Introduction
The Coca-Cola Company, established on September 5, 1919, is a beverage enterprise. ‘The Company possesses or licenses and markets more than 500 nonalcoholic beverage brands, predominantly sparkling beverages but also a variation of still beverages, such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks’ (Reuters). The company also holds and sells a range of nonalcoholic sparkling beverage products that contains Coca-Cola, Diet Coke, Fanta and Sprite. ‘The Company’s segments include Eurasia and Africa, Europe, Latin America, North America, Pacific, Bottling Investments and Corporate’ (Reuters)
Stock Overview
The company’s stock symbol is KO and it is traded on New York Stock Exchange (NYSE). The current Number of shares of common stock outstanding for Coca Cola amounts up to 4,380,112,851. As per the information shown on Nasdaq, the current trading price for KO is $41.6 dated 10 December 2014. According to the Marketwatch, 52 week low equals to a value of $36.89 along with 52 week high reaching a figure of $45.00.
In order to further analyze the stock movements, we will scrutinize its stock fluctuations for the year 2014 from the following charts.
Sources: Marketwatch
The above graph clearly depicts that there were major fluctuations in the stock of Coca Cola Enterprise for the year 2014. As you can see a big discrepancy amongst the highest value which is exceeding almost $50 and going as low as $35 in the same year. This shows the volatility of the stock and builds a case of instability against the KO. Moreover, in order to further deeply analyze the stock we will also present the stock history for the past five years in the following chart:
Sources: Yahoo Finance
This charts shows that there has been an overall rising trend in the stock of Coca Cola Enterprise over the past five years. This establishes the fast the stock price has rising from as low as $25 to almost as high as $50 over the past 5 years. This is a depiction of the fact that investors have shown faith in the progress and profitability of Coca Cola Enterprise and during the past years it has gained popularity in the market by handing out higher profit incentive for the company. This also signifies the fact that the company’s performance for the past years has been plausible. It has delivered up to the market expectation and has fulfilled the promises made to the investors of the company. Moreover, we can also say that the company has consistently performed well during the year and has either gained or at least maintained its market share against its rising competitors of the industry. To further analyze the companies performance in the past 5 consecutive years we will scrutinize some of other crucial financial ratios.
Other Financials
Revenue
The following table shows the revenue figures for Coca Cola Enterprise for past 5 years:
Source: Hoovers
As can be seen that the revenue of the company has increase significantly over the years. It establishes the fact that the company has gigantically grown in size. Coca Cola enterprise has worked had to not only retain the current market share but also gain new market share, hence declaring itself the leader of the beverages world. It can also be due to the fact that the company has consistently introduced new and innovative products in the market. This can be leading it towards new markets and capturing new customers. This also states that the company has sustained its quality of the product that it is producing and shown maximum quality of consumer satisfaction.
Profitability
In this section we will investigate the profitability ratios of Coca Cola enterprise. We will explain the financial ration mentioned in the following tables and assess the company’s performance on each of them. Later we will also provide a possible explanation to the changes in the ratios.
Source: Stock Analysis on Net
Source: Hoovers
Gross profit margin specifies the percentage of revenue accessible to cover operating and other expenditures. Coca-Cola Enterprise gross profit margin declined from 2011 to 2012 but then increased from 2012 to 2013 still not attaining 2011 figure.
Operating profit margin is a profitability ratio computed as operating income divided by revenue. ‘Coca-Cola Enterprise operating profit margin improved from 2011 to 2012 but then slightly deteriorated from 2012 to 2013 not reaching 2011 level’ (Stock Analysis on Net). Net profit margin is a gauge of profitability, computed as net income divided by revenue. This net profit margin increased from 2011 to 2012 but then depreciated ominously from 2012 to 2013.
However, if we look at the second table we can see that the profitability figures in terms of number has increased consistently over the past years. The profitability ratios have seen a decline but the numbers in real terms have been increasing for the company. A low profit margin specifies a low margin of protection and a greater risk that deterioration in sales will remove profits and will lead to a net loss. The decline in some profitability ratios mentions above means that the company is earning less amount of profit on each sales as compared to earlier on. This may happen due to an increase in the cost of production for the company. Regardless, the company is still generating high profits in real terms and doing exceptionally well during the past years. There have been a minor setbacks but Coca Cola Enterprise is plausibly being smart about overcoming them.
Conclusion
Works Cited
"Coca-Cola Co." MarketWatch. N.p., n.d. Web. 10 Dec. 2014.
"Coca-Cola Co. (KO) | Profitability." Stock Analysis on Net. N.p., n.d. Web. 10 Dec. 2014.
"THE COCA-COLA COMPANY Revenue and Financial Data." Hoovers. N.p., n.d. Web. 10 Dec. 2014.
"KO Interactive Stock Chart." Yahoo Finance. N.p., n.d. Web. 10 Dec. 2014.
"The Coca-Cola Co (KO) Company Profile | Reuters.com." Reuters. Thomson Reuters, n.d. Web. 09 Dec. 2014.
