SWOT & FINANCIAL ANALYSIS
BY
MAHBOOB UL HASSAN
(MCOF19M006)
A Project Submitted to the Noon Business School,
University of Sargodha.
In Fulfillment of the Requirements for the Degree of
MASTER IN COMMERCE
M.COM
(2019-2021)
DEPARTMENT OF NOON BUISNESS SCHOOL
UNIVERSITY OF SARGODHA.
PAKISTAN
JUNLY 3, 2021.
INTRODUCTION:
This is top in the world known everywhere in the world and it is available on every supermarket and every
small shop each and every wherein the world it is the most selling product.
This revolutionary product Started in 1885 the John Pemberton was respected pharmacist in atlantic in
America the made proprietary medicine through chemical test .He use coca leaf with wine and kola nuts
for the procure of Nervous disorder, headache Mental, exhaustion Physical Exhaustion that can Restore
your health and Happiness after banned on wine. Pemberton used a natural ingredient for coca cola drink
.In 1986 John Pemberton made a partnership with his friend Ed Holland Frank Robinson David Doe and
Frank Robinson was an earlier marketer who gave an advanced printing machine concept with partner
David Doe at that time that operation was much appreciated.
In the 19th century with other two ingredients, the final ingredient was search syruf mixed with carbonated
water and made a final drink that was very tasty and they tried to sell it in the market
Before selling in the market the name of the drink was important for selling and all four partners jointly
brainstormed for the name of drink and Frank Robinson suggested the name of drink Coca Cola.
Frank Robinson also designed the logo Coca Cola that was in handwriting and its market as a dual purpose
market that worked as a stimulating medicine and it was a very tasty soda fountain drink.
Coca Cola initial tagline that tells us about all the qualities given to it.
Delicious Refreshing Exhilarating Invigorating new and popular soda fountain containing the properties of
wonderful coca plant and the famous kola Nuts in start Robin son technique and low cost advertising made
Coca Cola much famous.
As well Doe exited the partnership and other partner M Alexander joined at that time Walker joined the
company as a sales manager and this new team applied for coca cola trade mark and they got that trade
mark.
Coca-Cola in Pakistan:
In the cities of Pakistan Coca-Cola was established in 1953. It has provided 66 years of successful and
dedicated service to its consumers in Pakistan. Coca-Cola Beverage Pakistan limited is overseen and
managed by Coca-Cola international. Coca-Cola Pakistan operates in 8 bottlers and 4 are owned by CocaCola themselves. Coca-Cola plants saturated in Karachi,
Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahim Y. Khan, Multan and Lahore.
Mission or goal:
Vision:
Make it refreshing all over the World, Make a difference.
I'm not the best i will try.
I will take a break will never before.
Mission:
Our mission is to art the brands and choice of drinks that people love, to refresh them in body & spirit. And
it is done in ways that create a more sustainable business and better shared future that makes a difference
in people’s lives, communities and our planet. And everyone should get it easily thorough everywhere
SWOT Analysis:
Internal analysis consists of the analysis of strength, weaknesses, opportunities and threats of the
organization. Following is the SWOT analysis of Coca-Cola Company:
Strengths
1. Popularity.
2. Customer loyalty.
3. Large scale operations.
4. Advertisement.
5. Large scale production
6. Strong Partnership
Weakness
1. Health issues.
2. Lack of popularity of some brands.
3. Focus on carbonated drinks.
Opportunities
4.water managing
Opportunities
1. Increasing demand.
2. Introducing energy drinks.
3. Advertise less known products.
Threats
1. Competitions.
2. Taxes.
3. Inflation.
4. Customer Preference.
5. Digital evolution.
6. Water Scarcity.
Strengths:
In which there are several strengths for coca cola for capturing maximum market share over the world and
it also captures mostly market share in front of other substitutes available.
1. Popularity.
The coca cola brand is a top brand and everyone knows that it has a great identity in areas all over the world.
It is the most demanding soft drink. It provides great deals and packages with every deal and no one
competitor has the ability to provide their product at every place to beat the cock competency.
2. Customer loyalty.
This is a main factor the cock has a strength because the customers are loyal with coca cola brand
and its products. Cola provides 500 beverages in almost 200 countries. This is a nonalcoholic soft
drink in every trait due to this customer mostly purchasing their beverages at large scale.at large
scale people like coke soft drink.
Its taste is according to the customer's needs and wants due to this customers mostly like its
beverages.
3. Large scale operations.
As well coke has a large scale operation activities its supply chain operation is too strong due to this its
beverages are available at every corner of the world in which it is associated with 250 bottling partners and
its operations are too large due to greater demand.
4. Advertisement.
The most important factor of strength of any product is advertising due to this people know how about the
product and coke has a great advertisement plans and strategies all over the world and every corner of globe
due to this everyone know that about coca cola beverages and packages and its play an important role in
the strength of coke.
5. Large scale production
Because of large scale production there is no shortage of coke beverages. It has large plants in every state
or every country of all products like sprite diet coke etc. Its capacity of production is much higher as
compared to their competitors according to demand.
6. Strong Partnership
Coca cola has a strong partnership with their supplier customer and their agency holders due to this coke
being their most favorite and demanding product. Its bonding is too strong with their seller and strong
relationship in each culture and countries and bottleneck operations are reduced due to strong partnership
relation.
Weakness:
1. Health issues.
In which there is also an important factor of health issue because coke uses more sugar in there beverages
due to this it may cause health problems for the people and it is debatable problem for the coke brand.
2. Lack of popularity of some brands.
According to this other brand launched many products like lays and kurkure , but coke has not started due
to this customer move toward Pepsi's other brand.
3. Competitors
The basic reasons for the weakness is competitors like Pepsi journey they are the main competitors they
tried to beat the coke strength in every state on every station and it is a big weakness for any product.
4. Water managing
We know that in today's life there is a great problem of water rising everywhere and coke uses a huge
volume of water in their beverages and it may cause a lack of water and coca cola should also concentrate
on this issue.
Opportunities:
1. Increasing demand.
In such a case we know that the population rises every day in life due to this the demand also increases day
by day and the intensity of summer also increases due to this demand automatically increasing. It may cause
more opportunities and ways for further installation of plants and increase in profit.
2. Introducing energy drinks.
As well, Coke has an opportunity to introduce more and more energy drinks according to customer
requirements at low cost in which coke has more opportunities to launch new products in market in front
of Pepsi or other competitors.
3. Advertise less known products.
Coca cola has an opportunity to introduce and advertise their less known product in the market to get more
profit and more market shares due to people are mostly living in their home and the company should achieve
that opportunity to get more views and profit through online deliveries at home and get maximum orders.
Threats:
1. Competitions.
Competition is one of the most basic threats for every product because competitors tried to kick out other
products from the markets in which the Pepsi or gourmey are the most fronted competitors of the coke as
well pepsi also provide tough competition to coke in every market.
2. Taxes.
As well in many countries heavy taxes imposed on companies' products in which tax 1.175 million to 47
million paid and the 28 percent applied on beverages according to slab due to this according to economic
policies tariffs are threat for every product that is imposed on every company when they move in any other
country for setup a new plant.
3. Inflation
Price is the main factor for any product due to price. The product demand can be increased or decreased. In
2011 the coke product price rose due to this demand decrease and sale ratio also decreased price causing a
major threat for any product.
4. Customer Preference
Customer preference is most important for success of any product in which if the coke cannot make
beverages customer will not purchase due to this customer preference is most important factor no one
company can ignore it.
5. Digital evolution
. Coca cola has a complete supply chain on digital marketing every plant is digitally connected with each
other due to this there is a greater risk involved in using social networks.
6. Water Scarcity
Coca cola uses a large volume of water in beverages and water resources remain limited due to climate
factors and duty will be imposed on water in every country during making beverages.
COVID-19 IMPACT ON COCA COLA:
Due to covid-19 there was a great problem created for every product mostly beverages those may cause of
virus in which coca cola can adopt a great measurements from protecting corona in which they can use
additional precautions and hand sanitizers and mask during making a beverages and additional cleaning
process adopt and cleaning water used during filling the bottles at that time company can stop traveling and
stop transportation for the safety of customers and personal.
As well coca cola ensure the safety
precautions in distribution process
and making process.
In which the total community of
coke can support 100 million and also
start the safety campaigns and help
those people who are needy and also
provide great packages of their
beverages due to corona
Due to this coca cola made hundred
percent recycling bottles those can be
easily recycled.
That was also a threat decreasing the
sale margin.
It is concluded that coca cola can spend a lot of money to take a maximum market share over the world
countries. It is important that coke should also introduce a food item in the market for capturing the whole
market like Pepsi. We know that Pepsi has launched food items with their beverages and Coca cola should
try to introduce new food items.
We see that coke is always much better in front of Pepsi or journey due to its taste and quality and price. It
becomes demanding and captures more market share due to introducing food items.
Financial Analysis
Coca Cola Company Analysis of statement of financial position
Financial Analysis of Balance sheet
Annual data IN $
2016
2017
2018
2019
2020
22201
20675
16115
11175
10914
Receivables
3856
3667
3685
3971
3144
Inventory
2675
2655
3071
3379
3266
Prepaid Expenses
2481
2000
2059
1886
1916
Total current asset
34010
36545
24930
20411
19240
Property plant Equip
10635
8203
9598
10838
10777
Long term investment
17249
21952
20279
19879
20085
Goodwill intangible asset
21128
16636
21587
26766
28550
Other long term Asset
4248
4230
4148
6075
6184
Total Long term asset
53260
51351
58286
65970
68056
Total Assets
87270
87896
83216
86381
87296
Total Current Liabilities
26532
27194
28782
26973
14601
Cash on hand
Long term debt
29684
31182
25376
27516
40125
4081
8021
7646
8510
9453
total long term Liabilities
37518
41725
35376
38310
51411
Total Liabilities
64050
68919
64158
65283
66012
1760
1760
1760
1760
1760
65502
60430
63234
65855
66555
-11205
-10305
-12814
-13544
-14601
Other Shareholder equity
23220
18977
19058
21098
21284
Total shareholder equity
23220
18977
19058
21098
21284
Total liability Equity
87270
87896
83216
86381
87296
Other noncurrent liabilities
Common stock
Retained Earning
Comprehensive Income
Vertical Analysis
Annual data IN $
2016
2017
2018
2019
2020
25.44%
23.52%
19.37%
12.94%
12.50%
Receivables
4.42%
4.17%
4.43%
4.60%
3.60%
Inventory
3.07%
3.02%
3.69%
3.91%
3.74%
Prepaid Expenses
2.84%
2.28%
2.47%
2.18%
2.19%
Total current asset
38.97%
41.58%
29.96%
23.63%
22.04%
Property plant Equip
12.19%
9.33%
11.53%
12.55%
12.35%
Long term investment
19.77%
24.97%
24.37%
23.01%
23.01%
Goodwill intangible asset
24.21%
18.93%
25.94%
30.99%
32.70%
Other long term Asset
4.87%
4.81%
4.98%
7.03%
7.08%
Total Long term asset
61.03%
58.42%
70.04%
76.37%
77.96%
100.00%
100.00%
100.00%
100.00%
100.00%
Total Current Liabilities
30.40%
30.94%
34.59%
31.23%
16.73%
Long term debt
34.01%
35.48%
30.49%
31.85%
45.96%
4.68%
9.13%
9.19%
9.85%
10.83%
total long term Liabilities
42.99%
47.47%
42.51%
44.35%
58.89%
Total Liabilities
73.39%
78.41%
77.10%
75.58%
75.62%
2.02%
2.00%
2.11%
2.04%
2.02%
75.06%
68.75%
75.99%
76.24%
76.24%
-12.84%
-11.72%
-15.40%
-15.68%
-16.73%
Other Shareholder equity
26.61%
21.59%
22.90%
24.42%
24.38%
Total shareholder equity
26.61%
21.59%
22.90%
24.42%
24.38%
100.00%
100.00%
100.00%
100.00%
100.00%
Cash on hand
Total Assets
Other noncurrent liabilities
Common stock
Retained Earning
Comprehensive Income
Total liability Equity
Horizontal Analysis
Annual data IN $
Cash on hand
2016
2017
2018
2019
2020
100.00%
-6.87%
-27.41%
-49.66%
-50.84%
Receivables
100.00%
-4.90%
-4.43%
2.98%
-18.46%
Inventory
100.00%
-0.75%
14.80%
26.32%
22.09%
Prepaid Expenses
100.00%
-19.39%
-17.01%
-23.98%
-22.77%
Total current asset
100.00%
7.45%
-26.70%
-39.99%
-43.43%
Property plant Equip
100.00%
-22.87%
-9.75%
1.91%
1.34%
Long term investment
100.00%
27.27%
17.57%
15.25%
16.44%
Goodwill intangible asset
100.00%
-21.26%
2.17%
26.68%
35.13%
Other long term Asset
100.00%
-0.42%
-2.35%
43.01%
45.57%
Total Long term asset
100.00%
-3.58%
9.44%
23.86%
27.78%
Total Assets
100.00%
0.72%
-4.65%
-1.02%
0.03%
Total Current Liabilities
100.00%
2.50%
8.48%
1.66%
-44.97%
Long term debt
100.00%
5.05%
-14.51%
-7.30%
35.17%
Other noncurrent liabilities
100.00%
96.54%
87.36%
108.53%
131.63%
total long term Liabilities
100.00%
11.21%
-5.71%
2.11%
37.03%
Total Liabilities
100.00%
7.60%
0.17%
1.93%
3.06%
Common stock
100.00%
0.00%
0.00%
0.00%
0.00%
Retained Earning
100.00%
-7.74%
-3.46%
0.54%
1.61%
Comprehensive Income
100.00%
-8.03%
14.36%
20.87%
30.31%
Other Shareholder equity
100.00%
-18.27%
-17.92%
-9.14%
-8.34%
Total shareholder equity
100.00%
-18.27%
-17.92%
-9.14%
-8.34%
Total liability Equity
100.00%
0.72%
-4.65%
-1.02%
0.03%
Financial Analysis of income Statement
Annual data in $
2016
2017
2018
2019
2020
Sale
41863
36212
34300
37266
33014
Cost of goods sold
16465
13721
13067
14619
13433
Gross profit
25398
22491
21233
22647
19581
SG&A expenses
16370
12838
11002
12103
9731
Other op. Income expense
-1371
-1902
-1079
-458
-853
Operating expense
33206
28457
25148
27180
24017
Operating income
8657
7755
9152
10086
8997
Non op. income expense
-521
-865
-927
700
752
Pre-Tax income
8136
6890
8225
10786
9749
Income tax
1586
5607
1749
1801
1981
Income After tax
6550
1283
6476
8985
7768
Income from continuous op
6550
1283
6476
8985
7768
Net income
6527
1248
6434
8920
7747
10444
9015
10238
11451
10533
EBIT
8657
7755
9152
10086
8997
Basic share outstanding
4317
4272
4259
4276
4295
Share outstanding
4367
4324
4299
4314
4323
Basic EPS
1.51
0.29
1.51
2.09
1.8
Earnings per share
1.49
0.29
1.5
2.07
1.79
EBITDA
Vertical Analysis
Annual data in $
2016
2017
2018
2019
2020
100.00%
100.00%
100.00%
100.00%
100.00%
Cost of goods sold
39.33%
37.89%
38.10%
39.23%
40.69%
Gross profit
60.67%
62.11%
61.90%
60.77%
59.31%
SG&A expenses
39.10%
35.45%
32.08%
32.48%
29.48%
Other op. income expense
-3.27%
-5.25%
-3.15%
-1.23%
-2.58%
Operating expense
79.32%
78.58%
73.32%
72.94%
72.75%
Operating income
20.68%
21.42%
26.68%
27.06%
27.25%
Non op. income expense
-1.24%
-2.39%
-2.70%
1.88%
2.28%
Pre-Tax income
19.43%
19.03%
23.98%
28.94%
29.53%
3.79%
15.48%
5.10%
4.83%
6.00%
Income After tax
15.65%
3.54%
18.88%
24.11%
23.53%
Income from continuous op
15.65%
3.54%
18.88%
24.11%
23.53%
Net income
15.59%
3.45%
18.76%
23.94%
23.47%
EBITDA
24.95%
24.90%
29.85%
30.73%
31.90%
EBIT
20.68%
21.42%
26.68%
27.06%
27.25%
Basic share outstanding
10.31%
11.80%
12.42%
11.47%
13.01%
Share outstanding
10.43%
11.94%
12.53%
11.58%
13.09%
Sale
Income tax
Basic EPS
0.00%
0.00%
0.00%
0.01%
0.01%
Earnings per share
0.00%
0.00%
0.00%
0.01%
0.01%
Horizontal Analysis
Annual data in $
2016
2017
2018
2019
2020
Sale
100.00%
-13.50%
-18.07%
-10.98%
-21.14%
Cost of goods sold
100.00%
-16.67%
-20.64%
-11.21%
-18.41%
Gross profit
100.00%
-11.45%
-16.40%
-10.83%
-22.90%
SG&A expenses
100.00%
-21.58%
-32.79%
-26.07%
-40.56%
Other op. income expense
100.00%
38.73%
-21.30%
-66.59%
-37.78%
Operating expense
100.00%
-14.30%
-24.27%
-18.15%
-27.67%
Operating income
100.00%
-10.42%
5.72%
16.51%
3.93%
Non op. income expense
100.00%
66.03%
77.93%
-234.36%
-244.34%
Pre-Tax income
100.00%
-15.31%
1.09%
32.57%
19.83%
Income tax
100.00%
253.53%
10.28%
13.56%
24.91%
Income After tax
100.00%
-80.41%
-1.13%
37.18%
18.60%
Income from continuous op
100.00%
-80.41%
-1.13%
37.18%
18.60%
Net income
100.00%
-80.88%
-1.42%
36.66%
18.69%
EBITDA
100.00%
-13.68%
-1.97%
9.64%
0.85%
EBIT
100.00%
-10.42%
5.72%
16.51%
3.93%
Basic share outstanding
100.00%
-1.04%
-1.34%
-0.95%
-0.51%
Share outstanding
100.00%
-0.98%
-1.56%
-1.21%
-1.01%
Basic EPS
100.00%
-80.79%
0.00%
38.41%
19.21%
Earnings per share
100.00%
-80.54%
0.67%
38.93%
20.13%
Profit $ sale: Companies strived to up their sale and their profit margin but due to some
circumstances , sale and profit decreased such as in 2016 to 2020 60.67 million to 59.31
million.
Operating Expense: As well the operating expense of the company reduces during this period
5 year 79.32 to72.75 million in this period of 2016 to 2020.
Operating Income: Due to reduction in the operating expenses the operating income also
increased 20.68 to 27.25 in this period and the company got operating income due to reduction
in expenses.
Taxes: Due to inflation and other economic factors the tax percent also increased companies
pay more taxes due to more expansion.
Net Income: As well the net income has increased 15.59million.to23.47 million companies gain
the maximum profit in this period but less from the 2019.
Earnings Per Share: The company can get maximum on its shares in 2016 1.49 million and
gradually decrease in 2017 and then increase in 2019 2.09 million but in 2020 it was 1.79million
earning per share less than 2019.
Ratio Analysis:
Liquidity Ratio
Annual data IN Time
2016
2017
2018
2019
2020
Current Ratio
1.28
1.34
0.87
0.76
1.32
Quick Ratio
1.18
1.25
0.76
0.63
1.09
Total liability to Equity
2.76
3.63
3.37
3.09
3.10
Debt to equity
1.28
1.64
1.33
1.30
1.89
Operating Cycle
Annual data IN Days
2016
2017
2018
2019
2020
Receivable Turnover
10.86
9.88
9.31
9.38
10.50
Av. collection period
33.61
36.94
39.21
38.91
34.76
Note = days in a year
365
Efficiency Ratio
Annual data IN Time
2016
2017
2018
2019
2020
Total Asset turnover
-0.73
-0.67
-0.64
-0.80
-0.67
Fixed Asset turnover Ratio
1.99
0.86
1.08
1.27
1.03
Inventory turnover ratio
0.02
0.06
0.02
0.02
0.02
Debt Ratios
Annual data IN %
Debt Ratio
2016
2017
2018
2019
2020
73.39%
78.41%
77.10%
75.58%
75.62%
Profitability Ratios
Annual data IN %
2016
2017
2018
2019
2020
Gross profit margin
60.67%
62.11%
61.90%
60.77%
59.31%
Operating profit margin
20.68%
21.42%
26.68%
27.06%
27.25%
Net profit Margin
15.59%
3.45%
18.76%
23.94%
23.47%
Return on asset
7.48%
1.42%
7.73%
10.33%
8.87%
Return on equity
28.11%
6.58%
33.76%
42.28%
36.40%
INTERPRETATION
LIQUIDITY RATIO
Company’s Ability to pay off current debt obligations without raising external
capital.
QUICK RATIO… OR ( ACID TEST RATIO )
The quick ratio is an indicator of a company’s short-term liquidity position and
measures a company’s ability to meet its short-term obligations with its most
liquid assets.
This also indicates that the company can pay off its current debts without selling its long-term
assets. If a company has a quick ratio higher than 1, this means that it owns more quick assets
than current liabilities.
Absolute liquid assets can also meet the current liabilities and in 2016 it was 1.18 and further
increased 1.25 and gradually decreases 0.77 to 0.63 but in 2020 increased in quick assets to
meet the liabilities.

The higher the ratio result, the better a company's liquidity and financial
health; the lower the ratio, the more likely the company will struggle with
paying debts.

QR=CE+MS+AR / C.L
QR=CA−I−PE / C.L
QR=Quick ratio
CE=Cash & equivalents
MS=Marketable securities

AR=Accounts receivable
CL=Current Liabilities
CA=Current Assets
I=Inventory
PE=Prepaid expenses
NOTE:
IN QUICK ratio only most liquid asset are included.
Inventory and prepaid expense are excluded.
The quick ratio is more conservative than the current ratio because it excludes
inventory and other current assets, which are generally more difficult to turn into
cash. The quick ratio considers only assets that can be converted to cash in a
short period of time.
CURRENT RATIO:
Current Ratio=Current assets / Current liabilities
The higher the current ratio, the more capable a company is of paying its obligations because
it has a larger proportion of short-term asset value relative to the value of its short-term liabilities
In current ratio shows a company has an ability to pay its liability to current assets and the
current ratio increased as compared to other years in 2020 1.32 but less than the 2017.
DEBT TO EQUITY RATIO:
= TOTAL EQUITY / TOTAL SHARES CAPITAL & RESERVES
A low debt-to-equity ratio indicates a lower amount of financing by debt via lenders, versus
funding through equity via shareholders. A higher ratio indicates that the company is getting
more of its financing by borrowing money, which subjects the company to potential risk
if debt levels are too high.
OPERATING CYCLE RATIO
This is the ability to get his receivables in a certain time period. In 2016 the collection period was
34days but increases in further three year but in 2020 collection period decreases at 35 days as
well 60 days are allowed credit situation.
EFFICIANCY RATIO
In 2016 coca cola had high power to generate revenue per share in which in 2017 ratio was
.67 further .64 and .80 then decrease ratio in 2020 at level .67 to earn revenue per dollar.
As well, fixed asset turnover also gradually decreased last year as compared to the first year.
And inventory selling has remained constant in all years but in 2017 some increased.
DEBT RATIO
In which company has an ability to meet his debts through assets in which 73% ability to meet
debt in 2016 and gradually increase in 2017 and further decrease in 2018 and 2019 and
moredecrease in 2020 at level 75.62%.
PROFITABILITY RATIO
In which ratio higher shows higher productivity with more revenue and services at low cost gross
profit margin little changed and the profit margin increased in all years and net profit profit also
increased in 2020 from previous year.cock has an ability to pay his taxes. And get maximum
return on his sale or assets as compared to other years in 2020.