Southwest Airline

Angela D. Grubbs

Finc 5880

Webster University

Financial Analysis of Coca Cola

October 2010

PART I

INTRODUCTION

History

In 1886, Atlanta, Georgia passed prohibition legislation, and John Pemberton responded by developing Coca-Cola, a non-alcoholic version of French Wine Coca. The first sales were at Jacob’s Pharmacy in Atlanta, Georgia, on May 8, 1886. It was first sold as a patent medicine for five cents a glass at soda fountains, which were popular in the United States at the time due to the belief that carbonated water was good for your health. Pemberton claimed Coca-Cola cured many diseases, including morphine addiction, headache, and impotence.

By 1888, there were three versions of the beverage on the market. Asa Griggs Candler acquired a stake in Pemberton’s company in 1887 and incorporated it as the Coca Cola Company in 1888. Meanwhile, in the same year, while suffering from an ongoing addiction to morphine, Pemberton sold the rights a second time to four other businessmen. Meanwhile, Pemberton’s alcoholic son Charley Pemberton began selling his own version of the product.

John Pemberton declared the name “Coca-Cola” belonged to his son , Charley, but the other two manufacturers could continue to use the formula. In 1888, Candler sold his beverage under names Yum Yum and Koke. After both of these products failed to catch on, Ccandler set out to establish a legal calim to Coca-Cola in order to force his two competitors out of the business. Candler purchased exclusive rights from John Pemberton, Margaret Dozier, and Woolfolk Walker. In 1941, Dozier calimed that her signature on the slae had been a forgery. Subsequent analysis also indicate that John Pemberton’s signature was also a forgery.

In 1892, Candler incorporated a second company, The Coca-Cola Company ( current corporation). In 1910, Candler had the earliest records of the company burned, after gaining its legal origins. By the time of its 50th anniversary, the drink...