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Coca Cola

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300 views2 pages

Coca Cola

coca cola

Uploaded by

tpequit
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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COCA - COLA

Coca-Cola is a globally renowned multinational beverage corporation that specializes in


manufacturing, marketing, and selling non-alcoholic beverages. The company was founded in 1886 and,
over the years, has offered a diverse range of beverage brands, including Diet Coke, Coca-Cola Zero Sugar,
Fanta, Sprite, Minute Maid, Powerade, Dasani, and many others (Britannica Money, 2024). It caters to
different tastes and preferences with its wide range of products. The company has been known for years
as one of the best producers of beverages in the world.

Due to the diverse offering of products that the company offers, Coca-Cola's inventory is
incredibly diverse and has large quantities that are located all around the world. According to an article
published by an analysis website regarding inventories, Coca-Cola Company inventory consists of raw
materials inventory, work-in-process inventory, finished goods inventory, and other inventory
(Dybek, 2024). An article published by Coca-Cola confirms this, their company inventories consist of raw
materials and packaging (which includes ingredients and supplies), and finished goods (which comprise
completed beverages in the finished product operations and concentrates and syrups in the concentrate
operations) make up the majority of inventories. Coca-Cola’s inventories are valued on the basis of the
lower cost and market, and cost is determined using the first-in, first-out method, or the FIFO method.
(The Coca-Cola Company Quarterly Report Pursuant to Section 13 or 15, 2017)

Coca-Cola uses FIFO to precisely track its inventory expenses. By prioritizing the oldest purchases
when valuing their inventory, COCA COLA is better able to calculate COGS and make well-informed
decisions regarding production and pricing. Aside from this, the first-in, first-out method benefits the
company as it provides a better matching of cost to its corresponding revenue, which follows the strict
principle of matching. This method also helps with other factors, such as minimizing obsolescence risk. As
a beverage company, the risk of product obsolescence is high for Coca-Cola. The first-in, first-out method
helps the company reduce this risk by producing first-to-market batches of finished products that came
from the first purchases of inventory. Thus, the first-in, first-out, or FIFO method will provide quality
assurance that safeguards the customers safety as they get the newest or latest good from the company.
Therefore, the FIFO method is not only beneficial on the part of the company but also to its customers,
especially in the line of business that Coca-Cola is into.

Additionally, in terms of the company's management of its inventories, according to a report, due
to the fact that Coca-Cola does not supply its ingredients for itself nor deliver its product directly to its
customers, the inventory management of the company involves the key role of its partners. The company
recognizes that its suppliers and customer are vital to the continued success of the company as it is the
partners that deliver the required services and products. (Coca Cola Operations and Inventory
Management | Report Example, 2023) Hence, the company's established relationship with its customers
and supplier allows Coca-Cola to properly handle its inventory and have a smooth chain of operations.
Due to this, the company is able to successfully discharge its finished goods inventory to the people or
customers and is able to produce these goods with the aid of proper raw material inventory from its
partner supplier.

Lastly, Coca-Cola implements internal controls to avoid the risk of misappropriation of its assets.
This misappropriation of assets and other business factors is not only possible because of internal
problems but also external problems, such as those from the government. To ensure the accuracy and
veracity of Coca-Cola financial statements and other reports, it executes internal controls such as ensuring
that their robust risk framework is both top-down and bottom-up, identifying, reviewing, and escalating,
where appropriate, any risks arising from or impacting their business activities, in which collaborative
effort is made to ensure effectiveness and appropriateness. The company also executes a process
overview regularly and a process overview of risk management within the organization, detailing how
risks are identified, assessed, mitigated, and monitored at various levels of the company's hierarchy. Also,
the company executes a cross-functional approach to risk management, whereas the senior management
shares their insights and expertise in the evaluation of the reports. Lastly, Coca-Cola also ensures that the
roles and responsibilities of each member of the organization are aggregated, properly positioned, and
accountable.

In conclusion, for Coca-Cola's inventory management, the company uses the FIFO method, which
is beneficial for the company in maintaining the quality and effectiveness of its diverse range of products
while maximizing the company’s operational efficiency. By executing the FIFO method, Coca-Cola can
accurately calculate costs, minimize obsolescence risks, and ensure high-quality products for its
customers. Additionally, the company's relationships with its partners, suppliers, and customers
contribute to effective inventory management and lead to smooth operations. Furthermore, Coca-Cola
implements internal risk management to achieve verifiability, such as robust internal controls and a
comprehensive risk management framework. Overall, these tactics help Coca-Cola attain its position and
remain one of the most successful companies in the world.

REFERENCES

Britannica money. (2024, April 1). https://www.britannica.com/money/The-Coca-Cola-Company

Coca Cola Operations and Inventory Management | Report example. (2023, October 30). IvyPanda.

https://ivypanda.com/essays/coca-cola-operations-and-inventory-management/

Dybek, M. (2024, February 21). Coca-Cola Co. (NYSE:KO) | Analysis of Inventory. Stock Analysis on Net.

https://www.stock-analysis-on.net/NYSE/Company/Coca-Cola-Co/Analysis/Inventory

Risk management. (n.d.). CCH Group Website. https://www.coca-colahellenic.com/en/about-

us/corporate-governance/risk-management

Team, O., & Team, O. (2023, November 2). Cost of goods sold FIFO Method: Inventory valuation in procurement.

Oboloo. https://oboloo.com/blog/cost-of-goods-sold-fifo-method-inventory-valuation-in-procurement/

The Coca-Cola Company Quarterly report pursuant to Section 13 or 15(d). (n.d.). https://investors.coca-

colacompany.com/filings-reports/quarterly-filings-10-q/xbrl_doc_only/1688

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