preview

Factors That Affect The Company Financial Condition Of The Coca Cola Company

Decent Essays
No one ratio can be perfect for a company. Sometimes, an error can be depended of the manager’s decision of how to management the company. Other cases, the company can be exposed to potential fraud and this issue has to be considered in the audit plan.
Risk Factors
Companies are subject to risks and uncertainties and The Coca Cola Company is not exempt of this. There are many factors that can affect the company financial condition. I’m including and analyzing some factors that can be useful for the judgment of others.
According to The Coca Cola 10-K, these are the fallowing risks that the company can face:
• “Increased competition and capabilities in the marketplace could hurt our business”. This beverage industry is highly competitive. Since Pepsico is the primary competitor, it is necessary to continue with the good marketing strategy and new innovations to maintain the global market.

• “Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results.” Since the company is worldwide, “the company earn revenue, pay expenses and incurred liabilities” (Item 1A pag 13) using foreign currencies. This factor can be affected because the presentation of the financial statements are presented in U.S. dollars and the exchange rates can increase or decrease the value of the U.S. dollar. And consequently, affect “net operating revenues, operating income and the value of balance sheet” (Item 1A pag 13).

• “If interest rates increase,
Get Access