Spring 2024
Financial Statement Analysis Project
Component 2 – Team Cross-Sectional Analysis
A) While reviewing the individuals reports, similarities were found in the products sold by Mondelez
International, Inc. (MDLZ), Coca-Cola Consolidated, Inc. (COKE), and The Coca-Cola Company
(KO) are all companies that sell a product that its buyer can consume while Levi Strauss & Co.
(LEVI) is a company that sells apparel which sets it apart from the rest of the companies. Comparing
these companies based on their total revenue as shown in Exhibit A1 you can see that KO has the
largest total revenue, coming out to $45.8 Billion. MDLZ, whose total revenue comes out to be
$36.02 Billion. Then COKE follows up with a total revenue of $6.6 Billion. Finally in our group the
company with the smallest amount of total revenue is LEVI with a total of $6.2 Billion. You can see
this information listed down below in Exhibit 1 in order of the greatest total revenue. Comparing these
companies based on their growth in revenue as shown on Exhibit A2 you can see that MDLZ has
grown 14.35%. The company that has the second biggest growth in revenue is COKE, which has a
growth of 7%. Then KO follows with a growth of 6.39%. Finally, LEVI has a growth of 0.17%
making it the smallest growth out of all these companies. You can see this information below in
Exhibit 2 listed in order of greatest growth in revenue.
B) The four companies represent distinct industries and exhibit various levels of profitability in 2023.
KO, a global beverage giant, enjoys high profit margins, with a gross profit margin of 59.52% as
shown in Exhibit B1. COKE, the largest Coca-Cola bottler in the United States, operates in a more
cost-intensive segment. This company has lower gross and operating profit margins at 39.06% and
12.54%, respectively, due to the expenses associated with bottling, distribution, and logistics. The
lower pre-tax and net profit margins of 8.38% and 6.14% further indicate the impact of operational
costs and fluctuating raw material prices on its profitability. Although COKE complements KO, its
profitability is constrained by its role in the distribution and bottling process. MDLZ, a leading snack
and confectionery company, reported moderate profitability, with a gross profit margin of 38.22%, an
operating profit margin of 15.28%, a pre-tax profit margin of 16.33%, and a net profit margin of
13.79%. However, MDLZ operates in a highly competitive industry where fluctuations in commodity
prices can impact profitability. LEVI had a gross profit margin of 56.89% but lower operating and net
profit margins of 5.71% and 4.03%, indicating high marketing and distribution costs. The apparel
industry's challenges, including changing consumer trends and supply chain disruptions, contribute to
Levi's lower profitability, with competition from fast-fashion brands impacting its bottom line.
C. To analyse solvency between companies, interest coverage ratio was used. Interest coverage ratio
measures a company’s ability to cover its interest expenses along with its operating income. A higher
, ratio indicates better ability to meet interest obligations. Among the four companies we analysed, the
company with the highest solvency is Coca Cola Company (KO) at 7.41. It was the only company
with a positive interest expense, meaning that they did have interest expense. The other companies
had interest income instead. There was a large and notable deviation with Coca Cola Consolidated
(COKE). The had a interest coverage ratio of –607.8. This implies that the company’s operating
income is significantly lower than its interest expenses, and that this company would be able to meet
its debt obligations. MDLZ and LEVI also have concerning interest coverage ratios at –17.75 and –
7.69 respectively. They are both still operating at a loss and having trouble generating income
exceeding their interest expenses. Overall based on interest coverage ratios, all companies except KO
are in serious risk of not fulfilling and debt obligations if they were to arise.
To analyse liquidity, the current ratio was used. This ratio considers current assets and current
liabilities and aims to find out if a company can meet its short-term obligations, hence only
considering current accounts. If a current ratio is above one, it indicates that a company has greater
current assets than current liabilities and are therefore adequate to cover short- term obligations. If a
company's current ratio is less than one, their liabilities are greater than their assets and they might
have problems in meeting short term obligations with their short-term assets. The four companies we
analysed all have current ratios above one, indicating good financial help to meet short term financial
obligations. The highest current ratio is KO at 4.15 followed by COKE at 3.94, then MDLZ at 3.75,
and the lowest current ratio belongs to LEVI at 3.39.
D) Among the companies listed, COKE distinguishes out with a cash flow from operating activities of
$800 million, exceeding its $2 million capital investment. This is an indication of a strong financial
position since running operations are bringing in sufficient funds to meet investment requirements.
Strong financial management can also be seen by KO, whose operating cash flow of $11,600 billion
which easily covers its $1800 billion capital investment. In the same way, MDLZ reported strong
operating cash flow of $4700 million, which exceeds its $1100 million capital expenditure. These
businesses have sound financial standing and efficient operations, guaranteeing that they can easily
afford their capital expenditures. In contrast, LEVI $435 million operating cash flow is marginally
less than its $315 million capital investment, indicating potential areas for optimization or strategic
financial management.
E) The ratios of price to earnings (PE) provide information about how these companies' stock values
compare to their earnings. The moderate ratio of 19.19 for COKE indicates a balanced valuation,
whilst the higher ratio of 24.90 for the KO indicates a premium for its strong global brand. The
significantly higher ratio of 30.8 for LEVI suggests that investors are prepared to pay more for the
company's earnings, maybe as a result of its established reputation. With a ratio of 21.01, MDLZ is
positioned in between the two Coca-Cola companies, indicating an average value.
Financial Statement Analysis Project
Component 2 – Team Cross-Sectional Analysis
A) While reviewing the individuals reports, similarities were found in the products sold by Mondelez
International, Inc. (MDLZ), Coca-Cola Consolidated, Inc. (COKE), and The Coca-Cola Company
(KO) are all companies that sell a product that its buyer can consume while Levi Strauss & Co.
(LEVI) is a company that sells apparel which sets it apart from the rest of the companies. Comparing
these companies based on their total revenue as shown in Exhibit A1 you can see that KO has the
largest total revenue, coming out to $45.8 Billion. MDLZ, whose total revenue comes out to be
$36.02 Billion. Then COKE follows up with a total revenue of $6.6 Billion. Finally in our group the
company with the smallest amount of total revenue is LEVI with a total of $6.2 Billion. You can see
this information listed down below in Exhibit 1 in order of the greatest total revenue. Comparing these
companies based on their growth in revenue as shown on Exhibit A2 you can see that MDLZ has
grown 14.35%. The company that has the second biggest growth in revenue is COKE, which has a
growth of 7%. Then KO follows with a growth of 6.39%. Finally, LEVI has a growth of 0.17%
making it the smallest growth out of all these companies. You can see this information below in
Exhibit 2 listed in order of greatest growth in revenue.
B) The four companies represent distinct industries and exhibit various levels of profitability in 2023.
KO, a global beverage giant, enjoys high profit margins, with a gross profit margin of 59.52% as
shown in Exhibit B1. COKE, the largest Coca-Cola bottler in the United States, operates in a more
cost-intensive segment. This company has lower gross and operating profit margins at 39.06% and
12.54%, respectively, due to the expenses associated with bottling, distribution, and logistics. The
lower pre-tax and net profit margins of 8.38% and 6.14% further indicate the impact of operational
costs and fluctuating raw material prices on its profitability. Although COKE complements KO, its
profitability is constrained by its role in the distribution and bottling process. MDLZ, a leading snack
and confectionery company, reported moderate profitability, with a gross profit margin of 38.22%, an
operating profit margin of 15.28%, a pre-tax profit margin of 16.33%, and a net profit margin of
13.79%. However, MDLZ operates in a highly competitive industry where fluctuations in commodity
prices can impact profitability. LEVI had a gross profit margin of 56.89% but lower operating and net
profit margins of 5.71% and 4.03%, indicating high marketing and distribution costs. The apparel
industry's challenges, including changing consumer trends and supply chain disruptions, contribute to
Levi's lower profitability, with competition from fast-fashion brands impacting its bottom line.
C. To analyse solvency between companies, interest coverage ratio was used. Interest coverage ratio
measures a company’s ability to cover its interest expenses along with its operating income. A higher
, ratio indicates better ability to meet interest obligations. Among the four companies we analysed, the
company with the highest solvency is Coca Cola Company (KO) at 7.41. It was the only company
with a positive interest expense, meaning that they did have interest expense. The other companies
had interest income instead. There was a large and notable deviation with Coca Cola Consolidated
(COKE). The had a interest coverage ratio of –607.8. This implies that the company’s operating
income is significantly lower than its interest expenses, and that this company would be able to meet
its debt obligations. MDLZ and LEVI also have concerning interest coverage ratios at –17.75 and –
7.69 respectively. They are both still operating at a loss and having trouble generating income
exceeding their interest expenses. Overall based on interest coverage ratios, all companies except KO
are in serious risk of not fulfilling and debt obligations if they were to arise.
To analyse liquidity, the current ratio was used. This ratio considers current assets and current
liabilities and aims to find out if a company can meet its short-term obligations, hence only
considering current accounts. If a current ratio is above one, it indicates that a company has greater
current assets than current liabilities and are therefore adequate to cover short- term obligations. If a
company's current ratio is less than one, their liabilities are greater than their assets and they might
have problems in meeting short term obligations with their short-term assets. The four companies we
analysed all have current ratios above one, indicating good financial help to meet short term financial
obligations. The highest current ratio is KO at 4.15 followed by COKE at 3.94, then MDLZ at 3.75,
and the lowest current ratio belongs to LEVI at 3.39.
D) Among the companies listed, COKE distinguishes out with a cash flow from operating activities of
$800 million, exceeding its $2 million capital investment. This is an indication of a strong financial
position since running operations are bringing in sufficient funds to meet investment requirements.
Strong financial management can also be seen by KO, whose operating cash flow of $11,600 billion
which easily covers its $1800 billion capital investment. In the same way, MDLZ reported strong
operating cash flow of $4700 million, which exceeds its $1100 million capital expenditure. These
businesses have sound financial standing and efficient operations, guaranteeing that they can easily
afford their capital expenditures. In contrast, LEVI $435 million operating cash flow is marginally
less than its $315 million capital investment, indicating potential areas for optimization or strategic
financial management.
E) The ratios of price to earnings (PE) provide information about how these companies' stock values
compare to their earnings. The moderate ratio of 19.19 for COKE indicates a balanced valuation,
whilst the higher ratio of 24.90 for the KO indicates a premium for its strong global brand. The
significantly higher ratio of 30.8 for LEVI suggests that investors are prepared to pay more for the
company's earnings, maybe as a result of its established reputation. With a ratio of 21.01, MDLZ is
positioned in between the two Coca-Cola companies, indicating an average value.
