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Why this company was chosen

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1
Liquidity or Solvency Ratios
Formulae
2012 2011
a)
Current Ratio = Current Assets = 1.09 1.05
Current Liabilities
The Ideal current ratio is 2:1, the companies ratio is low than the ideal ratio and it indicates
that the company needs to improve its short term solvency position.
b)
Quick Ratio = Current Assets – Inventory = 0.87 0.78
Current Liabilities
The Ideal Quick ratio is 1:1, and the companies ratio is lower than the ideal.
The company needs to improve position to meet the immediate short term obligations.
2
Capital Structure Ratios
a)
=
Debt
= 0.44 0.43
Equity
The low ratio indicates that the company has a strong equity position and is using less leverage. (Only Long Term Debt are considered)
3
Interest Coverage Ratio
=
EBIT
= 27.15 24.40
Interest
EBIT = Earnings before Interest and Tax
Generally, this ratio should be more than 1, the companies' interest coverage ratio is high and
it indicates that the company is in a good position to meet its financial cost obligations
4
=
Earning available for Equity Shareholders
=
2.00 1.88
No. of Shares Outstanding
P/E Ratio =
MPS
= 17.60 17.60
EPS
5
Profitability Ratio
a)
=
Gross Profit
= 60.32% 60.86%
Sales
The ratio has decreased from the year 2010 to 2012 by 3.54%
RATIO ANALYSIS OF THE COCA-COLA COMPANY
Earning Per Share
Gross Profit Ratio
Interest Coverage
Ratio
Ratio
Debt Equity Ratio

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b)
Net Profit Ratio =
Net Profit
= 18.92% 18.58%
Sales
The net profit has reduced by almost 15% over the span of 3 years

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