COURSE: ACC 557 FINANCIAL ACCOUNTING
ASSIGNMENT 3: YOU ARE AN INVESTMENT ANALYST!
Coca Cola(CC) manufactures and sells:
• beverage concentrates, sometimes referred to as ‘‘beverage bases,’’ and syrups, including fountain syrups. They refer to this part of their business as their ‘‘concentrate business’’ or ‘‘concentrate operations’’); and
• finished sparkling and still beverages (they refer to this part of their business as their ‘‘finished products business’’ or ‘‘finished products operations’’).
Generally, finished products operations generate higher net operating revenues but lower gross profit margins than concentrate operations.
In their concentrate operations, CC typically generate net operating revenues by selling concentrates and syrups to authorized ‘‘bottlers’’ or ‘‘bottling partners’’.
Their finished products operations consist primarily of the production, sales and distribution operations managed by Coca Cola Refreshments (CCR) and the CC owned or controlled bottling and distribution operations. They generate net operating revenues by selling sparkling beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks, ready-to-drink teas and coffees, and certain water products, to retailers, distributors, wholesalers and bottling partners. In addition, in the United States, they manufacture fountain syrups and sell them to fountain retailers, such as restaurants and convenience stores who use the fountain syrups to produce beverages for immediate consumption.
Some of the most popular CC products are: Coca Cola, Sprite, Fanta, Diet Coke, Minute Maid, Nestea teas, Dasani and Kilnley waters & Powerade sports drink.
Major suppliers for CC raw materials-The NutraSweet Company and Ajinomoto Co., Inc. provide the aspartame, an important non-nutritive sweetener. CC currently purchase acesulfame potassium from Nutrinova Nutrition...