The Coca-Cola recipe was originally founded and formulated by John Pemberton at the Pemberton’s Eagle Drug and Chemical House. By 1885, the product was registered as a French Wine Coca as a patent medicine. Pemberton claimed Coca-Cola cured morphine addiction, dyspepsia, neurasthenia, headaches and impotence. The carbonated drink began its first sales at Jacob’s Pharmacy in Atlanta, Georgia on May 8, 1886 for 5 cents a glass with its first advertisement in the Atlanta Journal on May 29, 1886. It wasn’t until 1955 when cans of Coke started to make its first appearance (Official Coca-Cola website).
By the 21st century, Coca-Cola is proclaimed to be the world’s largest beverage company sold in more than 200 countries. …show more content…
As this would indicate the company is financially stable.
Quick Assets: 2011 2012
Cash $12,803 $8,442
Temporary Investments 1,088 5,017
Marketable securities 144 3092
Accounts Receivable 4,920 4,759
TOTAL QUICK ASSETS $18,955 $21,310
CURRENT LIABILITIES $24,283 $27,821
QUICK RATIO 0.78 0.77
Solvency and Leverage Ratios
Coca-Cola’s Times Interest Earned ratio for FY2011 and FY2012 were calculated by utilizing the company’s consolidated balance sheets to complete the following formula; ‘Income before income tax plus interest expense divided into the interest expense to reach the ratios of 28.5 and 30.7.
The times interest earned ratio is a metric used to measure a company’s ability to meet its debt obligations. The ratio indicates how many times a company can cover its interest charges on a pretax basis because failing to meet such obligations could force a company into bankruptcy. Ensuring interest payments to debt holders and preventing bankruptcy depends mainly on a company’s ability to sustain earnings. The higher the times interest earned ratio, the more likely is that company able to meet its interest payments. Coca-Cola obviously meets this ability.
(In millions) 2011 2012
Income before income tax $11,458