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|← The Application of the CVP||Ethical Dilemma →|
Coca Cola Company is the largest manufacture of soft drinks and beverages with headquarters in Atlanta Georgia. It has over 500 brands and over 3,500 brands. With its operations in over 200 countries spurning in six continents, Coke enjoys global success. It also employs about 139,600 people around the globe. It has 125 years of experience in the manufacture of soft drinks and beverages.
The company manufactures the concentrates beverages bases and syrups that make their brands unique. They sell these to their bottling partners (300 companies) who make the logistical systems in delivering products. They also participate in marketing, online programs, retail shop displays and package designs.
Cash flow position and the primary sources and uses of cash.
Coke Cola has exceptionally strong cash flow position. In year 2010, they made US$5.1 Billion that whose projection was to continue upwards. They have an extremely aggressive marketing strategy that seems to pay off. The primary sources of their cash are in their unique products that are still very popular 100 years down the line. Coca Cola invests a lot on their human resources personnel. Employees enjoy good salaries, employment conditions are favorable and in their sustainability report, they got a strategy that aims to continue improving in this area. Another area they use their cash well is in marketing and advertising. Their advertising campaigns have remained popular with people. Their brands are identified easily and their products give customers value of their money. They also involve in environmental conservation and humanitarian activities.
Shareholder’s dividends and management’s determination.
In reference to their corporate article written on Feb. 16 2012, the company has approved the payment of dividends. This will be 50th annual dividend increase. They will be paying $2.04 per share up from $1.88 per share in 2011. Payment for shares is from April 2012. The increase in dividend reflects the Board’s confidence in company long-term cash flow; The Company returned $8.6 billion to shareowners in 2011, through $4.3 billion in dividends and $4.3 billion in share repurchases.
Prospect for investment in the company.
Coca Cola Company is the largest selling beverage company in the world. They have 15 billion dollar unique brands, easily recognizable and they have loyal customers that make ready market. The company has strong cash flow system. Moreover, from their sustainability report and future financial projections this will undoubtedly continue to increase.
The company is committed also to building sustainable communities, it participates in initiatives that reduce environmental pollution, promote healthy living, create safe working environment and enhance economic development of the communities where they operate.
They also engage in helping communities; for example,the company pledged US$7.3 Million in cash and product donations to the relief after the country suffered massive earthquake in March 2011. Going by above reasons and in reference to their mission striving to refresh, inspire optimism, happiness, create value and make a difference in people’s life, I would invest in the company.