Report on Financial

Analysis
Submitted To:
Madam Nosheen Sarwat

Submitted By:
Ubaid-Ur-Rehman Khan Khakwani
Roll# BE.10.52

Rabbia Khan
Roll# BE.10.23

Addas Najam
Roll# BE.10.64

Amina Fahem
Roll# BE.10.20

Institute of Management Sciences

BAHAUDDIN ZAKARIYA UNIVERSITY, MULTAN.

Table of Contents
Submitted To:.................................................................................................................................. 1
Submitted By: ................................................................................................................................. 1
ACKNOWLEDGEMENTS ............................................................................................................ 4
PREFACE ....................................................................................................................................... 5
INTRODUCTION .......................................................................................................................... 6
COCA- COLA COMPANY IN PAKISTAN ................................................................................ 6
The Coca-Cola Company................................................................................................................ 7
The Coca-Cola System ................................................................................................................... 7
OUR WINNING CULTURE .......................................................................................................... 9
OUR VALUES ............................................................................................................................. 10
Objective ....................................................................................................................................... 10
A SHORT HISTORY OF COCA COLA COMPANY ................................................................ 11
MULTAN BEVERAGES LIMITED ........................................................................................... 14
BRANDS OF THE COCA-COLA COMPANY....................................................................... 14
PRODUCTS.................................................................................................................................. 17
COCA COLA IN PAKISTAN ..................................................................................................... 17
Logos in order ............................................................................................................................... 18
ORGANIZATION HIERARCHY ................................................................................................ 19
SPAN OF OPERATIONS ............................................................................................................ 19
FINANCIAL ANALYSIS ............................................................................................................ 20
HORIZONTAL AND VERTICAL ANALYSIS.......................................................................... 27
SWOT ANALYSIS ...................................................................................................................... 29
EXTERNAL ANALYSIS............................................................................................................. 33
2

PEST ANALYSIS ........................................................................................................................ 34

REPORT CONCLUSION ............................................................................................................ 37
REPORT SUGGESTIONS ........................................................................................................... 38
REFERENCES ............................................................................................................................. 40

ACKNOWLEDGEMENTS
First of all We are thankful to Almighty Allah who gave me knowledge and power to
make me able to complete our report successfully.
I am also thankful to Madam Nosheen Sarwat and my Institute of Management Sciences
Bahauddin Zakariya University Multan who provide me this opportunity to have an
experience in a reputed organization and groom myself for the future professional
responsibilities.
I offer my heartiest tribute and cordial gratitude to present my thanks to Mr.Zaheer Ashaf
HR Manger of Coca cola beverages Multan and Mr. Imran Hashim Sales & distribution
Manager of Coca cola beverages Multan for their kind support and cooperation in this
project.

PREFACE
At the master level, the students, after the completion of their studies have to face a lot of
difficulties and problems as they are entering a completely new phase of their lives that is
the practical field in simple, due the vast difference between theoretical and practical
work. To avoid such discrepancies the students of BBA are given the opportunity to not
only visit various business organizations but also to work there and gain firsthand
experience at the process and method in which these different organizations function.
The purpose of the practical training is to increase the know how of the students
regarding the virtual jobs of different business organizations of the country. It is also
included in the charter of Project Report that the students go through actual systems of
the management which prevail in the various business organizations. It is also necessary
to enhance their managerial capabilities include and comprehensive manner in respect of
various managerial opportunities.
The preparation and submission of this Project Report is essential for all the students of
BBA. This Report on coca cola beverages Pakistan covers more or less all the aspects
regarding the structural organization, working system, overall growth of the company
considering the fact that the report is meant to give an overview of the coca cola
beverages Pakistan & its major operations and strategies.

INTRODUCTION
Coca-Cola Company was founded in 1886 in Atlanta by JOHN PEMBERTON. The
Coca-Cola Company is the world's leading manufacturer, marketer, and distributor of
nonalcoholic beverage concentrates and syrups. The Company's flagship brand and over
230 other Company soft-drink brands are manufactured and sold by The Coca-Cola
Company and its subsidiaries in nearly 200 countries around the world.
Company manufactures beverage concentrates and syrups and, in certain instances,
finished beverages, which they sell to bottling and canning operations, authorized
fountain wholesalers and some fountain retailers. They also market and distribute juice
and juice-drink products.

COCA- COLA COMPANY IN PAKISTAN

The coca-cola company started his business in Pakistan in 1960. All business activities in
Pakistan are monitored by The coca-cola export corporation (TCCEC). Head office of
TCCEC is in Karachi at that time but now-a-days it is shifted to Lahore. But this TCCEC
only monitored business activities, this company issued license for plants in different
cities of Pakistan to start production according to company standard. In 1990 decided for
acquisition worldwide. Actually they are operated their business through joint venture,
6

now they decided for acquisition. Thats why in 1996 The coca-cola company buys the
Karachi plant, at that time TCCEC decided to form a new company to monitor the
operation of bottling in Pakistan. So coca-cola beverages Pakistan limited (CCBPL) is
the company which is responsible to monitor the operations of bottling in Pakistan. Some
time people says that there is no difference in CCBPL and TCCEC, but the basic
difference between both companies is that CCBPL is responsible for bottling operations
and TCCEC is responsible for marketing and corporate decision worldwide.

The Coca-Cola Company

The Coca Cola Company operates in more than 200 countries and markets more than 500
brands and 3,500 beverage products. These products include sparkling and still
beverages, such as waters, juices and juice drinks, teas, coffees, sports drinks and energy
drinks. We have four of the worlds top five nonalcoholic sparkling
beverage brands: Coca Cola, Diet Coke, Fanta and Sprite.

The Coca-Cola System

We are a global business that operates on a local scale in every community where we do
business. We are able to create global reach with local resources because of the strength
of the Coca Cola system, which comprises our Company and our bottling partners
nearly 300 worldwide. Our Company sources ingredients; manufactures and sells
concentrates, beverage bases and syrups to our bottling operations; owns the brands; and
is responsible for consumer brand marketing initiatives. Our bottling partners and some
Company operations manufacture, package, merchandise and distribute the finished
branded beverages to our customers and vending partners, who then sell our products to
consumers. Our bottling partners work closely with customersgrocery stores,
7

restaurants, street vendors, convenience stores, movie theaters and amusement parks,
among many othersto execute localized strategies developed in partnership with our
Company. Through effective collaboration, we are able to sell our products to consumers
at a rate of 1.7 billion servings a day.
The Coca Cola system is not a single entity from a legal or managerial perspective, and
the Company does not own or control most of our bottling partners. In October 2010, we
acquired the North American operations of Coca Cola Enterprises Inc. (CCE) and sold
our Companys Norway and Sweden bottling operations to a new entity, Coca Cola
Enterprises, Inc. (New CCE). The Company does not have any ownership interest in New
CCE. We believe this acquisition will result in an evolved franchise system that will
enable us to better serve the unique needs of the North American market. The creation of
a unified operating system will strategically position us to readily market and distribute
our products in North America. Coca cola Beverages Pakistan.

MISSION, VISION & VALUES

The world is changing all around us. To
continue to thrive as a business over the next
ten years and beyond, we must look ahead,
understand the trends and forces that will shape
our business in the future and move swiftly to
prepare for what's to come. We must get ready for tomorrow today. That's what our 2020
Vision is all about. It creates a long-term destination for our business and provides us
with a "Roadmap" for winning together with our bottling partners.

OUR VISION
Our vision serves as the framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth.
People: Be a great place to work where people are inspired to be the best they can be.
Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and
satisfy people's desires and needs.
Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
Productivity: Be a highly effective, lean and fast-moving organization.
Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
Partners: Nurture a winning network of customers and suppliers, together we create
mutual, enduring value.

OUR MISSION
Our Roadmap starts with our mission, which is enduring. It declares our purpose as a
company and serves as the standard against which we weigh our actions and decisions.

To refresh the world.

To create value and make a difference.

To inspire moments of optimism and happiness.

OUR WINNING CULTURE

Our Winning Culture defines the attitudes and behaviors that will be required of us to
make our 2020 Vision a reality.
9

OUR VALUES
Our values serve as a compass for our actions and describe how we behave in the world.
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, it's up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well
Objective
The ultimate objectives of our business
strategy are to increase volume, expand our share of worldwide nonalcoholic ready-todrink beverage sales, maximize our long-term cash flows and create economic-valueadded by improving economic profit. The Coca-Cola system has more than 16 million
customers around the world that sell or serve our products directly to consumers. We
keenly focus on enhancing value for these customers and helping them grow their
beverage businesses. There are nearly six billion people in the world who are potential
consumers of our Company's products. Ultimately, our success in achieving our mission
depends on our ability to satisfy more of their beverage consumption demands and our
ability to add value for our customers. We achieve this when we place the right products
in the right markets at the right time.

10

A SHORT HISTORY OF COCA COLA COMPANY

This is the remarkable story about the evolution of an iconic brand

and the company that bears its name. Since its birth at a soda
fountain in downtown Atlanta, Georgia, in 1886, Coca Cola has
been a catalyst for social interaction and inspired innovation.
These unique moments in history, arranged in chronological
sequence, have helped create a global brand that provides billions of moments of
refreshment every day.
In 1886 the trademark "Coca-Cola" name and script are registered with the U.S. Patent
and Trademark Office. Dr. Pemberton's partner and bookkeeper, Frank M. Robinson,
suggested the name and penned "Coca-Cola" in the unique flowing script that is famous
worldwide today. In 1891 Atlanta entrepreneur Asa G. Candler acquires complete
ownership of the Coca-Cola business for $2,300. Within four years, his merchandising
flair helps expand consumption of Coca-Cola to every part of the nation and in 1893 the
trademark "Coca-Cola" name and script are registered with the U.S. Patent and
Trademark Office. Coca-Cola began as a fountain product, but candy merchant Joseph A.
Biedenharn of Mississippi offering bottled Coca-Cola, using syrup shipped from Atlanta,
during this especially busy summer. In the duration of 1894 to 1906 the Company
outgrows its facilities and a new building is erected at Edgewood Avenue and College
Streetlater to be called "Coca-Cola Place." This year, the Company enters the markets
of Canada and Mexico. Large-scale bottling becomes possible when Asa Candler grants
exclusive rights to Joseph B. Whitehead and Benjamin F. Thomas of Chattanooga,

11

Tennessee, for one dollar. The contract marks the beginning of The Coca-Cola
Companys unique independent bottling system that remains the foundation of Company
soft-drink operations. Within 20 years, the regional bottling system will grow to include
1,000 bottlers, with operations in Cuba, Puerto Rico, Panama, the Philippines and Guam.
Then Cuba and Panama become the first two countries outside the U.S. to bottle CocaCola. After 18s around this time, bottles used by companies in the soft-drink industry are
very similar. And Coca-Cola has many imitators, which consumers are unable to identify
until they take a sip. In 1919 the Coca-Cola Company is sold for $25 million to Atlanta
banker Ernest Woodruff and a group of investors. The same year, the Company's stock is
first sold to the public at $40 a share. One of these original shares was worth about $6.7
million at the end of 1998 (assuming all dividends were reinvested).
In 1928 Annual bottled Coca-Cola sales exceed fountain sales for the first time. Also this
year, Coca-Cola makes its first Olympic appearance when 1,000 cases of Coke
accompany the U.S. Olympic Team to Amsterdam. 1929 Sixty-four bottling operations
are located in 28 countries, spreading refreshment worldwide. Also this year, the fountain
glass is adopted as standard, and "The Pause that refreshes" first appears in the Saturday
Evening Post. In 1936 The Coca-Cola Company observes its 50th anniversary. A threeday bottlers' convention, a motion picture chronicling the Company's early years, and
even a special anniversary logo are part of the celebration. In 1945"Coke" is registered as
a trademark by the U.S. Patent and Trademark Office. 1961Sprite, the lemon-lime drink,
is introduced to the public. 1977 The unique contour bottle, familiar to consumers
everywhere, is granted registration as a trademark by the U.S. Patent and Trademark
Office, an honor awarded to only a few other packages. 1979 Coke introduces "Have a

12

Coke and a Smile," a campaign of heartwarming emotion best captured by the television
commercial featuring "Mean" Joe Greene, a tackle on the Pittsburgh Steelers football
team. 1982 The Coca-Cola Company introduces diet Coke to U.S. consumers, marking
the first extension of the Company's most valuable trademark to another product. And the
"Coke is it!" theme is translated and tailored to reach consumers everywhere as it is
launched worldwide. In the year 1985 April, after extensive taste testing, the Company
introduces a new taste for Coca-Cola in the United States and Canada"new" Coke.
Consumers respond with an unprecedented outpouring of loyalty and affection for the
original formula, and the Company listens. In the year of the Company's 100th
anniversary, two large U.S. bottlers combine to form Coca-Cola Enterprises. Over time,
this new company will assume responsibility for bottling operations in Great Britain,
France, the Netherlands and Belgium. In 1988 an independent worldwide survey
confirms that Coca-Cola is the best known, most admired trademark in the world. In 1989
The Coca-Cola Company sells Columbia Pictures to Sony Corporation. World of CocaCola, an attraction featuring a historical and futuristic look at Coca-Cola as well as a
chance to sample The Coca-Cola Company products from around the world, opens in
Atlanta. After this, Coca-Cola sponsors the Summer Olympics in the hometown of The
Coca-Cola Company: Atlanta, Georgia. And the Cisneros Bottling Company, the largest
soft-drink bottler in Venezuela, switches from Pepsi to Coca-Cola. Now sales of CocaCola and other Company products exceed 1 billion servings per day.

13

MULTAN BEVERAGES LIMITED

Multan Beverages was established in year 1964 on Vehari road as a franchised unit for
Coca-Cola Company. It supplies soft drink facilities to the people of Multan, D.G. Khan,
Vehari and Khanewal.
Initially it produced Coca-Cola only and at that time its production capacity was 35
bottles per minute. In early 80s the plant was modified, thus increased its capacity up to
180 bottles per minute, then plant had the capacity to produce 320 bottles per minute and
company also started production of Fanta and Sprite. It has engaged in a contract of
producing Simba. In 1988, the liter bottle was introduced, which was greatly appreciated
by the customers.
Present Multan Beverages has modified their plant with double line process and is
producing 2*320 bottles per minute, due to the crying need of the customers.
Now, the factory produces 75% of Coke, 20 % Sprite, 4% Fanta while no return and liter
bottle has only 1% share in the overall production. The factory has the empty bottle stock
of 400,000 bottles. The Multan Beverages has installed a new flexible plant, producing
all sizes.

INTRODUCTION OF THE ORGANIZATION

BRANDS OF THE COCA-COLA COMPANY
The Coca-Cola Company offers nearly 400 brands in
over 200 countries, besides its name Coca-Cola
beverage. Tab was Coca-Cola's first attempt to
develop a diet soft drink, using saccharin as a sugar
substitute. Introduced in 1963, the product is still sold

14

today, however its sales have dwindled since the introduction of Diet Coke.
The Coca-Cola Company also produces a number of other soft drinks including Fanta
(introduced circa 1942 or 1943) and Sprite. Fanta's origins date back to World War II
when Max Keith, who managed Coca-Cola's operations in Germany during the war,
wanted to make money from Nazi Germany but did not want the negative publicity.
Keith resorted to producing a different soft drink, Fanta, which proved to be a hit, and
when Coke took over again after the war, it adopted the Fanta brand as well. The German
Fanta Klare Zitrone ("Clear Lemon Fanta") variety became Sprite, another of the
company's bestsellers and its response to 7 up.
During the 1990s, the company responded to the growing consumer interest in healthy
beverages by introducing several new non-carbonated beverage brands. These included
Minute Maid Juices to Go, Powerade sports beverage, flavored tea Nestea (in a joint
venture with Nestle), Fruitopia fruit drink and Dasani water, among others. In 2001,
Minute Maid division launched the Simply Orange brand of juices including orange
juice.
In 2004, perhaps in response to the burgeoning popularity of low-carbohydrate diets such
as the Atkins Diet, Coca-Cola announced its intention to develop and sell a lowcarbohydrate alternative to Coke Classic, dubbed C2 Cola. C2 contains a mix of high
fructose corn syrup, aspartame, sucralose, and Acesulfame potassium. C2 is designed to
more closely emulate the taste of Coca-Cola Classic. Even with less than half of the food
energy and carbohydrates of standard soft drinks, C2 is not a replacement for zero-calorie
soft drinks such as Diet Coke. C2 went on sale in the U.S. on June 11, 2004, and in
Canada in August 2004. C2's future is uncertain due to disappointing sales.

15

Coca-Cola is the best-selling soft drink in most

countries. While the Middle East is one of the only
regions in the world where Coca-Cola is not the number
one soda drink, Coca-Cola nonetheless holds almost
25% market share (to Pepsi's 75%) and had double-digit
growth in 2003. Similarly, in Scotland, where the
locally produced Irn-Bru was once more popular, both
Coca-Cola and Diet Coke now outsell Irn-Bru. In Peru, the native Inca Kola has been
more popular than Coca-Cola, which prompted Coca-Cola to enter in negotiations with
the soft drink's company and buy 50% of its stakes. In Japan, the best selling soft drink is
not cola, as (canned) tea and coffee are more popular. As such, the Coca-Cola Company's
best selling brand there is not Coca-Cola, but Georgia.
The company announced a new "negative calorie" green tea drink, Enviga, in 2006, along
with trying coffee retail concepts Far Coast and Chaqwa. On May 25, 2007, Coca-Cola
announced it would purchase Glaceau, a maker of flavored vitamin-enhanced drinks
(vitamin water), flavored waters, and energy drinks, for $4.1 billion in cash. On
September 3, 2008, Coca-Cola announced its intention to make cash offers to purchase
China Huiyuan Juice Group Limited (which has a 42% share of the Chinese pure fruit
juice market) for US$2.4bn (HK$12.20 per share). China's ministry of commerce blocked
the deal on March 18, 2009, arguing that the deal would hurt small local juice companies,
could have pushed up juice market prices and limited consumers choices.

16

PRODUCTS
In October 2009, Coca-Cola revealed its new 90-calorie mini can that holds 7.5 fluid
ounces. The first shipments are expected to reach the New York City and Washington
D.C. markets in December 2009 and nationwide by March 2010. The main product range
is as fellows:

Coca-Cola

Sprite

3G

Diet coke

Fanta

Fanta Orange

Zero Coke

Minute Maid (Pulppy,orange,lemon)

Kinely(water)

COCA COLA IN PAKISTAN

The Coca-Cola Corporation entered in Pakistan
market in 1953 after purchasing local plant located
in Karachi, Hyderabad, Gujranwala, and Sialkot.
Now Company has 10 manufacturing plants in
Pakistan. These are located in:

Karachi

Hyderabad
17

Lahore

Sialkot

Gujranwala

Multan

Faisal abad

Rawal pindi

Peshawar

Rahim Yar Khan

The company has plants to purchase more plants in the country to get a good hold in the
market and compete the rival Pepsi. Devaluation of Pak rupee also affects the industry
because one of the ingredients concentrate is imported from out side the country.

Logos in order

18

ORGANIZATION HIERARCHY
Hierarchy of the organization are started from the top level of management which are
shown below

SPAN OF OPERATIONS
The Coca-Cola Company operates in more than 200 countries and markets more than
500 brands and 3,500 beverage products. These products include sparkling and still
beverages, such as waters, juices and juice drinks, teas, coffees, sports drinks and energy
drinks. We have four of the worlds top five nonalcoholic sparkling beverage brands:
Coca-Cola, Diet Coke, Fanta and Sprite.
Global Workforce

139,600

North America

3,800

Coca-Cola Refreshments

66,900

Latin America

2,100

19

Bottling Investments

10,300

Europe

2,500

Bottling Investments

11,200

Eurasia & Africa

2,400

Bottling Investments

7,400

Pacific

2,500

Bottling Investments

30,500

Corporate associates are included in the geographic area in which they work. Bottling
Investments is an operating group with associates located in four of our geographic
operating groups. Numbers are approximate and as of December 31, 2010.
FINANCIAL ANALYSIS
Balance sheet of 2009- 2010
Period Ending

Dec 31, 2010

Dec 31, 2009

Cash And Cash Equivalents

8,517,000

7,021,000

Short Term Investments

2,820,000

2,192,000

Net Receivables

4,430,000

3,758,000

Inventory

2,650,000

2,354,000

Other Current Assets

3,162,000

2,226,000

Total Current Assets

21,579,000

17,551,000

Long Term Investments

7,585,000

6,755,000

20

Property Plant and Equipment

14,727,000

9,561,000

Goodwill

11,665,000

4,224,000

Intangible Assets

15,244,000

8,604,000

Accumulated Amortization

Other Assets

2,121,000

1,976,000

Deferred Long Term Asset Charges

Total Assets

72,921,000

48,671,000

Accounts Payable

9,132,000

6,921,000

Short/Current Long Term Debt

9,376,000

6,800,000

Other Current Liabilities

Total Current Liabilities

13,721,000

Long Term Debt

5,059,000

Other Liabilities

2,965,000

Deferred Long Term Liability Charges

1,580,000

Minority Interest

547,000

Negative Goodwill

Total Liabilities

41,918,000

23,872,000

Misc Stocks Options Warrants

Redeemable Preferred Stock

Preferred Stock

21

Common Stock

880,000

880,000

Retained Earnings

49,278,000

41,537,000

Treasury Stock

(27,762,000)

(25,398,000)

Capital Surplus

10,057,000

8,537,000

Other Stockholder Equity

(1,450,000)

(757,000)

Total Stockholder Equity

31,003,000

24,799,000

Net Tangible Assets

4,094,000

11,971,000

Currency in USD.

FINANCIAL RATIOS:
LIQUIDITY RATIOS
CURRENT RATIO
= Current asset/current liabilities
C.R 09= $17551/$13721
=1.28
As the current ratio is more than one so it is acceptable .we can say that our assets are
more than liabilities that can cover them.
C.R10= $21579/$18509
=1.19
In this current ratio is more than one so it is acceptable this companys current assets are
more to cover current liabilities. If we compare the current ratios of 2009 and 2010 we

22

can say that the ability of company to meet its short term financial obligation is going
down. But both are acceptable because they are more than one.

QUICK RATIO
= (current asset-inventories) / current liabilities
Q.R09 = ($17551-$2354) /$13721
=1.1
As this ratio is more than one which shows that companys assets can easily meet the
financial obligations of company so it is acceptable.
Q.R10= ($21579-$2650) / $18509
=1.0211
In 2010 the quick ratio was also more than one so in this year company was also able to
meet with its short term financial liabilities with their current asset. So it is acceptable for
it. If we compare the quick ratio of 2009 and 2010 than we can say that companys ability
to meet its short term financial liability goes to decreasing due to increase in the liabilities
as compared to its assets.

ACTIVITY RATIO
Inventory Turnover Ratio
= Cost of gods sold / inventory
Inventory turn over 09= $11088/$2354
=4.71 times
As inventory turn over ratio measures the activity of firms inventory which is 4.71 times
so it is acceptable for the company.
Inventory turn over10=$12693 / $2650
23

=4.78 times
If we compare the inventory turn over the company than we can say that in 2010
inventory turn over was more than 2009.due to increase in the cost of good sold.

AVERAGE COLLECTION PERIOD

= Account receivable / AVG sale per day
Average Collection Period09 =$ 3758 / $86.03
=43 days
As average collection period is meaningful with the credit term as the credit term of the
company is 60 days so it is acceptable one.
Average Collection Period10 = $4430 /$ 97.55
=45 days
If we compare both we can say that 2009 is more acceptable than 2010.

TOTAL ASSET TURNOVER

= Sale / total assets
Total Asset turnover 09 = $30990 / $48761
=0.636 times
Total Asset turnover10 = $35119 / $72921
= .48 times
Asset turn over ratio in 2010 is more than the 2009.it is due to increase in the sale as
compared with increase in the asset in 2010.

24

LEVERAGE RATIO
Time interest earned ratio
= Earning before interest and taxes / total interest
Time interest earned ratio09= $8231 / $249
= 33
Time interest earned ratio10 = $8449 / $317
= 26.65
As we see in 2009 AND 2010 we can conclude that 2009 was more profitable than
2010.in 2009 earning before interest and tax was more as compared to the 2010.

PROFITABILITY RATIO
Gross profit margin
= (Sales- Gross profit) / sales
Gross profit margin09 = ($30990-$19902)/ $30990
= 35.77%
Gross profit margin10 = ($35119-$22426) / $35119
= 36.14%
As we see that gross profit margin was increasing in the 2010 it is due to increase in the
sale companys product.

OPERATING PROFIT MARGIN

= operating profit / sales
Operating profit Margin09 =$ 8231 / $30990
= 26%
Operating profit Margin10 = $8449 / $35119
= 24%
25

Operating profit margin was going to decrease in the 2010 .it was due to increase in the
expenses as compared with the increase in the profit.

NET PROFIT MARGIN

=Earning available for stockholder / sales
Net profit margin09 = $6824 / $30990
= 22 %
Net profit margin10 = $11809 / $35119
= 33 %
As the companys net profit margin was increasing in 2010 .it was due to reason was
company was above the economies of scale.

EARNING PER SHARE

=Earning available for stock holders / no. of share outstanding
Earning Per share09 = $6824 / $2314
= 2.94
Earning Per share10 = $11809 / $2308
= 5.11
If we see that EPS in 2010 was more than the 2009.it was due to increase in the sale.

RETURN ON ASSETS
=Earning available to common stock holder / total asset
Return on Assets09=$6824 /$48671
= 14%
Return on Assets10 = $11809 / $72921
= 16%
26

According to these ratios we can conclude that in 2010 return on asset was more than
2009.it was due to increase in the sale and achieving the economies of scale.

RETURN ON EQUITY
= Earning available to common stockholders / stockholder equity
Return on equity09 = $6824 /$24799
= 27%
Return on equity10 = $11809/$31003
=38%
These ratios stated that in 2010 stockholders earn more than 2009.

HORIZONTAL AND VERTICAL ANALYSIS

HORIZONTAL ANALYSIS
The horizontal analysis of the coca Cola Company is given below.
Heads

2009

2010

Cash and cash equivalents

100%

121 .30% Increase

Short term investment

100%

125.91% increase

Marketable securities

100%

222.58% increase

Goodwill

100%

276.16% increase

Loan and notes Payable

100%

120.70% increase

Accrued income taxes

100%

103.4% Increase

Long term debt

100%

277.54% Increase

Deferred income taxes

100%

269.7%

Capital surplus

100%

117.8%

Increase/decrease

Increase
Increase
27

Inventories

100%

112.57% Increase

Prepaid expense and other assets

100%

140.43

Other assets

100%

107.33% Increase

Trademarks

100%

102.8%

Increase

Increase

Vertical Analysis
Vertical analysis of different heads are given below
Cash and cash equivalent = (cash equivalent/total current asset)
=8517/21579
=39.46%
Marketable securities

= (marketable securities/total current Asset)

= 138/21579
= .639%

Inventories

= (inventories / total current assets)

= 2650/21579
=12.28%

Account payable &

Accrued expense

= (account payable accrued expense / Total current

liabilities)
= 8859/18508
=47.86%
Loans note payable

(Loans note payable / Total current liabilities)

= 8100/18508
= 43.76%

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Accrued income taxes

= (accrued income taxes / Total current liabilities)

=273/18508
= 1.47%

Long term debt

= (long term debt / total equity)

=14041 / 31317
=44.83%

Deferred income taxes

= (Deferred income taxes / total equity)

= 4261 / 31317
= 13.60%

SWOT ANALYSIS
After studying the CCBPL strategies, and its performance I have identified some
strengths, weakness, opportunities and threats.

STRENGTHS
CCBPL POSITIVE IMAGE
CCBPL has positive image and reputation in the minds of customers so far them its a
great strength because its helps in the sale of their products.
FINANCIAL STRENGTH OF THE BUSINESS
The Beverages business is financially very strong as mentioned by present annual report.
ESTABLISHED NATION- WIDE INFRA-STRUCTURE
The CCBPL business has established nation-wide infrastructure. It has network of dealers
in all over the country, which will help in the sale of companys products.

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UP TO DATE TECHNOLOGY
CCBPL has up to date technology in its production. As coca-cola company claims that
they are very sensitive about hygienic conditions, so thats why they using up to date
technology to achieve this objective.
QUALITY
CCBPL claim continuous quality products to their customer.
MULTINATIONAL CULTURE
Coca-Cola Company is multinational culture so thats why they know about different
culture, this is strength for CCBPL.

WEAKNESS
DISTRIBUTION NETWORK
The major weakness of CCBPL business is that they dont have complete distribution
network. They just have distributors in different cities which carry their products and then
retailers have to use their own means to get bottles from those distributors and then make
it available for sale for the customer.
NON AVAILABILITY
Coke is not available in small towns and in rural areas, reason being that the Distribution
channel of Coke is not large, is not extended owing to limitations of Resources and lack
of proper infrastructure.
LIMITED CAPACITY OF MULTAN PLANT
Multan Plant has on two lines to depend on which is only for 250ml and 1000 ml and for
other product it has to depend on other plants and this makes shortage of products and
delay in the lead time.

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FORMALITY OF RULES AND REGULATIONS:

The organizational structure of Coke is too formal ( being supervised by CCI),so the
lengthy processes of decision making and implementation through hierarchy system (i-e
follow order from CEO to downwards) have to be followed and employees in Pakistan
even (GM) is not allowed to take decisions to change even smallest of things like
(Instruction on bottle) on their own .So many brilliant ideas to improve and boost sales
remain locked up in employees brain as they are not allowed to work at their own will.

OPPORTUNITIES
INCREASE QUALITY AWARENESS AMONG THE CUSTOMERS
One of the greatest opportunities for CCBPL is that now a days people are very much
conscious about the quality. As CCBPL is producing high quality product so it will
increase the demand of companys so it is a great opportunity for CCBPL.
BILLION CASES MARKETS
Another opportunity for CCBPL is that Pakistan is billion cases market. From which
CCBPL covers only millions. So its big opportunity for CCBPL that they have big
market.
EMERGING MARKET
Coke currently holds about 30% market share in Pakistan. Pepsi leads by holding 60% of
market share 10% to other small beverages e.g. RC- cola, Maka-Cola, Pak-Cola etc. So,
there is vast opportunity for Coke to capture 70% market share.
Coca-Cola with International standards can increase its market share many folds with
little efforts. Increasing distributing channels and infrastructure to ensure availability in
small towns and areas, line extension like Fanta, Coke, and Sprite in different flavors,

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launch a new product. It can do it successfully as its is well established, Company and
has already positioned itself in customers mind (as those who provide the ultimate in taste
and quality) so they are bound to try their new product as well.

THREATS
Pepsi and its products as it is market leader so time to pose a serious threat to coke.
NEW ENTRANTS:
New entrants like Makka-Cola, Pak Cola , GOURMET COLA that can exploit anti
Jewish and anti war sentiments, provoke nationalism sell at low price and thus can be a
source of threat for Coke in future once they fully launch their product in Pakistani
market so Coke management has to look out for them over time.
NESTLE PRODUCTS:
Like juices, Milo cold coffee, drinks, etc as well as Sheezan products e.g. squashes, tetra
pack juices are also sort of threat but not the direct threat for Coke because they provoke
health consciousness and physical fitness. Although Coke has converted their attack on
health issues by offering Diet Coke yet the threat isnt over. However Coca-Cola can
effectively counter their threat at any time by launching their own juice.
TAXES (GOVT. LAWS AND POLICIES):
The Coca-Cola management is not happy with the Govt. tax laws and policies. Being a
multinational with whole plants in 10 cities it is under heavy tax .Imposition so much so
that on single bottle revenue. It has to pay as much as Rs2.97/- as tax to the government.

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EXTERNAL ANALYSIS
FORCES ANALYSIS
THREAT OF NEW ENTRANTS
CCBPL is enjoying No.2 position in beverages industry they are having 30% of total
market share. They do not consider now entrant as threat for themselves. But from last
two or three years many local companies launch new beverage products.
THREAT OF EXISTING RIVALRY
CCBPL has to compete with a large number of beverage makers. But the threat is from
one major competitor. This competitor is Pepsi cola International. Pepsi is having market
share of 35% - 40% of the beverage market. Their hot selling brand is seven up. And
GORMET cola also threat for coca-cola because they are expanding with the passage of
time.
THREAT OF SUBSTITUTES
There are not many substitutes available for the beverages products. For past few years
there is an increasing trend of use of fresh juices and instant drink. But CCBPL do not
think that they are under any threat as far as substitutes are concerned.
BARGAINING POWER OF BUYERS
Bargaining power of buyer is a considerable threat for CCBPL because many competing
brands are available in the market. It is necessary for CCBPL to satisfy their customers as
far as price and quality is concerned. Otherwise the customers will switch to other brands.

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PEST ANALYSIS
Whenever the government is considered to be stable, the business
will flourish. If there is political stability in the country the
policies and strategies made by Coke can be consistent to be
implemented. Foreign companies are also keen to invest in those
countries which are politically stable where they have no fear of decline in their market
share or shut down due to sudden change of government
In mixed economy government and private sector both plays their role in developing the
economy of the country. Investment by foreign companies like Coke is more likely to
flourish in mixed economy.
Government has given copy rights to Coke so that another company cannot sell their
product by the name of Coke. The countries where laws are formulated, the strategies and
activities of the company are different.
Cokes social responsibility is to provide its customers with clean and hygienic product
so to do this they have increased the use of disposable bottles.
If the income level or per capita income of the people increases, it will have a positive
effect on the consumption of coke.
If the country faces inflationary trend in the market, the price of the Coke will ultimately
increase which will lower its demand.
Pakistan is a consumption oriented society. Due to demonstration effect the people are
more inclined towards consumption than saving. So the people of Pakistan spent heavily
on food items. Hence COKE has a good market share in the present circumstances.

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It means how much is in the hands of rich and poor class. In Pakistan 10% rich people
posses 93% of wealth and 90% people posses 7% of wealth. If there is balanced
distribution of income in the country, the consumption of the people will increase hence
increasing the sales of beverages as well.
As the use of plastic money is increasing the consumption pattern of the people are
increasing. Although it will have a low affect on the consumption of Coke.
As employment opportunities increase the living standard of the people increase and the
people consume more.
In case of Coke, aggregate demand of the product increases in the season of summer as
the hot weather makes the consumers want to drink more.
In summer season to cope up with the increasing demand they have to increase the
aggregate supply of their product.
Some of the economic policies which can affect the market of coke are discussed below:
It is the policy of taxes. If heavy tax is levied on Coke then its price will rise having
negative affect on its consumption.
Monetary policy is made to restrict or increase the supply of money in the market. If
policies are made to restrict the flow of money in the market, inflation can be controlled
hence increasing the real income of the people which will ultimately affect the
consumption of Coke.
If price of Coke is increased its demand will decrease and vice versa.
If income of the people will increase their purchasing power will increase and then the
market share of Coke will also increase.

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It is a combination of demographic and psychological factors. Psychological attributes

mean how you perceive things. The company will focus on the behavior of consumers
and make different changes in their product quantity or quality and in promoting their
product so that they can attract the customers. Keeping in view that the behavior of
different consumers is not alike they have to make their marketing strategies in
accordance with their requirements so that they are convinced to buy the product.
Religious factors can influence the market sales of Coke as it happened in 2003 when the
U.S-led attacks on Iraq, wide sections of society in Pakistan have banned American
multinationals Coke and Pepsi.
Coke is a well renowned brand. People who are brand conscious will not drink beverages
of lesser known brands such as Amrat cola. They will try to show their status by drinking
Coke which is known to all as a quality drink.
It is a very important factor for marketing. Media these days is a very effective way of
inspiring people to buy a specific product. A good promotion can boast up sales to a great
extent.
Through research and development quality of the product can be improved or better
techniques or machinery can be developed which can increase the production. When
technology is advance the supply of the product increase hence the company experiences
growth in their business.

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REPORT CONCLUSION
During my visit at Coca-Cola and discussing about operations management with the
product manager, I conclude that they are fulfilling their requirements and meting their
present demand level. But they have large cushion available to meet the increased
demand. The demand of Cola is Ok, but as far as Sprite is concerned, their demand is
quite low, so the management should emphasis on different promotional strategies to
increase to increase the demand of their products. They are doing all the forecasting
manually. Software is available but not utilizing properly there. Graphs are available to
control quality. Planning is made on monthly, basis yearly basis and 3-year plans are also
there. But it largely depends upon the executive decision, expert system are not used.
They adopt reactive policy and chase the demand, whatever might be the demand. They
are in a position to meet it.

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Their holding and ordering cost minimum because; they contract with their suppliers for
a year and received the inventory in lots as per requirement. Discounts are received on
total way to minimize ordering and holding cost. For quality control, they adopt a
modified form of ISO 9000.
Financial data of the company shows that it is in the good running condition and earning
more profits. If we compare the financial ratios of 2009 and 2010 we come to know that
earning profit is greater in 2009 because in 2009 earning before interest and taxes was
greater as compared to 2010. In 2010 expenses was greater.
Coca-Cola has strong goodwill and reputation image for their consumers and looking to
build more goodwill of their products by making strategies as they are making now. They
should keep on make product differentiation strategy for their customers. Its sale is
increasing through sales promotion. The price has fluctuations according to the
competitors offerings. Coca-Cola is second leading product in Pakistan and they can
become leading product in near future.

REPORT SUGGESTIONS

Company should built effective distribution system with professional sales force.

Equally check on the market to see the good supply in market.

Company should built good relations with shop keepers especially to retailer by
offering some good schemes.

Good medical facility should be given within production plant so that employees
feel themselves secure.

Govt. of Pakistan should review the taxation policy.

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Company should try to improve their product image which is not good especially
in Multan market especially about 3G.

Importance should be given to good display in the market.

Deletion program should be implemented rapidly.

The dealership network should be widened.

Employees should be encouraged to give suggestions.

Efforts should be made for better utilization of capacity.

The corporation should provide more opportunities to their employees to rise.

Employees should be given credit and incentives according to their performance
and abilities.

Management of CCBPL should arrange different lectures for its staff from time to
time about current market trends and situations.

Local worker should be preferred.

Branch of Sales Department should be setup in plant to provide the selling

facilities to the local agents & dealers.

Company should increase its profit margin by decreasing its expenses beause as
compared to 2009 expenses are greater in 2010 and profit margin is less.

2010 is not more profitable as compared to 2009 because earning before interest
and taxes is greater in 2009 so company should decrease its expenses to increase
its profit.

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REFERENCES
Mr. Imran Dogar (Sales & Marketing Manager)
Mr. Muhammad Sabir (Areas sale manager)
www.coca.cola.com
Search from google

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