Coke

Income Statement

2001E
20,223
6,092
14,131

2002E
21,234
6,285
14,949

2003E
22,508
6,617
15,891

Selling expense
General & admin.

7,508
1,224
8,732

7,569
1,248
8,817

7,985
1,273
9,258

Operating income

5,399

6,132

6,633

295
(310)
197
24

244
(280)
227
(10)

254
(264)
261
(10)

Pretax Income

5,605

6,313

6,874

Income Taxes

1,682

1,894

2,062

Net Income

3,923

4,419

4,812

Basic EPS
Diluted EPS

1.58
1.58

1.77
1.77

1.94
1.93

2,483
2,488

2,494
2,499

2,482
2,487

2,238
1,838
1,015
1,834
6,925

2,406
1,930
1,048
1,868
7,252

2,432
2,046
1,103
1,964
7,545

5,962
2,364
7,334
(2,935)
4,399
1,783
21,433

6,189
2,364
8,084
(3,476)
4,608
1,488
21,901

6,449
2,364
8,834
(4,073)
4,761
1,193
22,312

3,796
3,600
154
643
8,193

3,868
3,500
153
724
8,245

4,066
3,400
2
788
8,256

681

528

526

Net operating revenue

Cost of goods sold
Gross profit

Interest income
Interest expense
Equity income
Other income/(deductions), net

Basic shares outstanding (MM)

Diluted shares outstanding (MM)
Balance Sheet
Cash & equivalents
A/R, Net
Inventories
Prepaid expenses & other
Total current assets
Investments in bottlers
Marketable securities
PP&E
Less: Acc. depreciation
Net PP&E
Goodwill & other
Total assets
A/P & accrued liabilities
Loans and notes payable
Current portion of long-term debt
Accrued income taxes
Total current liabilities
Long-term debt

168

3910

26

Other
Deferred income taxes
Total liabilities

991
302
10,167

991
239
10,003

991
170
9,943

Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive losses
Treasury stock
Total equity

870
3,196
23,466
(2,722)
(13,543)
11,267

870
3,196
26,097
(2,722)
(15,543)
11,898

870
3,196
29,067
(2,722)
(18,043)
12,368

21,434

21,901

22,311

489
295
1,738
700

542
295
1,957
750

597
295
2,131
750

Total liabilities and equity

Other projected items:

Depreciation
Amortization
Cash taxes
Capital expenditures

Accumulated goodwill amortization at the end of 2000 was expected to be $192 million.

(63)

870
3200

-13290

(69)

Capital Market Information on December 4, 2000

Current yields on U.S Treasuries

Publicly Traded Coca-Cola Debt

3-month
6-month
1-year
5-year
10-year
20-year

6.15%
Coupon
6.11%
Maturity
6.00% Current Price
5.52%
Rating
5.73%
5.82%

Historical Equity Risk Premium (1926-1999)

Geometric mean
Arithmetic mean

Coca-Cola Historic Betas

paid
5.75% semiannually
17 Years
91.54
A1

1994
1995
1996
1997
1998
1999
2000
Average

5.90%
7.50%

Capital Market Information on December 4, 2000 (continued)

Dividend History and Forecasts
Payment Dates

31-Mar
1996
1997
1998
1999
2000

------

30-Jun

30-Sep

31-Dec Total

0.125
0.14
0.15
0.16
0.17

0.125
0.14
0.15
0.16
0.17

0.25
0.28
0.30
0.32
0.34E

2601
2611

2731
2742

E = estimate
Value Line Forecast of Dividend Growth from 1997-99 to 2003-05:
Value Line EPS Estimate for FY 2001:
Coke share price on December 4, 2000:
Outstanding shares (in millions):
Basic
Diluted

7.50%
1.75
62.75
2,477
2,487

Source of data: Bloomberg Financial Services, Ibbotson Associates 1999 Yearbook, Value Line Investment Survey, IBES

0.50
0.56
0.60
0.64
0.68
0.73
0.79
0.84

Coca-Cola Historic Betas

0.88
0.83
1.19
1.11
0.97
0.71
0.44
0.88

1,811
1,976
2,101

Assumption

Ratio Analysis
Liquidity Analysis
Current ratio
Quick ratio
Cash from operations ratio
Activity Analysis
Average days outstanding
Average days inventory
Average days payable
Working capital turnover
Fixed assets turnover
Total assets turnover
Long -Term Debt and Solvency Analysis
Debt-equity ratio
Times interest earned (interest coverage ratio)
Fixed charge coverage ratio
Capital expenditure ratio
Cash from operation-debt ratio
Profitability Analysis
Operating margin
Net profit margin
ROA
ROE
Financial leverage effect (Net income/ Operating income)
Growth Analysis
Sales
Book assets
Net income before unusual gain/loss (NIBUG)
Adjusted NOPAT
Net Income
Operating income

Price Earning Ratio Analysis

Earning Per Share (EPS)
Price Earning Ratio (P/E)
Maryat Nirwandi

Increase in account receivable

Increase in account payable
Increase in inventory

Increase in accruals
Outstanding Share Growth

Number of days in a year

Accrued Liabilities
Dividend 2000
Dividend Growt Rate

365 Days
0.68
7.50%
Formula

Total Current Assets/Total Current Liabilities

Total Quick Assets/Total Current Liabilities
Cash flow from Operations/Total Current Liabilities

2001

2002

2003

0.85
0.72
0.55

0.88
0.75
0.60

0.91
0.78
0.66

33.17
60.81
227.44
(15.95)
4.60
0.94

33.18
60.86
224.63
(21.38)
4.61
0.97

33.18
60.84
224.28
(31.66)
4.73
1.01

0.59
15.60
5.48
6.43
0.55

0.56
19.69
6.08
6.54
0.60

0.55
22.70
6.65
7.25
0.66

Operating Income/Net Sales

Net Income/Net Sales
Net Income/Total Assets
Net Income/Total Equity
Net Income/Operating Income

25.36%
18.43%
18.30%
34.82%
72.66%

27.43%
19.77%
20.18%
37.14%
72.06%

28.00%
20.31%
21.57%
38.91%
72.55%

(Sales(n) - Sales(n-1))/Sales(n-1)
(Book Assets (n) - Book Assets (n-1))/Book Assets (n-1)
(NIBUG (n) - NIBUG(n-1))/NIBUG(n-1)
(Adjusted NOPAT(n) - Adjusted NOPAT(n-1))/Adjusted NOPAT(n-1)
(Net Income (n) - Net Income(n-1))/Net Income (n-1)
(Operating Income (n) - Operating Income (n-1))/Operating Income (n-1)

4.05%
49.61%
16.60%
10.30%
15.42%
5.66%

5.00%
13.02%
11.87%
17.64%
12.64%
13.58%

6.00%
9.52%
9.21%
9.45%
8.89%
8.17%

1.58
39.72

1.75
38.64

1.91
37.96

78
114
-55

92
72
33

116
198
55

((365xAccount Receivable)/(Net Revenue))

((365xInventory)/COGS)
((365xAccount Payable)/COGS)
Net Revenues/Working Capital
Net Revenues/Net PPE
Net Revenues/Asset

Total Current Liabilities/Shareholder Equity

EBIT/Interest Charge
(EBIT+Fixed Charge (Before Tax))/(Fixed Charge (Before Tax) + Interest)
Cash flow from Operations/Capital Expenditure
Cash flow from Operations/Total Current Liabilities

(Net Income-Preferred Devident)/Average Outstanding Shares

Market Value per Share/EPS

Increase in account receivable

Increase in account payable
Increase in inventory

Increase in accruals
Outstanding Share Growth

1.50%

1.50%

Comments

Current ratio Coca-cola terus meningkat hingga tahun 2003. Coca-cola meningkatkan current assets serta memperlambat laju pertumbuhan current liabilit
Quick ratio meningkat seiring dengan peningkatan current ratio. Coca-cola mengatur inventory agar stabil mengikuti rasio inventory terhadap current asse
Cashflow from operation ratio menunjukkan bahwa setiap tahunnya coca-cola meningkatkan porsi kas agar dapat mengimbangi beban jangka pendek.
Coca-cola mengalami masalah likuiditas. Aset serta kas perusahaan tidak mampu menutupi beban jangka pendek perusahaan. Coca-cola sebaiknya sege

laju pertumbuhan current liabilities. Coca-cola meningkatkan prepaid expense agar nilai aset meningkat. Meski begitu, Coca-cola masih tidak mampu melunasi hutang jan
nventory terhadap current asset sehingga angka quick ratio meningkat seiring nilai current ratio.
bangi beban jangka pendek.
haan. Coca-cola sebaiknya segera melunasi pinjaman jangka pendek dan mempercepat turnover penjualan sehingga mengurangi account payable.

masih tidak mampu melunasi hutang jangka pendek mereka.

account payable.

Coke
Income Statement
Net operating revenue
Cost of goods sold
Gross profit

2001E

2002E

2003E

100.00%
30.12%
69.88%

100.00%
29.60%
70.40%

100.00%
29.40%
70.60%

Selling expense
General & admin.

37.13%
14.02%
51.14%

35.65%
14.15%
49.80%

35.48%
13.75%
49.23%

Operating income

18.73%

20.60%

21.38%

Interest income
Interest expense
Equity income
Other income/(deductions), net

1.46%
-1.53%
0.97%
0.12%

1.15%
-1.32%
1.07%
-0.05%

1.13%
-1.17%
1.16%
-0.04%

Pretax Income

27.72%

29.73%

30.54%

Income Taxes

8.32%

8.92%

9.16%

19.40%

20.81%

21.38%

Net Income

Total equity
Total liabilities and equity

Balance Sheet
Cash & equivalents
A/R, Net
Inventories
Prepaid expenses & other
Total current assets

2001E

2002E

2003E

10.44%
8.58%
4.74%
8.56%
32.31%

10.99%
8.81%
4.79%
8.53%
33.11%

10.90%
9.17%
4.94%
8.80%
33.82%

27.82%
11.03%
34.22%
-13.69%
20.52%
8.32%
100.00%

28.26%
10.79%
36.91%
-15.87%
21.04%
6.79%
100.00%

28.90%
10.60%
39.59%
-18.25%
21.34%
5.35%
100.00%

A/P & accrued liabilities

Loans and notes payable
Current portion of long-term debt
Accrued income taxes
Total current liabilities

17.71%
16.80%
0.72%
3.00%
38.23%

17.66%
15.98%
0.70%
3.31%
37.65%

18.22%
15.24%
0.01%
3.53%
37.00%

Long-term debt
Other
Deferred income taxes
Total liabilities

3.18%
4.62%
1.41%
47.44%

2.41%
4.52%
1.09%
45.67%

2.36%
4.44%
0.76%
44.56%

4.06%
14.91%
109.49%
-12.70%
-63.19%
52.57%

3.97%
14.59%
119.16%
-12.43%
-70.97%
54.33%

3.90%
14.32%
130.28%
-12.20%
-80.87%
55.43%

100.00%

100.00%

100.00%

Investments in bottlers
Marketable securities
PP&E
Less: Acc. depreciation
Net PP&E
Goodwill & other
Total assets

Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive losses
Treasury stock
Total equity
Total liabilities and equity

Dividend Payment

Cash Flow from Operating Activities

Net Income
Depreciation
Decrease in account receivable
Decrease in Inventory
Increase in payable & acrual

2001
4,503
3,923
489
(78)
55
114

2002
4,908
4,419
542
(92)
(33)
72

2003
5,436
4,812
597
(116)
(55)
198

Cash Flow from Investing Activities

Purchase of fixed assets

(229)
(229)

(209)
(209)

(153)
(153)

Cash Flow from Financing Activities

Increase in long term debt
Devidend Paid

(1,965)
(154)
(1,811)

(2,129)
(153)
(1,976)

(2,103)
(2)
(2,101)

Net Increase in Cash $ Equivalents

Cash & Equivalents at the Beginning of the Year
Ending Cash & Equivalent

2,309
1,820
4,129

2,570
1,870
4,440

3,180
2,260
5,440

Free Cash Flow from Assets Prespective

Operating Income
Depreciation
Amortization
EBITDA
Income Tax
Less:Change in Income Tax Payable

2001
5,399
489
295
6,183
1,682
56

2002
6,132
542
295
6,969
1,894
63

2003
6,633
597
295
7,525
2,062
69

After Tax Cashflow from Operations

Change in net Operating Working Capital
Investment in fixed & other assets

4,445
1,432
700

5,012
275
455

5,394
282
455

FCF

2,313

4,282

4,657

Interest Paid to Lender

Dividends Paid
Increase in interest bearing short-term notes
Increase in other interest bearing current liabilities
Increase in Long Term Debt
Net Stock Repurchases

2001
-310
-1811
-100
0
-154
-248

2002
-280
-1976
-100
-153
-2000

2003
-264
-2101
-100
-2
-2500

FCF

-2313

-4229

-4703

Free Cash Flow from Financing Prespective

NOPAT

2001
2,591

2002
3,048

2003
3,336

Adjusting Operating Profit Before Taxes

Net Operating Revenue
Interest Expense
Other Income
COGS
SG&A
Depreciation & Amortization

4,329
20,223
-310
24
6,092
8,732
784

5,005
21,234
-280
(10)
6,285
8,817
837

5,467
22,508
-264
(10)
6,617
9,258
892

Cash Taxes

1,738

1,957

2,131

Invested Capital
Total Assets
A/P & Accrued Liabilities
Accrued Goodwill Amortization

17,445
21,433
(3,796.00)
-192.00

17,841
21,901
(3,868.00)
-192.00

18,054
22,312
(4,066.00)
-192.00

EVA

1,178.55

1,597.13

1,862.06

Cash Cycle
Inventory Conversion
Receivable Conversion
Payables Conversion

Resource Invested
Inventory
Receivable
Payable

2001
(133.45)
60.81
33.17
227.44

2002
(130.60)
60.86
33.18
224.63

738
109
167
461

745
113
175
456

2003
(130.26)
60.84
33.18
224.28

780
119 Million U$
186 Million U$
475 Million U$

Tax rate
WACC

35%
8.10%

8.13%

8.16%

Loans and notes payable

Current portion of long-term debt
Long-term debt
Total Debt

3,600
154
681
4,435

3,500
153
528
4,181

3,400
2
526
3,928

Cost of Debt
Coupon
Maturity
Current Price
Rating
Cost of Debt (Kd) = YTM
After Tax Cost of Debt =Kd(1-tax)

5.75%
17
91.57
A1
0.09%
0.06%

Debt

paid semiannually

Debt Weight
Debt Weight (Wd)

2.77%

Equity
Outstanding shares (in millions):
Coke share price on December 4, 2000:
Total Equity

2,477
62.75
155,432

2.33%

1.94%

2,601
67.46
175,444

2,731
72.52
198,032

97.67%

98.06%

Cost of Equity
Risk Free Rate (Rf)
Beta
Market Risk premium
Cost of Equity (Ke)

5.73%
0.44
5.90%
8.33%
Equity Weight

Equity Weight (We)

97.23%