Finance

Financial Health

Daniel Ayala

May 20, 2012

ACC/230

Tonya Brewer

Financial Health

Coca Cola is one of the most famous soft drinks around the world. Coca cola is a publicly traded company that sells stock on Wall Street to generate revenue and cash flow. This company has a reputation for being an honest trustworthy company because of its long standing relationship with the public. Competitors are still chasing the success that coca cola has sustained over the years being the leading company for fountain soft drinks. The net income has been over several hundred million dollars for the last three years according to yahoo financial (finance.yahoo.com). Investors look for businesses like this to be able to grow as population grows and has a long history of existence proving that the business is not closing its doors any time soon.

Understanding the financial position of company is vital for an investor as well as the company management personal making financial decisions. The cash flow statement is the most known statement for investors. The cash flow shows how a business finances comes in and goes out. The balance sheet is second well known statement as it is a summary of all the statements combined. The third important statement to the investor and the company is the owner’s equity statement showing how much money the business has in the bank that is available for the owner or company use if need to if emergency. The debt to ratio is a tool that investors use to judge the financial position of a business to know, which way the company is heading in a position or negative cash flow. Being aware of all these statements and tools help investors and financial managers make decisions on if they want to invest with a specific company or for a business stand point to expand or reduce growth (Fraser, 2007).

The second most famous soft drink is Pepsi a major competitor to Coca Cola. Pepsi also is a publicly traded company that sells stock on Wall Street...