Comparative income statements and balance sheets for Coca-Cola are shown below (
ID: 2688707 • Letter: C
Question
Comparative income statements and balance sheets for Coca-Cola are shown below ($ millions)
Income Statement Year 2 Year 1
Revenues
Net Sales $20,092 19,889
Cost of Sales 6,044 6,204
Gross Profit 14,048 13,685
Selling, general, and administrative 7,893 9,221
Deprication and amortization expense 803 773
Interest expense (revenue) (308) 292
Income Before tax 5,660 3,399
Income tax expense 1,691 1,222
Net Income 3,969 2,177
outstanding shares 3,491 3,481
Balance sheet
Cash $1,934 1,892
Accounts receivable 1,882 1,757
Inventories 1,055 1,066
other current assets 2,300 1,905
Total Current Assets $7,171 6,620
Plant & equipment, at cost 7,105 6,614
Accumulated Depreciation 2,652 2,446
Net property plant and equipment 4,453 4,168
Other long term assets 10,793 10,046
Total Assets $22,417 20,834
Liabilities and Equity
Account Payable $3,679 3,905
Short term debt &
Current maturities on long term debt 3,899 4,816
Income tax liabilities 851 600
Total current liabilities $ 8,429 9,321
Deferred income taxes & other liabilities 1,403 1,362
Long term debt 1,219 835
Total other liabilities $ 2,622 2,197
Shareholder's Equity
Common Stock 873 870
Capital surplus 3,520 3,196
Retain Earnings 20,655 18,543
Treasury stock 13,682 13,293
Total Shareholders' Equity 11,366 9,316
Total Liabilities and shareholders' equity $22,417 $20,834
a. Use the following ratios to prepare a projected income statement, balance sheet and statement of cash flows for year 3.
Sales Growth 1.02 %
Gross profit margin 69.92 %
Selling, general and administrative expense/sales 39.28 %
Depreciation expense/ Prior year PPE gross 12.14 %
Interest expense/Prior year long-term debt 5.45 %
Income tax expense/Pretax income 29.88 %
Accounts receivable turnover 10.68
Inventory turnover 5.73
Accounts payable turnover 1.64
Taxes payable/Tax expense 50.33%
Total assets/Stockholders equity 2.06
Dividends per share $1.37
Capital expenditures/Sales 5.91 %
b. Based on your initial projection, how much external financing (long-term debt or stockholder's equity will Coca Cola need to fund its growth at projected increases in sales?
Explanation / Answer
answer =7491.58.
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