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Coca Cola Cost Analysis Essay

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COCA COLA COMPANY

Research Project

For
ACC 412

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Overview of Coca-Cola

Leading the beverage industry for the third consecutive year, Coca-Cola, a common household name known around the world, climbs to the 4th spot in Fortune's 50 Most Admired Companies in the world for year 2012. When it comes to a refreshing cold soda, who does not know of Coca-Cola? The company was established in 1886 in Atlanta, Georgia at the Jacobs' Pharmacy soda fountain by pharmacist John Pemberton. In its humble beginning, a glass of this drink costed only five cents and only 9 glasses of Coca-Cola were sold each day. Since then, Coca-Cola has grown to be a multi-billion dollar company. Employing approximately 139,600 …show more content…

High-Low Method: The highest revenue is $12,737,000, and the lowest is $6,103,000. The highest GDP is $ 15,321,000, and the lowest is $13,759,000. From the y = mx + b formula (where "y" is Revenue and "x" is GDP), we have m = 4.247 and b = -52,331,287. Projection of Sales Revenue Equation: Revenue = 4.247 * GDP - 52,331,287 According to the High-Low method, sales revenue and GDP has a positive relationship. This translates to revenue is increased when GDP is increased. For every dollar increase in GDP, sales revenue will increase by 4.247 dollars.
2. Simple Linear Regression Equation: Projection of Sales Revenue Equation: Revenue = 3.3679 * GDP - (3.978*107) The relationship between sales revenue and GDP is also positive: For each additional GDP in the country, the amount of sales revenue increases 3.3679 dollars. In other words, as GDP increases, the spending in the country also increases which results in the increase of sales revenue. Next we examine the relationship between sales revenue and real interest rate: Revenue = (4.169*107) – 2,791,339 * real interest

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