Coca cola customers profitability analysis

Average inventory turnover for slow-moving products was 0. Dividend yield is an especially important metric for income-seeking investors interested in received cash flows from a stock without having to sell it.

Examples of variable costs include materials to make a product, sales commissions, and freight costs.

Coca-Cola: Profitability Analysis

Most notably, if trends go against soda and bottled drinks, Pepsi may be able to hedge its bets with its other lines. Keurig, famous for pod-based, hot drinks intends to feature Coke-branded products for its upcoming platform.

It may not be very likely, but anyone investing in Coca-Cola should at least keep an eye on the competitive landscape. The Coca-Cola Company Business Segments The firm reports its activities in two business segments that sell sparkling and stills beverages through 6 operating segments.

We invite you to share your thoughts and opinions about this article by sending an e-mail to? Article Figures [Figure 1] Assigning costs to customers and customer segments Enlarge this image [Figure 2] Profitability by type of account: In this franchised distribution system the company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory.

Accounting systems typically record marketing and logistics costs in aggregated accounts. As the demand for water continues to climb around the world, and water becomes scarcer, the overall quality of available water sources may very well deteriorate markedly, leaving the Coca-Cola system to incur higher costs or face capacity constraints that could adversely affect its profitability or net operating revenues in the long run.

As more people become health-conscious, the threat of a trend forming in which buyers substitute a different drink for Coca-Cola products becomes more of a possibility. The database must be capable of collecting all of the revenues and costs for every transaction and aggregating them by functional activity for example, selling, advertising and promotion, transportation, warehousing, and order processing.

The company also gets revenues by providing marketing support and selling other nonalcoholic beverage brands that include DPSG, Nestle, Aujan industries and Monster beverages through licenses, joint ventures and strategic partnerships.

Profit margin is very useful when comparing companies in similar industries. Lambert From the Quarter 4 issue Comment Do you know what individual customers contribute to earnings per share?

To answer such questions, management must know what costs and revenues will change as a result of the decision that is being made. Figure 8 provides examples of source documents as well as some of the management reports and profitability reports that can be generated from this type of database.

The chains offer customers healthier alternatives, unique choices, and customer loyalty rewards that are not easily matched by Coca-Cola. Managers in companies that have implemented segment profitability reports have been able to identify products and customers that were either unprofitable or did not meet corporate financial objectives.

Marginal, or incremental, costing also called direct costing or variable costing is a system in which variable costs are associated with products and fixed costs are treated as period costs that is, they are fixed for the period. Disagree with this article? If the answers to both questions in Figure 1 are "no," then the cost is placed in the contribution pool.

Since costs that are common to multiple segments are allocated, the process is necessarily subjective and arbitrary. To see how managers can make better decisions using reports developed in this manner, let us consider the example of one division of a large corporation.

Mortgage by Jeff Looking at profitability is a very important step in understanding a company. There is increasing demand for healthy alternatives to sparkling beverages from growing teen population with higher spending capacity. The marketing manager wanted to increase the advertising budget in order to increase sales.

As shown in Figure 2, drugstores, with 45 percent of net sales, were the largest of the four customer types.

How Coca-Cola Company Makes Money? Understanding Coca-Cola Business Model

How many production setups are required? The predicted measure of cost may not be a measure of what the activity should cost but rather is an estimate of what it will cost, based on the results of previous periods.

Get a free 10 week email series that will teach you how to start investing. Granted, it would have to have a very positive and very viral image or spend a fortune to create the type of brand recognition Coca-Cola enjoys, but it is not impossible.

In addition to the distinction between direct and absorption costing, companies may value inventories based upon actual costs or standard costs. Take warehouse labor, for example. When comparing the current Gross profit margin, Operating and Net Profit margins to the 5 year averages the current results are lower.This article is about how Coca-Cola Company makes money.

Firstly, we present our analysis of Coca-Cola business strategy and its impact on Coca-Cola Business Model.

The Coca-Cola Company: A Short SWOT Analysis Kenneth J. DeFranco, Jr. | May 20, The Coca-Cola Company (KO - Free Coca-Cola Stock Report) appears set to plod along during its campaign.

The Coca-Cola Company: A Short SWOT Analysis

An analysis of the Coca Cola any other competitors then customers will choose Coca Cola over long term profitability of Coca Cola company for instant. This is a Five Forces analysis of the soda giant Coca the business world for evaluating the profitability and customers of coca cola are not.

A Comparative Profitability Analysis Of Coca Cola & Pepsico - Free download as PDF File .pdf), Text File .txt) or read online for free.1/5(1). Analyzing Porter's 5 Forces on Coca-Cola (KO) a powerful idea of what factors could affect a company’s profitability.

customers could start drinking coffee.

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Coca cola customers profitability analysis
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