Business Finance
John F Kennedy University Soda Pop Organic Inc 2013 Annual Report

John F Kennedy University

Question Description

I need an explanation for this Business question to help me study.

In a formatted financial report, you will describe in detail the financial statements and current financial position of Soda Pop Organics, Inc. As you complete this assignment, be sure to include relevant information about Soda Pop Organics, Inc. such as background, mission, and products relative to their financial health and future projections. Your report will include the following sections: Section I: Cover page, table of contents, and report objective

In a formatted financial report, the following sections must be included: a cover page that includes the company name and year reported (excluding your name), the content contained in your report (i.e. the table of contents, which should identify all major sections 2-6 listed below), and one paragraph detailing the purpose of the report (i.e. the objective, explaining the purpose and ratio data to be analyzed).

Section II: Provide a summary of the organization’s background, mission, and product lines The summary section of the report asks you to describe Soda Pop Organics, Inc. You will explain the ratio data to be presented as well as the industry and product variety sold.by Soda Pop Organics, Inc. To complete this summary, you will use the spreadsheet and PowerPoint presentation provided to you.

Section III: Provide a summary of the organization’s outlook and future investments  The summary of the organization’s future outlook should identify products in development, the organizational strategy for future growth, and any new markets or acquisition of factories, farms, etc. that the organization has in development and which are identified in the PowerPoint presentation.

Section IV: Provide a summary of revenue, assets, liabilities, and shareholder’s equity  Using the supplied financial reports, create a one-page summary of total revenue, assets, liabilities, and shareholder’s equity. This information should be presented with a short explanation of each category and what the numbers mean from the perspective of major stakeholders such as investors, shareholders, and senior management.

Section V: Calculate the liquidity ratios, financial leverage ratios, and profitability ratios  Use the financial statements Excel file in order to calculate the following ratios Liquidity Ratios: Financial Leverage Ratios: Profitability Ratios: ‐ Current Ratio - Debt Ratio -Gross Profit Margin ‐ Quick Ratio - Debt-to-Equity Ratio - Return on Assets ‐ Cash Ratio - Return on Equity

Section VI: Provide an observations section that addresses the following three content areas 1. Explain the financial ratios by detailing the relevancy, interpretation, and what each ratio means relative to the financial health, investor perspective, and stakeholder perspective. 2. How does Soda Pop Organic, Inc. financial strategy encourage future growth? Discuss any issues or challenges in the organization’s financial health and how this might impact future growth. 3. What recommendations would you make to Soda Pop Organics, Inc. for the future? What information would encourage or discourage investment from outside sources?

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SODA POP ORGANICS, INC. 2013 ANNUAL REPORT COMPANY PROFILE Soda Pop Organics, Inc. is a soft drink company, started in 2001, with headquarters located in Washougal, Washington, USA. Organics currently employs over 120,000 people, invests in over 1,550 locally owned organic/hydroponic farms, and owns 130 sugar cane farms that grow and process only organic sugar cane products. COMPANY MISSION The mission of Soda Pop Organics, Inc. is to offer healthy, plant-based, soft drink products from sustainable farming activities made with only the most wholesome ingredients. We strive to uphold this commitment through investment in family-owned and operated farms throughout the world, with substantial investments focused on self-sustaining farms. We build relationships with local farmers, community leaders, and investment companies so that we can offer those communities in which we operate a holistic understanding of our products. Our mission goes well beyond sales and profits; we strive to positively impact the local job market and environment. COMPANY BACKGROUND Soda Pop Organics, Inc. began as a local produce stand in Washington. Local farmers of fruits and vegetables created a cooperative agreement to equally share production, bottling costs, and revenue. The revenue obtained by the farmers allowed them to increase their growing area, purchase sustainable farming equipment, and invest in other local farms to increase ownership within the company. As the value of the soda production increased, Organics became incorporated and was eventually traded on the US Stock Exchange in 2005. Today, Organics has over 20 products in development and competes with some of the most recognized soda manufacturers in the world. In addition, Organics has made substantial financial commitments to the sustainability movement of local farmers. They do this through local job creation. Organics builds relationships with the community, local farmers, community leaders, and employees. We invest in our community, we invest in sustainability, we invest in providing healthy beverages for our customers. PRODUCT LINES Soft Drink Lines: Organics Fruit Soft Drinks Herb and Flower Organics Soft Drinks Organics Tea Infused Soft Drinks Organics Soda Water Soft Drinks Flavored Water Lines: Organics Weight Management Water Energy Organics Water Organics Sleep Time Water Vitamin Organics Supplement Water Organics Sweet Flower Water Organics Tea Lines: Organics Black Tea Organics Lavender Bloom Organics Oolong Honeysuckle Organics White Tea Orange Organics Green Tea Cinnamon FUTURE VISION By the year 2025, Soda Pop Organics, Inc. will deliver, invest, and brand their products in every major market across the world. Delivery Systems and Bottling • Bottling and access to Soda Pop Organics products are major focuses of our research and development practices. Our drinks are wholesome and provide holistic outcomes for partner communities. Soda Pop Organics has committed to investing in 25 new bottling and distribution centers both domestically and internationally by 2025. Investing in New and Developing Farms • Soda Pop Organics has invested in developing countries and small village farming activities. By 2025, Organics will have over 150 international farms that grow organic sugar, organic fruit, and organic tea. This investment is committed to over $1.5 million dollars per year for the next 12 years. International Branding • Branding strategy is key to Soda Pop Organics’ success. By 2025, Soda Pop Organics will have invested $2.5 million per year in an international trademark branding operation. This will yield new investors and capital. FUTURE ASSETS, EQUITY, AND GROWTH PROJECTIONS 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2013 2014 2015 Assets Equity 2016 Growth 2017 COMMON STOCK MARKET PRICES 2013 Market and Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Fourth Quarter $39.62 Third Quarter 39.25 Second Quarter 41.92 First Quarter 38.95 Statement of Cash Flows Soda Pop Organics, Inc. For the Year Ended December 31, 2013 (In Millions) Operating Activities Consolidated net income Depreciation and amoritization Stock-based compensation expense Deferred income tax Equity (income) loss - net of dividends Foreign currency adjustments Significant (gains) losses on sales of assets - net Other operating charges Other items Net change in operating assets and liabilities $7.810 $1.745 $219 550 (301) 195 (785) 568 175 (1.052) Net cash provided by operating activities $9.124 Investing Activities Purchases of investment Proceeds from disposals of investments Acquisitions of businesses, equity method investments Proceeds from disposals of businesses, equity method Purchases of property, plant and equipment Proceeds from disposal of propert, plant and equipment Other investing activities ($15.852) 11.852 (475) 257 (1.250) 498 (652) Net cash provided (used) by investing activities ($5.622) Financing Activities Issuances of debt Payments of debt Issuances of stock Purchases of stock for treasury Dividends Other financing activities Net cash provided (used) in financing activities Increase (decrease) in cash during the period Cash balance at the beginning of the period Cash balance at the end of the period $35.625 (28.625) 1.254 (3.625) (3.325) 12 $1.316 $4.818 7.042 $11.860 Balance Sheet Soda Pop Organics, Inc. December 31, 2013 (In Millions) ASSETS Current Assets Cash and cash equivilents Short-term investments Marketable securities Trade accounts recieveables Inventories Prepaid expenses Assets held for sale 12650 4517 1947 2973 2798 1986 - Total Curent Assets Equity method investments Investments, bottling/farming companies Other Assets Property, plant, and equipment - net Trademarks with indefinite lives Bottlers' franchise risghts with indefinite lives Goodwill Other intangible assets Total Net Fixed Assets 9293 1008 3761 13967 5589 6219 11219 987 52043 Total Assets LIABILITIES Current Liabilities Accounts payable and accrued expenses Loans and notes payable Current maturities of long-term debt Accrued income taxes 8567 15201 954 219 Total Current Liabilities LONG-TERM LIABILITIES Long-term debt Other liabiities Deferred income taxes Deferred income taxes 17651 2784 4192 425 Total Long-term Liabilities SHAREHOLDER'S EQUITY Equity Attributable to Sharewoners 28704 Equity attributable to noncontrolling interests Total Shareholders' Equity TOTAL LIABILITIES & EQUITY 217 28921 26871 78914 24941 25052 78914 Income Stat Soda Pop Organi For Period Ended Decemb (In Millions) NET OPERATING REVENUES Cost of goods sold GROSS PROFIT Selling, general, and administrative expenses Other operating charges OPERATING INCOME Interest income Interest expense Equity income (loss) - net Other income (loss) - net INCOME BEFORE INCOME TAXES Income Taxes CONSOLIDATED NET INCOME Less Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE SODA POP BASIC NET INCOME PER SHARE DILUTED NET INCOME PER SHARE AVERAGE SHARES OUTSTANDING Effect of dilutive securities AVERAGE SHARES OUTSTANDING ASSUMING D Income Statement Soda Pop Organics, Inc. For Period Ended December 31, 2013 (In Millions) NET OPERATING REVENUES Cost of goods sold GROSS PROFIT Selling, general, and administrative expenses Other operating charges OPERATING INCOME Interest income Interest expense Equity income (loss) - net Other income (loss) - net INCOME BEFORE INCOME TAXES Income Taxes CONSOLIDATED NET INCOME Less Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE SODA POP ORGANICS COMPANY BASIC NET INCOME PER SHARE DILUTED NET INCOME PER SHARE AVERAGE SHARES OUTSTANDING Effect of dilutive securities AVERAGE SHARES OUTSTANDING ASSUMING DILUTION $43.854 17.211 $26.643 16549 671 $9.423 425 -395 514 497 $10.464 2654 $7.810 34 $7.776 $1,98 $1,95 3924 62 3986 ...
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Final Answer

Attached.

Soda Pop Organic Inc.
2013 Annual Report

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Table of Contents
Report Objective ........................................................................................................................................... 3
Overview of the Organization ....................................................................................................................... 3
Organization Background ...................................................................................................................... 3
Mission ..................................................................................................................................................... 4
Product Lines .......................................................................................................................................... 4
Organization’s Outlook and Future Investments .......................................................................................... 5
The Organization Financials ......................................................................................................................... 5
Revenue .................................................................................................................................................... 5
Assets ........................................................................................................................................................ 6
Liabilities ................................................................................................................................................. 6
Shareholders’ Equity .............................................................................................................................. 6
Financial Ratios ............................................................................................................................................ 7
Observation ................................................................................................................................................... 8
Assessment of the Financial Ratios........................................................................................................ 8
Financial Strategy, Financial Challenges, and Future Growth ........................................................ 10
Recommendation....................................................................................................................................... 11
References ................................................................................................................................................... 13

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Report Objective
This report examines the financial outlook of Soda Pop Organics Inc. It begins with an
overview of the company, the company's background, mission, and product lines. The report also
discusses the financials of the company; revenue, assets, liabilities, and shareholders' equity.
Additionally, it analyzes the primary financial ratios: profitability ratios, liquidity ratios, and
financial leverage ratios. This involves what they mean, their relevance, and various
stakeholders' perspectives. The report further explains the financial strategy of the company,
financial issues, and their impact on future growth. It ends with recommendations on the
necessary changes and how to encourage investors.
Overview of the Organization
Organization Background
Soda Pop Organics Inc.is, a fast-growing beverage company, headquartered in
Washougal, Washington United States. It was started in 2001 as a small local produce stand that
sold vegetables and fruits in Washington. Later, it joined a cooperative agreement of farmers that
included local producers of vegetables, and fruits. The cooperation allowed farmers to increase
their farm production by planting large farms and purchase advanced farm equipment. Therefore,
there was high revenue from farmers, and the organization expanded its investment. The
organization began producing organic soda drinks. In 2005, it decided to go public and was
incorporated as a publicly-traded company where shares of the company could be traded in the
US stock Exchange.
Ever since, the organization has expanded its product line with the introduction of new
products. Currently, it has over 20 products in development to meet the different needs of its
customers. It has more than 120,000 employees who are dedicated to producing the best soft

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drinks. The organization also...

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