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Liquidity Ratio Analysis

 Current Ratio = Current Assets / Current Liabilities

2007 = 12105 / 13225


.915

2008 = 12176 / 12988


.937

Interpretation:
Liquidity is actually that in how much time the asset can be converted into
cash. So the liquidity rate is growing in case of 2008.

 Quick Ratio = Current Assets – Inventory / Current Liabilities

2007 = (12105 – 2220) / 13225


.747

2008 = (12176 – 2187) / 12988


.769

Interpretation:
It is manufacturing concern so quick ratio must be taken into account more
than any ratio and it must has the value of 1 whereas the company is having values of .
747 and .769 which is alarming for the company but still Coke is improving the ratio
which is in favor of the Coke survival.

Activity Ratios Analysis


 Account receivable turn over = Net Sales / Avg. a/c Receivables

2007 = 28857 / 3317


8.69

2008 = 31944 / 3090


10.33

Interpretation:
The value of account receivable is better for the organization when it is
larger. The company a/c receivable turn over has increased from 8.69 to 10.33 means that
in 2007 its account receivable turned 8.69 times into cash but in 2008 they turn 10.33
which is good for the firm.

 Inventory Turn over = C.G.S / Inventory

2007 = 10406 / 2220


4.68

2008 = 11374 / 2187


5.20

Interpretation:
The objective for managing the inventory is to turn over inventory as
quickly as possible without losing sales from stock. So the turn over is increasing which
is good for the company.

 Total Asset Turn over = Sales / Total Sales

2007 = 28857 / 43269


.667

2008 = 31944 / 40519


.788

Interpretation:
Total asset turn over indicates the overall efficiency with which the firm
uses its assets to generate sales. The higher the turn over then higher the efficiency by
using assets.

Profitability Ratios

 Gross Margin = Gross Profit / Sales

2007 = 18451 / 28857


.639

2008 = 20570 / 31944


.643

Interpretation:
Gross margin measures the % of each sales amount remaining after the
firm has paid for its goods. So the profit margin is increasing which is beneficial for
Coke.

 Net profit margin = profit after taxes / Sales

2007 = 5981 / 28857


.207

2008 = 5807 / 31944


.181

Interpretation:
The margin is reduced because the profit margin is the measure of
firm success with respect to earn on sale.

Debt Ratios
 Debt ratio = debts / total assets * 100

2007 = 3277 / 43269


.0757

2008 = 2781 / 40519


6.86

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