Problem 9.

A.
Coca-Cola
INCOME STATEMENT Year 3 Estimation Year 2 Year 1
Net sales 20,297 20,092 19,889
Cost of goods sales 6,106 6,044 6,204
Gross profit 14,191 14,048 13,685
Selling general & administrative expense 7,972 7,893 9,221
Depreciation & amortization expense 863 803 773
Interest expense -66 -308 292
Income tbefore tax 5,422 5,660 3,399
Income tax expense 1,620 2,692 1,222
Net income 3,802 3,969 2,177
Outstanding shares 3,491 3,491 3,481

RATIOS
Sales growth 1.02% 1.02%
Gross profit margin 69.92% 69.92%
Selling general & administrative expense 39.28% 39.28%
Depreciation (depn exp/pr yr PPE gross) 12.14% 12.14%
INT (int/pr yr LTD) -5.45% -5.45%
Tax (Inc Tax/Pre-tax inc) 29.88% 29.88%

B.
Based on our initial projection of Coca-Cola's balance sheet,it appears that the company will require approximately $1.5billion
 Statement of Cash Flows Year 3 Estimation
Net income 3,802
Depreciation 863
Accounts receiveable -19
Inventories -11
Accounts payable 38
Income taxes -36
Net cash flow from operation 4,636

CAPEX -1,200
Net cash flow from investing activities -1,200

Long term debt 0

Additional paid in capital 0
Dividens -4,783
Net cash flow from financing activities -4,783

Net change incash -1,347

Beginning cash 1,934
Ending cash 587

uire approximately $1.5billion of external financing in Year 3. This amount will yield a cash balance of approximately $2 billion, consistent w
ximately $2 billion, consistent with prior years.