The Coca-Cola Company Research Paper Example | Topics and Well Written Essays - 1250 words

The Coca-Cola bon ton - Research Paper ExampleWe will be looking at several types of financial ratios visible(prenominal) in assessing the financial position of The Coca-Cola accompany Liquidity proportions, Asset Management Ratios, Profitability Ratios and Gearing Ratios. The vicenary findings in this segment can be found in the Appendix section of this report. The results show that The Coca-Cola Company has a good Liquidity Ratio. The companys Current Ratio is 1.12 (0.95 in Q1 2008) and its Quick Ratio is 0.94 (0.80 in Q1 2008). This means that The Coca-Cola Company is still able to generate enough cash to settle its short liabilities. There has been a slight value in its Liquidity Ratio compargond with the previous quarter. As a guide, a current ratio of 2 is ideal. However, in the companys case, 46% of its Current Assets (42% in Q1 2008) are made up of cash and cash equivalents. At a glance, the companys assets are being managed efficiently. Its Inventory Turnover is 1.13 ( 1.07 in Q1 2008), which shows that company is trading better. Its inventories declined by 6% in the get-go quarter of 2009 whereas its sales increased by 3% in the same quarter of 2008. Nevertheless, the company should prepare none that over increasing its inventories may adversely affect its business performance. This is because costs associated with holding inventories for alike long can be very expensive. As such, managing its inventories well is recommended. There is a slight improvement in the Average Collection Days of 39 (43 Days in Q1 2008). Although the company is able to pair its short-term liabilities it should still make an effort to improve the collection of its debts. The credit term given to its customers is not stated however, as a guideline, 30 days is recommended. In this case, the companys customers are enjoying passably more than the normal credit terms and this should be monitored.