Finance

Module 1, Case Assignment

Publicly Traded Companies under Review:

1. The Coca-Cola Company – a production company

2. Google, Inc. – an Internet service provider

3. Yahoo! Inc. – an Internet service provider

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As can be seen in the comparison of selected financial results chart above, The Coca-Cola Company although generating a great deal more income than both Google and Yahoo combined, has less cash available to pay its debts, than the two service companies, with only $12B dollars in current (Quick) assets available during 2007 to offset $13B dollars in current debts.

Both Google and Yahoo for the same year were in a better financial position to meet their current financial obligations, with Google having $4B in current assets to meet $2B in debt, and Yahoo! having a $3B current asset cushion from which it can pay of its $2B in debt.

At first glance, one would think that The Coca-Cola Company experienced financial difficulty during 2007. However, a second look at the chart above reveals that as a parent company of subsidiary bottlers throughout the world, that The Coca-Cola Company generated almost $6B in net income (highlighted in the company’s change in non-current assets), while both Google and Yahoo had significantly less such non-current assets from which to draw support.

In terms of increasing or decreasing its investment in its operations, it can readily been seen in the chart below that The Coca-Cola Company spent a great deal more of its net cash used in investing activities than either Google or Yahoo during 2007 to shore up its non-current asset base.

Although Yahoo spent over 195 percent more cash in investing activities during 2007 than it did in 2006, The Coca-Cola Company’s cash expenditures for investing activities rose more than 295 percent over prior year figures, while Google spent less (more than 47%) over its prior year’s results.

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In terms of operational...