Chapter 8, Problem 9DYS

1.

To determine

Calculate the following measures for each of Company C’s operating segments (excluding Bottling Investments and Corporate):

Percentage of total net revenues, 2013 and 2014.

Percentage change in total net revenues, 2012 to 2013 and 2013 to 2014.

Operating income as a percentage of total net revenues (profit margin), 2013 and 2014

Explanation of Solution

Percentage of total net revenues, 2013 and 2014

	2014		2013
	Total net revenues	Percentage	Total net revenues	Percentage
Eurasia & Africa	$                   2,730	7.03%	$                    2,763	7.08%
Europe	$                   5,536	14.25%	$                    5,334	13.66%
Latin America	$                   4,657	11.99%	$                    4,939	12.65%
North America	$                 21,479	55.32%	$                  21,590	55.32%
Asia   Pacific	$                   5,746	14.80%	$                    5,869	15.03%
Eliminations	$                  (1,325)	(3.41%)	$                  (1,471)	(3.76%)
Total	$                 38,823	100%	$                  39,024	100%

Table: (1)

Percentage change in total net revenues, 2012 to 2013 and 2013 to 2014

	2014	2013	2012
	Total net revenues	Total net revenues	Total net revenues	Change 2013 to 2014	Change 2012 to 2013	Percentage 2013 to 2012	Percentage 2012 to 2013
Eurasia & Africa	$                   2,730	$                    2,763	$                  2,697	$                        (33)	$                          66	-1.19%	2.45%
Europe	$                   5,536	$                    5,334	$                  5,123	$                       202	$                        211	3.79%	4.12%
Latin America	$                   4,657	$                    4,939	$                  4,831	$                      (282)	$                        108	-5.71%	2.24%
North America	$                 21,479	$                  21,590	$                21,680	$                      (111)	$                        (90)	-0.51%	-0.42%
Asia   Pacific	$                   5,746	$                    5,869	$                  6,308	$                      (123)	$                      (439)	-2.10%	-6.96%
Eliminations	$                  (1,325)	$                  (1,471)	$                 (1,644)	$                       146	$                        173	-9.93%	-10.52%
Total	$                 38,823	$                  39,024	$                38,995	$                      (201)	$                          29	-0.52%	0.07%

Table: (2)

Operating income as a percentage of total net revenues (profit margin), 2013 and 2014.

	2014			2013
	Total net revenues	Operating income	Percentage	Total net revenues	Operating income	Percentage
Eurasia & Africa	$                   2,730	$                    1,084	39.71%	$                    2,763	$                     1,087	39.34%
Europe	$                   5,536	$                    2,852	51.52%	$                    5,334	$                     2,859	53.60%
Latin America	$                   4,657	$                    2,316	49.73%	$                    4,939	$                     2,908	58.88%
North America	$                 21,479	$                    2,447	11.39%	$                  21,590	$                     2,432	11.26%
Asia   Pacific	$                   5,746	$                    2,448	42.60%	$                    5,869	$                     2,478	42.22%
Eliminations	$                  (1,325)	—	0.00%	$                   (1,471)	—	0.00%
Total	$                 38,823	$                  11,147	28.71%	$                  39,024	$                   11,764	30.15%

Table: (3)

2.

To determine

Determine whether company C should attempt to expand its operations in a particular region of the world to increase operating revenues and operating income.

Explanation of Solution

The company C should attempt to expand its operations in Europe as the net revenues and operating income are high and are increasing year by year in Europe.

3.

To determine

List any additional information required to conduct the analysis.

Explanation of Solution

Additional information that is required to conduct the analysis of the study is:

1. Inventory valuation method of the company.

2. Data for the previous year of the company.

3. Data for the competitors company.