Grop work number 2

Elements of group:

Enizel Montrond

Ivanilde Rodrigues

Sandra Oliveira

Leonela Rocha

Marilene Varela

Indice:
1Brief introduction of the company

2 Definitions of terms

3 Description of each type of ratio

4 How should we interpret the numbers?

5 Comparison of prior fiscal year with current fiscal year

6 What decision direction is the company headed (doing good/bad)

Brief introduction of the company

The Coca-Cola Company is the largest non-alcoholic beverage company in the world. It owns
and is licensed to sell more than 500 brands of non-alcoholic beverages, which are grouped
into the following category clusters: carbonated soft drinks; water, enriched water and sports
drinks; juices, dairy and plant-based beverages; tea and coffee; and energy drinks. They own
and market four of the world's five largest non-alcoholic soft drink brands: Coca-Cola, Diet
Coke, Fanta and Sprite. Branded Coca-Cola Finished Beverages, sold in the United States since
1886, are now sold in more than 200 countries and territories.

Definitions of terms
What Is Ratio Analysis?
Ratio analysis is a quantitative method of gaining insight into a company's
liquidity, operational efficiency, and profitability by studying its financial
statements such as the balance sheet and income statement. Ratio analysis
is a cornerstone of fundamental equity analysis .

Description of each type of ratio

Liquidity Ratios
Liquidity ratios measure a company's ability to pay off its short-term debts
as they become due, using the company's current or quick assets. Liquidity
ratios include the current ratio, quick ratio, and working capital ratio.
What Is Capital Employed?
Capital employed, also known as funds employed, is the total amount of
capital used for the acquisition of profits by a firm or project. Capital
employed can also refer to the value of all the assets used by a company to
generate earnings.

What Is Net Profit Margin?

The net profit margin, or simply net margin, measures how much net
income or profit is generated as a percentage of revenue. It is the ratio of
net profits to revenues for a company or business segment. Net profit
margin is typically expressed as a percentage but can also be represented in
decimal form. The net profit margin illustrates how much of each dollar in
revenue collected by a company translates into profit.

What Is Profit Margin?

Profit margin is one of the commonly used profitability ratios to gauge the
degree to which a company or a business activity makes money. It
represents what percentage of sales has turned into profits. Simply put, the
percentage figure indicates how many cents of profit the business has
generated for each dollar of sale. For instance, if a business reports that it
achieved a 35% profit margin during the last quarter, it means that it had a
net income of $0.35 for each dollar of sales generated.

What Is Gross Profit Margin?

Gross profit margin is a metric analysts use to assess a company's financial
health by calculating the amount of money left over from product sales after
subtracting the cost of goods sold (COGS). Sometimes referred to as the
gross margin ratio, gross profit margin is frequently expressed as a
percentage of sales.
Year Ended December 31, 2019 2018 2017

Net Operating Revenues $ 37,266 $ $

34,300 36,212

Cost of goods sold 14,619 13,067 13,721

Gross Profit 22,647 21,233 22,491

Selling, general and administrative expenses 12,103 11,002 12,834

Other operating charges 458 1,079 1,902

Operating Income 10,086 9,152 7,755

Interest income 563 689 679

Interest expense 946 950 853

Equity income (loss) — net 1,049 1,008 1,072

Other income (loss) — net 34 (1,674) (1,763)

Income Before Income Taxes 10,786 8,225 6,890

Income taxes 1,801 1,749 5,607

Consolidated Net Income 8,985 6,476 1,283

Less: Net income (loss) attributable to noncontrolling interests 65 42 35

 Net Income Attributable to Shareowners of The Coca-Cola $ 8,920 $ $
Company
6,434 1,248

Basic Net Income Per Share1 $ 2.09 $ $

1.51 0.29

Diluted Net Income Per Share1 $ 2.07 $ $

1.50 0.29

Average Shares Outstanding — Basic 4,276 4,259 4,272

Effect of dilutive securities 38 40 52

Average Shares Outstanding — Diluted 4,314 4,299 4,324

1Calculated based on net income attributable to shareowners

of The Coca-Cola Company.

Refer to Notes to Consolidated Financial Statements. Ref: pag

68
CONSOLIDATED STATEMENTS OF INCOME
(In millions except per share data)
CONSOLIDATED BALANCE SHEETS
(In millions except par value)

December 31, 2019 2018

ASSETS
Current Assets
Cash and cash equivalents $ 6,480 $ 9,077
Short-term investments 1,467 2,025
Total Cash, Cash Equivalents and Short-Term Investments 7,947 11,102
Marketable securities 3,228 5,013
Trade accounts receivable, less allowances of $524 and $501, respectively 3,971 3,685
Inventories 3,379 3,071
Prepaid expenses and other assets 1,886 2,059
Total Current Assets 20,411 24,930
Equity method investments 19,025 19,412
Other investments 854 867
Other assets 6,075 4,148
Deferred income tax assets 2,412 2,674
Property, plant and equipment — net 10,838 9,598
Trademarks with indefinite lives 9,266 6,682
Bottlers' franchise rights with indefinite lives 109 51
Goodwill 16,764 14,109
Other intangible assets 627 745
Total Assets $ 86,381 $ 83,216
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 11,312 $ 9,533
Loans and notes payable 10,994 13,835
Current maturities of long-term debt 4,253
5,003
Accrued income taxes 414 411
Total Current Liabilities 26,973 28,782
Long-term debt 27,516 25,376
Other liabilities 8,510 7,646
Deferred income tax liabilities 2,284 2,354
The Coca-Cola Company Shareowners' Equity
Common stock, $0.25 par value; authorized — 11,200 shares; issued — 7,040 shares 1,760 1,760
Capital surplus 17,154 16,520
Reinvested earnings 65,855 63,234
Accumulated other comprehensive income (loss) (13,544 ) (12,814 )
Treasury stock, at cost — 2,760 and 2,772 shares, respectively (52,244 ) (51,719 )
Equity Attributable to Shareowners of The Coca-Cola Company 18,981 16,981
Equity attributable to noncontrolling interests 2,117 2,077
Total Equity 21,098 19,058
Total Liabilities and Equity $ 86,381 $ 83,216

Refer to Notes to Consolidated Financial Statements.

Ref: pag 70

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)
2019 2018 2017
Year Ended December 31,
Operating Activities
Consolidated net income $ 8,985 $ $

6,476 1,283
Depreciation and amortization 1,365 1,086 1,260
Stock-based compensation expense 201 225 219
Deferred income taxes (280) (413) (1,252)
Equity (income) loss — net of dividends (421) (457) (628)
Foreign currency adjustments 91 (50) 292
Significant (gains) losses — net (467) 743 1,459
Other operating charges 127 558 1,218
Other items 504 699 (252)
Net change in operating assets and liabilities 366 (1,240) 3,442
Net Cash Provided by Operating Activities 10,471 7,627 7,041
Investing Activities
Purchases of investments (4,704) (7,789) (17,296)
Proceeds from disposals of investments 6,973 14,977 16,694
Acquisitions of businesses, equity method investments and nonmarketable (5,542) (1,263) (3,809)
securities
Proceeds from disposals of businesses, equity method investments and 429 1,362 3,821
nonmarketable securities
Purchases of property, plant and equipment (2,054) (1,548) (1,750)
Proceeds from disposals of property, plant and equipment 978 248 108
Other investing activities (56) (60) (80)
Net Cash Provided by (Used in) Investing Activities (3,976) 5,927 (2,312)
Financing Activities
Issuances of debt 23,009 27,605 29,926
Payments of debt (24,850) (30,600) (28,871)
Issuances of stock 1,012 1,476 1,595
Purchases of stock for treasury (1,103) (1,912) (3,682)
Dividends (6,845) (6,644) (6,320)
Other financing activities (227) (272) (95)
Net Cash Provided by (Used in) Financing Activities (9,004) (10,347) (7,447)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted
Cash and
Restricted Cash Equivalents (72) (262) 241
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Net increase (decrease) in cash, cash equivalents, restricted cash
and restricted cash equivalents during the year (2,581) 2,945 (2,477)
Cash, cash equivalents, restricted cash and restricted cash equivalents at 9,318 6,373 8,850
beginning of year
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents 6,737 9,318 6,373
at End of Year
Less: Restricted cash and restricted cash equivalents at end of year 257 241 271
Cash and Cash Equivalents at End of Year $ 6,480 $ $

9,077 6,102
Refer to Notes to Consolidated Financial Statements.
Ref: pag 71

Formulas ratio analysis

GROSS PROFIT MARGIN = sales revenue* = 37,266 * 100 = *100=164%

Gross profit 22,647

Ref: pag 68

OPERATING PROFIT MARGIN= operating income * 100

Net sales

10,086* 100 = 0,27*100= 27%

37,266

NET PROFIT MARGIN= net income (gross profit)*100

 net sales

22,647 * 100 =0,60* 100= 60%

37,266

CAITAL EMPLOYED = operating income (pag 68) * 100

Sharenolder equity (pag 70)

10,086 * 100= 0.5*100= 50%

18,981

LIQUITY RATIO= current assets = 20,411 = 0,8%

current liabilities 26,973

Comparison of prior fiscal year with

current fiscal year

GROSS PROFIT MARGIN = sales revenue* = 37,266 * 100 = 1,6 *100=164%

Gross profit 22,647

Year 2019

GROSS PROFIT MARGIN = sales revenue* = 34,300 * 100 = 1,61 *100=161%

Gross profit 21,233

Year 2018

OPERATING PROFIT MARGIN= operating income * 100

Net sales

10,086* 100 = 0,27*100= 27%

 37,266

Year 2019

OPERATING PROFIT MARGIN= operating income * 100

Net sales

9,152* 100 = *100=26 %

34,300

Year 2018

NET PROFIT MARGIN= net income (gross profit)*100

net sales

22,647 * 100 =0,60* 100= 60%

37,266

Year 2019

NET PROFIT MARGIN= net income (gross profit)*100

net sales

21,233 * 100 = * 100=61 %

34,300

Year 2018

CAITAL EMPLOYED = operating income (pag 68) * 100

Sharenolder equity (pag 70)

10,086 * 100= 0.5*100= 50%

18,981

Year 2019
CAITAL EMPLOYED = operating income (pag 68) * 100

Sharenolder equity (pag 70)

9,152* 100= *100= 53%

16,981

Year 2018⁰0⁰

LIQUITY RATIO= current assets = 20,411 = 0,7%

current liabilities 26,973

Year 2019

LIQUITY RATIO= current assets = 24,930 = 0,8 %

current liabilities 28,782

year 2018