created to ensure those bottling operations receive the appropriate investments and expertise to ensure their
long term success. By strategically investing in select bottling operations, temporarily taking them under Coca-Cola
ownership, and utilizing the leadership and resources of The Coca-Cola Company, BIG can drive long-term growth in critical
markets and address major structural or investment challenges.
AVAILABILITY OF FUNDS
Internal source of finance
Coca Cola's one of the main source of funds and typically generates net operating revenues by selling concentrates and
syrups to authorized bottling partners. The company also generates revenue from the sale of finished beverages to retailers,
distributors, and wholesalers.
The revenue earned minus all expenditure incurred , gives it surplus. This amount is retained by the business and used to
finance its expansion or purchase of new assets .
External sources of Finance
Mutual Funds
-Vanguard Total Stock Market Index Fund (VTSMX)
The largest mutual fund holder, the Vanguard Total Stock Market Index Fund ("VTSMX"), owns 95.9 million shares of Coca-
Cola as of June 29, 2018. The fund's investment in Coca-Cola accounts for 2.25% of total shares held which represents
0.60% of VTSMX's total asset. This mutual fund is designed to give broad exposure to the total US. stock market by including
small-cap, mid-cap and large-cap growth and value stocks.
-As of June 30, 2018, VTSMX has $701.2 billion in AUM, an expense ratio of 0.14%, a turnover ratio of 3%, and requires a
minimum investment of $3,000. The funds has a five-year annualized return of 12.60%.
Vanguard 500 Index Fund Investor Shares (VFINX)
-As of June 29, 2018, the Vanguard 500 Index Fund ("VFINX") owns 69.3 million shares of Coca-Cola, making it the second-
largest mutual fund holder. VFINX owns 1.63% of total shares held within Coca-Cola. This represents 0.73% of the funds
total asset. VFINX is invested in 509 stocks covering a diversified spectrum of the largest US. companies, mirroring the S&P
500 Index.

DEPLOYMENT OF FUNDS
. Coca-Cola released its 2018 annual report in Feb. 2019. The beverage distributor and manufacturer reported net operating
revenues of nearly $31.9 billion for the year 2018, compared to $35.4 billion over the same period last year. As of July 9,
2019, the company's market capitalization is just under $224 billion.
Expenses
 o Coca-Cola’s total expenses have decreased from $36.9 billion in 2015 to $25.4 billion in 2018, which marks a
reduction of $11.5 billion in three years.
o Most of this decrease was driven by a reduction in cost of goods sold and selling, general, and administrative cost
(SG&A).
o the metric has steadily declined from $16.4 billion in 2015 to $10.3 billion in 2018, led by divestitures, reduction in
expenses related to bottling business, and benefits from the productivity and reinvestment initiatives.
o KO started a productivity program to achieve additional efficiencies in both supply chain and marketing expenditures,
as well as to transition to a new, more agile operating model to enable growth.
o However, productivity gains in the form of lower selling and distribution cost, is still likely to help KO achieve a
cumulative decrease of $4.9 billion in SG&A cost between 2015-2020.

ENVIRONMETAL ISSUES SOLUTION

When bottlers face financial problems, it creates logistical and image issues for Coca-Cola. To solve this problem, Coca-Cola
created the Bottling Investments Group (BIG).
The goal of BIG is to identify and help bottling franchises that need financial and institutional support. BIG targets struggling
franchises and provides them with the resources they need to remain a part of the Coca-Cola franchise network. Coca-Cola
then sends in teams of experts and resources to drive growth and return the franchise to profitability. Once profitability and
stability in the local market is achieved, the company finds a qualified bottler to assume operations.
The BIG program operates in dozens of countries and is responsible for managing over 25% of the total system bottling
volume. Combined, the BIG program is the largest global bottler in the company. In 2004, bottlers in the BIG program took in
$11 billion in revenue. In Q3 2018, Coca-Cola completed refranchising company-owned bottling operations in North America,
which cost $275 million.
Coca-Cola is taking steps to be at the forefront of the enhanced recycling movement, which can potentially turn packages
such as colored PET bottles that may have been excluded from certain recycling streams into brand-new PET bottles
LOAN/ LENDING
The company is extending a loan to Ioniqa Technologies to support the development of its technology for PET upcycling,
which uses the process of depolymerization to recycle plastics of different colors, qualities and conditions into purified building
blocks which can then be made into clear, high-quality PET, bringing the vision of a circular economy one step closer to
reality. Ioniqa is building its first PET plastic upcycling factory in the Netherlands.
The investments are part of Coke’s multi-faceted approach to help create a circular plastics economy. The company has also
pioneered and continues .
PROCUREMENT
The Coca-Cola system’s procurement collaboration has established a framework with Loop Industries, Inc., for authorized
bottlers to purchase 100% recycled Loop PET. Coca-Cola European Partners is the first bottler to enter into a multi-year
supply agreement with Loop for use in its packaging across Western Europe by 2020. This framework agreement will allow
the Coca-Cola system to accelerate the increased use of recycled content in its plastic bottles.
 TREASURY MANAGEMENT
MFM224
BSBA-FM1A

SUBMITTED BY :

SORRY ANTOK NA KO PAGLAGYAN NALANG NG

NAMESSS ..

SUBMITTED TO :
MS. VICTORIA L. BAGTAS