About The Coca-Cola Company
The Coca-Cola Company is a total beverage company, and beverage products bearing its trademarks, sold in the United States since 1886, are now sold in more than 200 countries and territories. The Coca-Cola Company own or license and market numerous beverage brands, which group into the following categories: Trademark Coca-Cola; sparkling flavors; water, sports, coffee and tea; juice, value-added dairy and plant-based beverages; and emerging beverages. The Coca-Cola Company own and market several of the world s largest non-alcoholic sparkling soft drink brands, including Coca-Cola, Sprite, Fanta, Coca-Cola Zero Sugar and Diet Coke/Coca-Cola Light.
The Coca-Cola Company s success is its ability to connect with consumers by providing them with a wide variety of beverage options to meet their desires, needs and lifestyles.
Competition
In many of the countries, PepsiCo INC. is a primary competitor. Other significant competitors include, but are not limited to, Nestle S.A., Keurig Dr Pepper Inc., Danone S.A., Suntory Beverage & Food Limited, AB InBev, Kirin Holdings,Heineken N.V., Diageo and Red Bull GmbH.
FCFE Details of THE Coca Cola Company shown below, US$ in millions, except per share data, based on values on 10/10/2024
|
Year |
Value |
FCFE or Terminal Value |
Present Value at 10% |
|
0 |
FCFE0 |
12952 |
12952 |
|
1 |
FCFE1 |
14472= 12952 x (1+11.74%) |
13157 |
|
2 |
FCFE2 |
15715 = 12952 x (1+ 8.59%) |
12988 |
|
3 |
FCFE3 |
17065 = 12952 x (1+ 8.59%) |
12822 |
|
4 |
FCFE4 |
18062 = 12952x (1+7.01%) |
12473 |
|
5 |
FCFE5 |
19255= 17065 x (1+5.44%) |
11956 |
|
5 |
Terminal Value (TV5) |
445,241 = 14,013 x (1+5.44%) / (10% - 5.44%) |
276459 |
|
Intrinsic value of The CocaCola Company |
$352807 |
|
Market cap of THE Coca Cola Company. |
$2.98 Billion |
|
Intrinsic value of The CocaCola Company. common stock (per share) |
$81.88 |
|
Current share price on 10/10/2024 |
$69.25 |
Required rate of Return
Assumptions
|
Rate of return on LT Treasury Composite(Rf) |
4.36% |
|
Expected rate of return on market portfolio(E(RM) |
13.81% |
|
Systematic risk of Intuit Inc. Common stock (β) |
0.54 |
|
Required rate of return on Intuit Inc. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +0.59[13.81% - 4.36%] |
10% |
FCFE Growth rate (G) Forecast
THE Coca Cola Company. H-Model
|
Year |
Value |
g |
|
1 |
g1 (PRAT Model) |
11.74% |
|
2 |
g2 (Linear Interpolation) |
8.59% |
|
3 |
g3 (Linear Interpolation) |
8.59% |
|
4 |
g4 (Linear Interpolation) |
7.01% |
|
5 |
g5 (Single stage model) |
5.44% |
2023 Calculations
Retention rate = (Net income Dividends on common stock) / Net income
= (9,074 7,952) / 9,074
= 25.7%
Gross Profit Margin = 100 X Gross profit /Revenue
= 100 X 27,234/45,754
= 53%
Profit margin = 100 X Net income / Revenue
= 100 X 10,703 / 45,754
= 23.3%
Asset turnover = Revenue / Total Assets
= 45,754 / 97,703
= 0.49
Financial leverage = Total Assets / Stockholders equity
= 45,754/ 25,941
= 1.76
Return on Investment = 100 X Profit before interest and taxes/Capital employed
= 100 X 14,479/63,027
=23%
Sources :Form 10K of THE Coca-Cola Company for the fiscal year 2023, https://investors.coca-colacompany.com/financial-information/financial-results, https://www.stock-analysis-on.net/ , https://finance.yahoo.com/ , https://companiesmarketcap.com/
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