Coca-Cola Company’s International Financial Management Free Writing Sample

Introduction

International Financial Management (IFM) is an integral part of any company that has positioned its operations on the global market (Madura, 2020). This may explain why Coca-Cola is interested in the concept of the IFM to manage international finances and maximize shareholder wealth. Furthermore, the idea is of value since it connects the company with international dealings in the form of business partners, customers, and suppliers. By and large, the dividend distribution policy, net profit value, and profitability index have to be efficient so that Coca-Cola can thrive and compete in the global market.

Critical analysis

Coca-Cola’s Dividend Distribution Policy

Coca-Cola is in strong collaboration with its shareholders, who own its shares and, therefore, receive revenue for their investments. According to the Dividend Irrelevance theory, the company’s dividend payment should not add value to the stock price; however, Coca-Cola has done it for a long time and still seems to maintain high growth. This is due to the fact that the company pays dividends to reduce managerial excess cash consumption (Sulaimon, 2014). The fact that the brand can stay afloat and return the financial contributions to the company’s growth, no matter the setbacks that may happen within the organization, shows Coca-Cola’s imposing financial abilities (Macro Trends, 2022). To elaborate, the company is mainly focused on increasing the stock price by balancing the future growth and current shares owned by the shareholders. By and large, the company’s dividend policy is sustainable as it continues to rise annually because of the constantly increasing revenues of the company.

As stated, the company is consistent in paying dividends to its shareholders, which indicates the efficiency of Coca-Cola’s strategy. Therefore, Coca-Cola claims that it recompenses the dividends to the stock owners on a quarterly basis. Furthermore, it is visible that the price for the share has increased from 0.37$ to 0.42$ since 2017, meaning that it has increased by 13% over five years (The Coca-Cola Company, 2022; Macro Trends, 2022; CNBC, 2022). As a matter of fact, 44% of the company’s ownership is in free float, owned by different people that invest in the company’s success (Coca-Cola Europacific Partners, 2022). On the contrary, only 19.5% is owned by Coca-Cola itself, which means that the other 80% share people who do not directly relate to the company and its products (Coca-Cola Europacific Partners, 2022). All in all, the shareholders’ shares, which accumulate approximately 80%, are investments that are then returned with additional monetary bonuses.

Therefore, having analyzed Coca-Cola’s dividend distribution policy, it is reasonable to claim that this strategy is efficient within this business model because it allows sustaining and even maximizes the revenues. Furthermore, the investments can be used to adjust the design to any situations that may unexpectedly happen in the company. The funds that flow into the company from the shareholders can also be used to expand the company’s operations worldwide, open new branches, and deliver the items to the many countries in cities. In other words, considering that the company always has investments, it is able to maximize its revenues by adjusting its strategy and, as a result, paying dividends from the earnings. Overall, it means that the company can thrive with the financial help of the shareholders and simultaneously return their investments with additional bonuses for their contribution to the company’s success.

Efficient Market Hypothesis Theory in context of Coca-Cola

Coca-Cola’s collaboration accomplishments with the shareholders may relatively undermine the efficient market hypothesis (EMH). However, to prove that this investment theory does not apply to Coca-Cola, it is vital to research its market share (Teall, 2018; Thune, 2021). To be more exact, the EMH primarily focuses on the impossibility of the market being wrong about a company’s stock worth (Teall, 2018). In other words, it concludes that market prices accurately reflect the true value of shares (Thune, 2021). However, it might not always be the case due to many visible and hidden factors affecting the stock market and the company itself.

Naturally, to understand how Coca-Cola can support or undermine the EMH, a thorough market stock analysis is essential. A perfect example of both Coca-Cola’s outstanding accomplishments on the stock market and EMH’s possible contradictions is the professional history of investor Warren Buffett. In fact, Buffett is a prominent opponent of the EMH and proved its unreasonableness both practically and theoretically with the help of Coca-Cola’s case (Reiff, 2018). His conclusions stem from the stock market crash that happened in 1987 when he bought more than $1 billion of stock in the Coca-Cola company (Reiff, 2018). The prices during such problems with stock markets drop to a minimum, so many people opt for purchasing the stocks, but they do not always earn from such decisions.

Therefore, the risk that Buffett took could have turned out either exceptionally or dreadfully, and the fact that he, as a promising investor, decided to support Coca-Cola financially. Fortunately, such a decision granted huge revenues to Buffett, considering that Coca-Cola’s shares increased in price almost by 20 times (Reiff, 2018). As a matter of fact, a year after the stock market crash, one share of the company cost 2.45$, and in 30 years, it grew to 42.7$ (Reiff, 2018). Not only did Buffett earn a massive amount of money from his investments, but he also now holds more than 10% of all the shares of the company (Reiff, 2018). Overall, it supports the fact that Coca-Cola was worth more than estimated by its stock price, despite lacking attractive valuations at the time of the market crash, leading investors to earn substantial money from their financial contributions to the corporation.

Therefore, Coca-Cola appears to be a successful company as it not only financially benefits its shareholders but also approves the longevity of the investments. The so-called Berkshire’s portfolio, which Buffett filled with his investments cases, included only two longest-standing leading companies, one of which remained to be Coca-Cola (Reiff, 2018). As mentioned earlier, Buffett was focused on proving EMH wrong, and the fact that he invested 1 billion dollars in Coca-Cola proves the corporation to be an outstanding option for investments. The negative repercussions of the stock market share in 1987 did not severely affect Coca-Cola but, on the contrary, helped it grow to be even more successful. The company’s brand name is powerful nowadays as the company manages to support twenty different brands, “bringing in a total of over $1 billion in sales per year a piece” (Reiff, 2018, para. 5). Furthermore, Coca-Cola’s shares continue to grow, accumulating approximately 60.1$ now, which is 7$ more compared to the last-year prices (Google Finances, 2022). By and large, Coca-Cola seems indeed a surefire investment as it partially opposes EMH, meaning it can increase shareholders’ investments despite the theory.

Methods of Appraising Projects which Coca-Cola Use

Coca-Cola being on the worldwide market is open to investments in other promising brands and focuses on encouraging shareholders to own the stocks of their corporation (Coca-Cola Investments, 2022). Naturally, both aspects require investment appraisal, which shows the profitability of financially contributing to any corporation (Schmidt, 2017). To be more exact, Coca-Cola primarily concentrates on collecting contractual cash flows and the sales of financial assets (Coca-Cola Consolidated, 2022; Coca-Cola Investments, 2022). Apart from analyzing the exchange rate fluctuations and the impairment, Coca-Cola also uses the Internal Rate of Return (IRR) method of appraising projects (Coca-Cola HBC, 2022). The IRR is essential to calculating the profitability of the possible investment opportunities to increase the revenues of the company considerably (Schmidt, 2021; Coca-Cola HBC, 2022). Theoretically speaking, as the discount rate, the IRR value turns the net present value (NTP) into zero, which eventually concludes the expected annual rate of return on a project (Schmidt, 2021). Coca-Cola opts for this method to calculate the financial benefits for their company after investing in specific projects or brands.

The IRR metric can sometimes prove to be unreliable; however, there are ways to avoid that. IRR may be misinterpreted outside of the typical capital budgeting scenario (Schmidt, 2017). However, it is feasible to determine the estimated projects’ annual return accuracy by combining this metric with a company’s Weight Average cost of Capital (WACC) (Schmidt, 2017). Therefore, the IRR method is helpful in investigating the scale of financial flows and their timing. In other words, Coca-Cola is more interested in evaluating the time value of money for investment opportunities (Coca-Cola FEMSA, 2021). In addition, the company focuses on the basic acceptance rule of the IRR, which relies on the cost of capital (Coca-Cola FEMSA, 2021). The cost of capital should never be higher than IRR; otherwise, the company may suffer from financial losses (Coca-Cola FEMSA, 2021). By and large, the following of the rules and a thorough analysis of investment opportunities help Coca-Cola increase its revenues and sometimes build new bonds for future collaborations.

Furthermore, Coca-Cola tends to use the IRR method because of its numerous advantages and the simplicity of the whole calculation process. The simple measurement techniques are probably one of the main reasons why Coca-Cola uses the IRR approach and not other methods of investment appraising (Coca-Cola FEMSA, 2021). Consequently, the corporation can easily convey a rank project to choose the investment opportunity that is the most profitable for Coca-Cola (Carmichael, 2021). In fact, as the measurement of the expected annual rate of return is beyond easy, Coca-Cola can analyze numerous projects in short periods of time (Carmichael, 2021). Another benefit for the company is that this approach measures the time value of money to evaluate the profitability of the project, which allows Coca-Cola to understand what revenue they can expect and after what time.

Conclusion

To sum up, Coca-Cola appears to be a top-tier corporation in its market nowadays. The fact that the financial contributions of shareholders benefit not only the company itself but them directly in the form of increased revenues says a lot about Coca-Cola as a company. Moreover, its outstanding stocks and market rates are sometimes higher than the average among Coca-Cola’s competitors, which contradicts the efficient market hypothesis and once again proves the brand’s success. The company’s focus on investment projects deserves respect, as Coca-Cola is beyond careful about choosing the projects to support financially, which shows the company’s experience in the global market. Using the IRR approach in conjunction with WACC, the corporation can analyze numerous projects simultaneously and then select one to pursue to increase its revenues for future projects or expansion on the market accurately.

Reference List

Carmichael, C. (2021) Understanding Coca-Cola’s capital structure (KO). [online] Investopedia. Web.

CNBC (2022) Coca-Cola’s stock price (KO) in real time. [online] CNBC. Web.

Coca-Cola Consolidated (2022) Investor relations. [online] investor.cokeconsolidated.com. Web.

Coca-Cola Europacific Partners (2022) Listing & share information | Coca-Cola Europacific Partners. [online] ir.cocacolaep.com. Web.

Coca-Cola FEMSA (2021) Financial statements. [online] pp.1–115. Web.

Coca-Cola HBC (2022) Results, reports & presentations. [online] Coca-Cola HBC Group Website.

Coca-Cola HBC (2022) Why invest in Coca-Cola HBC? [online] Coca-Cola HBC Group Website.

Coca-Cola Investments (2022) Investor relations – Coca Cola İçecek. [online] www.cci.com.tr. Web.

Google Finances (2022) Coca-Cola Co (KO) stock price & news. Web.

Macro Trends (2022) CocaCola – 58 year dividend history | KO. [online] www.macrotrends.net. Web.

Madura, J. (2020) International financial management. Cengage Learning.

Reiff, N. (2018) How rich would you be if you followed Warren Buffett into Coca-Cola? [online] Investopedia. Web.

Schmidt, R. (2017) What is IRR and how does it work? [online] Propertymetrics.com. Web.

Sulaimon, B.A. (2014) Capital Structure and Dividend Policy; Two Sides of a Coin. Academia.

Teall, J.L. (2018) Market efficiency. Financial trading and investing, pp.325–367. Web.

The Coca-Cola Company (2022) Dividends. [online] The Coca-Cola Company. Web.

Thune, K. (2012) Efficient markets hypothesis (EMH). [online] The Balance. Web.

Color In “Superman For All Seasons” Book By Loeb

Superman for All Seasons is a renowned comic piece around the world. The story surrounds the life and personal experiences of Clark Kent: an abnormal fellow who enters planet Earth from a foreign one, Krypton. The young boy lands in a meteor-like spaceship that falls close to Smallville, Kansas, on a wheat plantation belonging to local agriculturalists named Jonathan and Martha Kent. The farmers pick up and adopt the boy, treating him as a gift from God, where they give him the name Clark Kent. As such, Mr. and Mrs. Kent sooner realize that Clark is not a normal human being through the various actions that the adopted son performs.

The first of such moves is when the young child rescues his foster father, Jonathan, from a tractor accident, by lifting the tractor using a single hand after the jack slips. Clark grows into a superman as his parents speculate during his young age. The boy becomes a family savior and a rescuer of the human generation throughout the different plotline issues.

Color usage across the various plotline issues of the narrative portrays essential symbolism and thematic facets that indicate Clark’s development from childhood into an adult superman. The present work purposes of depicting the authors’ use of color to portray aspects like emotion and to develop the main character’s growth aspect. This involves how he evolves from childhood, through school life, and later into the fierce community defender with the ability to stop missiles, change river courses, and bring back life by reversing time. There exist different classifications of color as utilized in designing. Using hue to classify color, for example, leads to the realization of three broad classes of color, including warn, cool, and neutrals (Malloy 59). Moreover, color is also classified into primary and secondary groups based on pigmentation and originality.

All these categories have different meanings as utilized in art and design. For example, warm colors, mainly red and orange, depict aspects like energy, power, and danger. Similarly, artists and authors use warm colors to lead the observers’ eyes, especially when the warm colors combine with cool and neutral shades, primarily for backgrounds.

Analyzing color utilization and its meaning in Superman for All Seasons can take several developments. Studying the use of different shades in the various issues of the narrative, for instance, provides a wealth of information that readers can use to comprehend the protagonist’s development and change with time. Better still, looking at the color usage in specific pages of the work further provides crucial information that contributes to understanding the narrative’s theme.

The first issue of the story, for example, exhibits a suitable combination of warm and cool colors. The case mainly describes Clark’s growth from childhood to high school and then as a news writer. Color utilization on pages 2 and 5 of issue #1, for instance, depicts the character’s youngness and the general feeling of a challenging future for the community, which explains the reason for Clark’s existence. In the two pages, the author provides a cream-yellow background that fights the color grey. Yellow and cream are the shades of early morning sunlight (Malloy 64); thus, they imply hope, energy, and happiness. Yellow is also a bright color, the most brilliant among the warm colors category.

The use of yellow color on pages 2 and 5 of plotline issue #1 seeks to imply the overpowering of the dark, grey near future that the community will face under the likes of Luthor. Yellow is also the dominant color on page 2 of the first issue. The shade overcomes the other primary color, blue, to imply a brighter future and the energy possessed by superman, who is at the introductory stage of the narrative. Red shade further dominates superman’s image on the first page of the first issue. The superman on this page utilizes most of the space, while blue and red colors show him being more significant than the village beneath him.

The use of such primary colors in the introductory phase of the story purposes to help the reader understand the central theme of the narrative, abnormal power that exceeds that of a standard human (Mehl 154). During the remaining bit of issue #1 of the storyline, the color of Clark’s clothing remains cool, primarily light blue, implying responsibility and calmness.

The use of more warm colors in issue #2 of the narrative’s plotline implies the immediate need for Clerk to utilize his superhuman abilities. The story now approaches its climax, and the protagonist must start showing his superhuman abilities. The excessive use of warm color, relative to issue #1, indicates Clark’s readiness to undertake his primary mission of saving humanity (Osborne 39). For example, on pages 1, 4, 5, 6, 7, 9, 10, 16, and 19 of issue #2 of the story’s plot, Clark appears above the seemingly tiny village with his fists folded, ready to act. The character is flying through space with the enormous red cloth on his back serving as the energetic wings that carry him along.

Clark’s clothing has a significant amount of red color; this implies power, energy, warfare, passion, and love. He is ready to act out of his love for humanity, justice, and fairness, as shown by the large red cloth that serves as wings for him. The superman symbol on his chest is also in red, which implies the same things as the red wings. Almost all the remaining bit of the hero’s body is blue, which symbolizes responsibility, peace, and spiritual connection (Malloy 179). According to Brebbia, white is the subject of purity, virtue, and cleanness (156). This aspect is elaborated in the dire need for superman’s intervention in the city’s region is further shown by a white background.

Page 1 of issue #3 of the plotline uses color to imply the climax in superman’s warship to maintain peace on Earth. The image combines red and black colors to create the overdeveloped Clark with overgrown body muscles. The whole body is black, while the superman symbol on the chest uses red and yellow colors that match the red cloth that the hero uses as wings. The change from a blue body into a black body depicts Clark’s readiness to spend energy to save humanity (Agoston 89). The red and yellow colors further imply energy and power. White sparks of energy also appear to fall from the luminous orange sky towards the dark distant city. They are corrupted by the evils of immoral people like Luthor, the black figure on page 31 of issue #3 of the plotline.

Conquering the dark forces in issue #3 allows Clark to regain his normal body color, blue top, with red and yellow shades present to imply peace, energy, and power, respectively, in issue #4. Pages 28 and 33 of the fourth issue further present Clark’s overgrown power through the extensive red cloth that acts as his wings, allowing him to restore peace in the city by defeating Luthor and other ill players. The cloth’s size and location in the pages are large enough to mast the other elements present. The issue thus uses color to symbolize the realization of the superhuman theme in the narrative. Arguably, the narrative lacks meaning without the wise application of color used for symbolism and thematic development.

Works Cited

Agoston, George. Color Theory and Its Application in Art and Design. Berlin: Springer-Verlag, 2018.

Brebbia, Carlos A. Color in Art, Design & Nature. WIT Press, 2018.

Malloy, Kaoime. The Art of Theatrical Design: Elements of Visual Composition, Methods, and Practice. Routledge, 2019.

Mehl, Richard. Playing with Color – 50 Graphic Experiments for Exploring Color Design Prin. Rockport Publishers Inc., 2017.

Osborne, Roy. Renaissance Colour Symbolism. Lulu Com, 2019.

Risk Management And Project Success

Risk management is a system that includes management strategies and tactics to achieve key business goals. The purpose of risk management in the field of economics is to increase the competitiveness of economic entities by protecting against the implementation of net risks (Segal, 2022). Risk management in an ideal organization should be integrated into all processes and should be an integral part of any decision-making process. In practice, a separate unit often carries out risk management, which leads to its detachment from key business processes. Risk management should be carried out at different levels of management – this will allow the company to best control risks and take preventive measures. That is why risk management should be an integrated, not an independent, system within the organization.

The greatest attention to risk management should be paid when making decisions on the most critical issues for the development of the organization. This is to be implemented in strategic planning and changes in company policies, in implementing new projects, processes, and procedures before significant financial investments or optimization activities. From the practical point of view, risk management can be divided into areas of its application, which correspond to all possible areas of the organization (Duggan, 2019). Among these are strategic and operational planning, budgeting; resource planning, and asset management; changes in organizational business processes related to technology or management; research and development; environmental risks. Risk management strategy is the art of dealing with a versatile range of possible issues of the enterprise in uncertain economic situations, which is based on forecasting risks and implementing methods to reduce them. The balance between risky practices and potential positive outcomes is a golden rule of risk management (Moerk & Studdert, 2021). For instance, environmental risk can be accepted if the company and the whole market will benefit from the related practice in the long run.

References

Duggan, T. (2019). Why is risk management important to project success? Chron. Web.

Moerk, B., & Studdert, J. (2021). Environmental risk management during COVID-19. Clyde & Co. Web.

Segal, T. (2022). Common methods of measurement for investment risk management. Investopedia. Web.

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