Coca Cola is the number one beverage company in the world. The company, since its origin, has not only provided an incredible product but has continued growing over the years into a leader of innovation, social responsibility, and diversity. Let us begin with a brief background of this remarkable company. It all started in 1886 when a pharmacist by the name of John Pemberton whipped up a batch and took it down in Jacob’s pharmacy and began to sell the glass bottles at 5 cents a bottle. The drink was an instant hit and was given the name Coca Cola. By 1918, Coca Cola took off and could be found in eight different countries. By 1959, the company introduced Sprite to the production line and by this time the company had made it to over 120 different countries. By the 1970s, the company had several different brands and was found in over 160 different countries. Of these 160 countries was China; Coca Cola was the only company allowed to sell cold drinks in the republic of China. In 1982 the company introduced Diet Coke, becoming the number one low calorie drink within its first two years, second in success only to the original coke. Fast forward about 20 years to today, and you can find one of the company’s 500 brands in over 200 countries worldwide, selling 1.8 billion servings every single day.
Today, Coca Cola goes out of its way to be an industry leader for innovation. Coca Cola cares about the environment and with over 1.8 billion servings a day were glad they do. In Japan, Coca Cola partnered with designer Oki Sato have made a full line of green glass tableware made out of the company’s iconic glass contour bottles. Coca Cola has also partnered with music artist and producer Will.i.am. Together, they have made recycling cool and have made headphones, phone cases, and even jeans of recycled materials. This isn’t all Coca Cola has been up to.
Aside from recycling, Coca Cola is fighting back against obesity. Many people around the world from consumers to investors are worrying about the constant struggles against obesity in today’s society. Coca Cola has taken this into account and now offers over 180 no and low calorie options. Also, most of the companies more successful brands have no calorie versions as well. In the United States alone the company has reduced its average calories per serving by 22%. Coca Cola has also introduced smaller sized portions of their most popular products that can be found around the country by the end of this year. All bottles and cans now have the calories per container on the front instead of on the back so that consumers can be fully conscious and make informed decisions. As if this wasn’t enough, Coca Cola has voluntarily changed its offerings for elementary, middle, and high schools across the nation to low or no calorie products. Doing so has reduced the beverage calories in schools by as much as 90%.
Coca Cola is also a leader of diversity. With its brands found in over 200 countries around the world it is important that they are as diverse as their products. Coca Cola offers employment in North and South America, Europe, Asia, Africa, and Australia. When searching for job opportunities, Coca Cola divides up all their opening positions by regions to provide an easy and reliable way for those searching. Working at Coca Cola offers its employees a chance to make a difference, a chance to grow, a chance to work in a company with strong ethics and values, while providing a chance to work with a diverse group of individuals to offer a one of a kind experience. All in all Coca Cola company truly is a leader not only in its own industry but a leader in overall company standards. Leading in social responsibility far beyond just providing a good product but using their power as a worldwide brand and using it to make the world it serves an overall better place.
Summary of Financial Statement3 months financial statement
The financial statement for a period of 3 months ending on 28th September 2012, the Net operating revenues was $12,340 million, 1% more than one recorded in 30th September 2011. The cost of goods sold was $4,853 hence resulting to a gross profit of $7,487 million. The operating income was $2,793 million after deducting the selling, general and administrative expenses ($4,630 million) plus other operating charges ($64 million). The income before income taxes for the period ended 28th September, 2012 was $3, 084 million. The consolidated net income was $2,329 million after deduction of $755 million income taxes. The Net income attributable to the given shareowners of the company was $2,311 million after deduction of the net income that was attributable to the given non -controlling interests ($18 million). The net income per share for that ending period was $0.50. The average shares outstanding as per 28th September, 2012 was $4,587 million (The Coca Cola Company, 2012).
9 months financial statement
The financial statement for a period of 9 months ending on 28th September, 2012, the gross profit was $22,137 million after deduction of the cost of goods sold ($14,425 million) from the net operating revenues ($36,562 million). The operating income was $8,596 after deduction of selling, general and administrative expenses ($13,308 million) and other operating charges ($233 million) from the gross profit. The income before income taxes for the period ending 28th September, 2012 was hence $9,432 million. The consolidated net income after deduction of income taxes was $7,196 million. After deduction of the net income attributable to the given non-controlling interests ($43 million) from the consolidated net income, the net income attributable to the given shareowners remained as $7,153 million. At net income per share at the closing date were $1.56 and the average shares outstanding came to $4,593 million (The Coca Cola Company, 2012).
In the period ending 28th September 2012, the total cash, short term investments and cash equivalents were $ 14,935 million. The total currents assets were $29, 712. The total assets were $ 86,654 million. Total current liabilities were $27,008 million. The equity attributable to the given shareowners of the company was $33,320 million. The total equity was $33,590 million. The total equity plus liabilities were $86,654 million (The Coca Cola Company, 2012).
The cash flows for the 9 months period that ended on 2th September, 2012, the net cash for operating activities were $7,840 million. The net cash used in investing activities was ($10,399million). The net cash used for financial activities were ($399 million). The closing balance was hence $9,615 million (The Coca Cola Company, 2012).
Coca-Cola’s current ratio has decreased overall from 1.28 in 2009 to 1.05 in 2011. Despite this decrease, Coca-Cola is still very able to pay off it’s debts as the ratio’s all sit above the desired minimum of 1.0. Quick Ratio:
Coca-Cola’s quick ratio has also decreased from 1.12 in 2009 to 0.92 in the 2011 annual report. This ratio shows that the company, in recent years has developed more of a reliance on the sale of inventory to be able to comfortably pay off their debts. The September 2012 quarterly report shows that quick-ratio is currently sitting at 0.97 which is just below the ideal minimum of 1.1
The cash ratio has remained reasonably steady over the years moving from 0.51, 0.46 to 0.53 which indicates that Coca-Cola has a low liquidity rate without relying on other current assets. This low ratio is not necessarily a bad thing as it shows that the company is investing its cash and cash-equivalents elsewhere, rather than just letting it sit unused.
The total debt ratio has increased since 2009 from 0.48 to 0.61 in the 2012 September quarterly report, indicating that the company currently has 61% of the assets that are financed by debt. This is quite a high number which may have some negative effects such as low levels of borrowing and therefore limited financial flexibility.
Debt to Equity Ratio:
The debt to equity ratio intends to measure the relative proportions of the firm’s assets that are funded by debt or equity. In 2009 Coca-Cola sat at 0.92 but has increased to its current position of 1.5. This essentially indicates that the company has high leverage and relies on debt to fund its assets.
The equity multiplier is another way to measure a company’s debt use. Coca-Cola’s ratio has increased from 1.92 in 2009 to 2.50 in the September 2012 quarter meaning that the company has 2.5 dollars of debt for every dollar of assets. This is quite a high number indicating that Coca-Cola has a high level of financial leverage.
Inventory Turn Over:
The inventory turn over ratio has also increased over the years from 4.71 in 2009 to 5.89 in 2011. This shows that Coca-Cola is selling and re-supplying its inventory up to 5.89 times annually which suggests that Coca-Cola attains fairly efficient inventory management and a good level of cash flow.
Receivables Turn Over Ratio:
Total Assets Turn Over Ratio:
The total assets turn over ratio is used as a measure of the company’s ability to use its assets to efficiently generate sales. Coca-Cola has had a decreasing asset turn over ratio from 0.64 in 2009 to 0.58 in 2011, which suggests that the company is becoming less efficient in its asset turn over ratio and may not be using its assets to their potential.
Profit Margin Ratio:
Coca-Cola’s profit margin has fluctuated but remained high overall, moving from 22% in 2009, 33.6% in 2010, 18.4% in 2011 to its current position of 18.9% in the September quarter of 2012. This is a good number for Coca-Cola as the ratio measures the percentage of the retained earnings that is able to be kept as profit.
Return on Assets:
Coca-Cola’s return on assets has stayed at a reasonably steady rate, ranging only from 14% in 2009 to 16.2% in 2010 to 10.7% in 2011. The purpose of this ratio is to indicate how efficient management uses its assets to generate earnings, this measure shows that Coca-Cola is able to remain reasonably steady and use its assets efficiently to generate these returns.
Return on Equity:
Coca-Cola’s ratios indicate that the company is able to generate high levels of profit from the money invested by shareholders. The ratio’s show movement between 27.5% (2009), 37.7% (2010) and back down to 26.9% (2011) which suggests effective use of equity investments.
Coca-Cola’s price earnings ratio displays a large increase from 12.4 in 2010 to 18.3 in 2011; its current position is at 14.9 as of September 2012 which is seen to be a relatively fair or high level. This indicates that investors are expecting higher earnings growth in the future. The main purpose of this ratio is to measure the company’s current share price relative to it’s per share earnings.
Coca-Cola appears to have a very high price-sales ratio sitting between 3.29 and 3.62 which is not desired by the company. In general it is thought that the better investments sit below 1.0.
Market to Book Ratio:
The purpose of the Market-book ratio is to measure the value of a company in comparison to its market value. Coca-Cola has fluctuated from 5.29 (2009), 4.86 (2010), 5.01 (2011) to its current value of 5.21. The current market to book value suggests that the company is in a good position as a low ratio indicates that the stock is considered to be undervalued and a high stock overvalued which could result in falling prices.
Comparison of ratios with Industries
Short-term solvency, or liquidity, ratios
The current ratio is a measure of short-term liquidity. It indicates a company’s ability to pay back its short-term liabilities with its current short-term assets. The higher the current ratio, the more capable the company is of paying its obligations. Coca-Cola’s highest current ratio (1.28) occurred in 2009 and its lowest current ratio (1.05) occurred in 2011. Pepsi highest current ratio (1.44) also occurred in 2009 and the lowest current ratio (0.96) also occurred in 2011. Based off of the 2012 Third Quarter financial statements for both Coca-Cola and Pepsi, the current ratios for both companies were relatively close. Pepsi’s current ratio (1.20) was slightly higher than that of Coca-Cola (1.10). Because the current ratios for both companies during all four years were greater than or approximately equal to one, both companies would have been able to pay off any obligations if they came due at that point in time.
The quick ratio is also a measure of liquidity. It is an indicator of the extent to which a company can pay current liabilities without relying on the sales of inventory. Both Coca-Cola’s and Pepsi’s highest quick ratios (1.12 and 1.14, respectively) occurred in 2009 and their lowest ratios (0.92 and 0.75, respectively) occurred in 2011. From 2009 to 2011 Coca-Cola maintained a quick ratio at or above one meaning that it did not have to rely on the sale of inventory to pay off its bills. On the other hand, Pepsi’s quick ratios were below one in 2010 and 2011 indicating that for these two years Pepsi relied on the sale of its inventory to pay its bills. As of September 2012, both Coca-Cola and Pepsi had similar quick ratios (0.97 and 0.95).
The cash ratio is a measure of how quickly a company can repay its short-term debt. Coca-Cola’s highest cash ratio (0.53) occurred in 2011 whereas Pepsi’s highest cash ratio (0.45) occurred in 2009. Coca-Cola’s lowest cash ratio (0.46) occurred in 2010 while Pepsi’s lowest cash ratio (0.22) occurred in 2011. According to the numbers in the 2012 Third Quarter financial statements for both companies, Pepsi had a higher cash ratio (0.33) than Coca-Cola (0.20). As shown in the table, from 2009 to 2011, Coca-Cola’s current ratio and quick ratios decreased while its cash ratio decreased from 2009 to 2010 and then increased from 2010 to 2011. From 2009 to 2011, Pepsi’s current ratios, quick ratios, and cash ratios continuously decreased.
Long-term solvency, or financial leverage, ratios
Both Coca-Cola’s and Pepsi’s total debt ratios, debt-equity ratios, and equity multiplier continuously increased from 2009 to 2011. The total debt ratio shows the percentage of a company’s assets that are provided by debt. In 2011, both Coca-Cola and Pepsi exhibited their highest total debt ratio of 0.60 and 0.71, respectively. Coca-Cola’s and Pepsi’s lowest total debt ratios 0.48 and 0.56 occurred in 2009. The increases in the ratios from 2009 to 2011 reveal that both Coca-Cola and Pepsi have a greater risk associated with their operations. Increasing debt to asset ratios may also be indicative of a low borrowing capacity. This increase lowers Coca-Cola’s and Pepsi’s financial flexibility. As of September 2012, Pepsi had a higher total debt ratio than Coca-Cola. This means that Pepsi has slightly less financial flexibility than Coca-Cola.
The debt-to-equity ratio is the used to show the relative proportion of a company’s equity and debt used to finance an entity’s assets. It is also measures the company's ability to repay its obligations. Both Coca-Cola and Pepsi had their highest debt-to-equity ratios (1.50 and 0.98, respectively) in 2011 and their lowest debt-to-equity ratios (0.92 and 0.42, respectively) in 2009. Both Coca-Cola’s and Pepsi’s debt-to-equity ratio continuously increased from 2009 to 2011. This increase in the ratio shows that Coca-Cola and Pepsi are being financed by creditors rather than from its own financial sources which could possibly be a dangerous trend. Because of this increase, Coca-Cola and Pepsi might be less likely to receive additional lending capital. Based on the September 2012 financial statements, Coca-Cola has a higher debt-to-equity ratio than Pepsi. This implies that Coca-Cola was financed more by creditors than Pepsi.
Equity multiplier is a method of examining how a company uses debt to finance its assets. Coca-Cola’s and Pepsi’s equity multipliers increased from 2009 to 2011. The higher equity multipliers of both companies in 2011 indicate that they increased their financial leverage from 2009 to 2011. This means that Coca-Cola and Pepsi relied more on debt to finance its assets in 2011 than they did in 2009. As of September 2012, Pepsi had a higher equity multiplier than Coca-Cola meaning that it relied more on debt to finance its assets than Coca-Cola.
Asset utilizations, or turnover, ratios
The inventory turnover is a measure of how many times a company’s inventory is sold and replaced over a given period of time. Both Coca-Cola’s and Pepsi’s inventory turnover ratios continuously grew from 2009 to 2011. Pepsi had higher ratios than Coca-Cola from 2009 to 2011. This implies that Pepsi had either stronger sales or more ineffective buying than Coca-Cola. Based on the Third Quarter financial statements of both Coca-Cola and Pepsi, Pepsi had a higher inventory turnover in Coca-Cola in 2012.
The receivables turnover ratio measures a firm’s effectiveness in extending credit as well as collecting debts. It measures how efficiently a firm uses its assets. Both Coca-Cola’s and Pepsi’s receivables turnover ratio showed a decrease from 2009 to 2010 and then an increase from 2010 to 2011. As of September 2012, Coca-Cola has a higher receivables turnover than Pepsi. The higher ratio for Coca-Cola implies that the company either operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient.
The total asset turnover ratio indicates the amount of sales generated for every dollar’s worth of assets. Coca-Cola’s and Pepsi’s total asset turnovers decreased from 2009 to 2010 and then increased from 2010 to 2011. As of September 2012, Pepsi had a higher total asset turnover ratio than Coca-Cola. This displays that Pepsi better used its assets to generate sales or revenue than Coca-Cola.
Profit margin is a measure of how much out of every dollar of sales a company actually keeps in earnings. Coca-Cola’s highest profit margin of 33.60% occurred in 2010. Pepsi’s highest profit margin of 13.75% occurred in 2009. The profit margin for Pepsi decreased continuously from 2009 to 2011. Coca-Cola’s profit margins were much higher than Pepsi’s profit margins from 2009 to 2011. This indicates that Pepsi had less control over its costs compared to Coca-Cola. Based on the Third Quarter financial statements of both companies, Coca-Cola had a higher profit margin than Pepsi in 2012.
Return on assets (ROA) is a measure of how efficient management is at using its assets to generate earnings. Coca-Cola’s return on assets increased from 2009 to 2010 and then decreased from 2010 to 2011. Pepsi’s return on assets decreased from 2009 to 2011. From 2010 to 2011, Coca-Cola had higher ROA number than Pepsi. This indicates that Coca-Cola earned more money on less investment. As of September 2012, the ROA for both Coca-Cola and Pepsi were fairly close to each other.
Return on equity (ROE) is a measure of a company’s profitability. It displays how much profit a company generates with the money shareholders have invested. Coca-Cola’s ROE increased from 2009 to 2010 and then decreased from 2010 to 2011. Pepsi’s ROE decreased from 2009 to 2010 and then increased from 2010 to 2011. According to the financial statements at September 2012, Coca-Cola has a lower ROE than Pepsi.
Market Value Ratios
Price-earnings ratio is a measure of a company’s current share price relative to its per-share earnings. Coca-Cola’s price-earnings ratios decreased from 2009 to 2010 and increased from 2010 to 2011. Pepsi’s price-earnings ratios increased from 2009 to 2011. In 2011, Coca-Cola has a higher price-earnings ratio than Pepsi. This high price earnings ratio indicates that investors are expecting higher earnings growth in the future for Coca-Cola compared to Pepsi. As of September 2012, the price-earnings ratios for both Pepsi and Coca-Cola were relatively close.
Price-sales ratio values a stock relative to its own past performance, other companies or the market itself. Coca-Cola’s price-sales ratio increased slightly from 2009 to 2011. Pepsi’s price-sales ratio decreased slightly from 2009 to 2010 and then increased slightly from 2010 to 2011. Pepsi’s price sales ratios are closer to one than Coca-Cola’s ratios. This means that Pepsi is a better investment since the investor would be paying less for each unit of sales. Based on the financial statements at September 2012, the price-sales ratio of Pepsi was much less than the price-sales ratio of Coca-Cola.
Market-to-book ratio measures the relative value of a company in comparison to its market value. A low the market-to-book ratio is preferred. Coca-Cola’s lowest market to book value occurred in 2010 and Pepsi’s lowest market-to-book value occurred in 2010 as well. Both companies had ratios above one suggesting that both companies are overvalued. As of September 2012, both Pepsi and Coca-Cola had relatively the same market-to-book value.
Beta is a measure of how risky a stock is or how elastic or inelastic it is in the global market. Coca Cola Company (KO) has a low Beta of 0.4. The low Beta shows how it is barely affected by changes in the market and is essentially recession proof. This makes KO stock ideal for the long term investor who is seeking a stable stock. KO also proves ideal for those buying stock for the first time. The relatively low price per share ($40.45 as of April 1) and the consistency of the stock would be a good way for a new stock owner to get to know the market and eventually move on to riskier stocks that will generate a faster return.
Coca Cola Company is also ranked by Forbes as the 3rd most powerful brand in the world. Its global recognition and presence in over 200 countries makes Coca Cola Company one of the most diversified companies in existence. Coca Cola’s diversity makes it less likely to be strained by hardship in one country or another. Coca Cola does not rely on the economy of any one given country and even so, fountain drinks are a relatively inelastic product to begin with. If toping multiple Forbes lists wasn’t enough to convince one to purchase KO stock one can always turn to the major players of the stock market for advice. Take Warren Buffet for example. Warren Buffet’s Berkshire Hathaway firm currently holds the largest portion of Coca Cola Company currently at about 200 million shares valued at just over $16 billion.
Coca Cola Company in a nursery rhyme context would be a clear example of “slow and steady wins the race”. Although, no one has become a millionaire with KO stock overnight the 100+ year old company has grown steadily over the years withstanding multiple economic downturns and finding its way across the globe, recognized by all.
Coca-Cola good buy or sell
As shown above in Figure 1, there seems to be an overall increase in Coca-Cola’s stock prices from April 2008 to April 2013. Using regression analysis for the data indicated in Table 2, the stock price for April 2014 was forecasted to be about $43.44. Figure 2 shows the actual stock value for five years of monthly data, starting from April 2008 and ending at April 2013, along with the forecasted stock price for April 2014.
The forecast for the price of the stock in April 2014 is reasonable. The R-squared value in Figure 2, is 0.901. This means that the model used to forecast the future stock price of Coca-Cola is about 90.1 percent accurate. Additionally, the stock prices from April 2008 to April 2013 generally increase so it is very likely that the price of Coca-Cola’s stock will be slightly greater in April 2014 ($43.44) than it was in April 2013 ($40.45).
What could affect its future performance and stock price
With 17% of the market share, Coca-Cola (KO) is undoubtedly the leader in the soft drink industry, but it is also known as the ‘dividend king’ when it comes to shareholder payouts. Coca-Cola's has an annual payout of $1.12 which is distributed on a quarterly basis ($0.28 per share) which is 2.9%, making this stock a favourite among yield seekers. Many investors look for stocks with solid dividend distribution as they are seen to be safer and a greater likelihood of making money on the stock so continuing to distribute reliable dividend payments will ensure maintenance of the stock price.
Coca-Cola currently has a desirable capital structure of 0.55 equity and 0.45 debt in comparison to the industry average debt ratio of 0.85. This effectively reveals that the firm does not solely rely on debt to fund the company but uses it effectively in order to maximise its profitability potential. It is important for Coca-Cola to maintain this solid capital structure because it is a good indicator of a firm’s balance sheet and the health of the overall company. A strong and healthy balance sheet is an important factor that must be considered before investing in a company so as long as Coca-Cola is able to control its debt to equity ratio, it will be capable of sustaining a desirable stock price.
According to Standard & Poor’s (S&P) rating, Coca Cola is continuing to maintain a very strong financial profile. The S&P raised the firm’s rating from A+ to AA- and it’s short-term corporate credit and commercial paper ratings to A-1+ from A-1 creating a stable and positive future outlook. This indicates that the company has high credit quality and the ability to pay off their bonds in reasonable time. This raise reflects Coca-Cola’s consistent global performance and strong financial situation even in the currently weak global economy which is something that potential investors highly regard when considering investing in a stock. If a company is able to remain stable through economic hardship it is considered to be a solid and safe option to invest in which will ensure constant demand for shares and investments, overall benefiting the firm and it’s financial standing in relation to the market. These S&P ratings are important factors for potential investors as they reflect Coca-Cola’s business risk profile as excellent and financial risk profile as modest in comparison to the overall market. Business risks are key factors that influence whether or not to purchase shares in a company, by assessing Coca-Cola’s business risk it is important to include its extremely strong market position as the world's largest non-alcoholic beverage company as well as its geographic diversification, which will continue to translate into very strong profitability and future cash flow.
Coca-Cola’s strong brand awareness is a crucial element to its performance and stock price. It is difficult to imagine a fall in market share or brand awareness in such a highly promoted company, it is impossible to be unaware of the brand name and the products produced, creating a much more appealing stock option to invest in. Coke is the leading company in the mature US carbonated soft drink (CSD) market with an estimated 42% lead and a worldwide CSD market share of approximately 53%. According to Beverage Digest, Coca-Cola retains the number one share position in the U.S. non-alcoholic liquid refreshment beverage category. Coke also benefits from its strong geographical diversification, with Coca-Cola trademarked beverage products sold in over 200 countries worldwide. With such a strong level of brand awareness, the company is seen as a ‘safe’ company to put money into, as there is no sign of future stock price declines, even in harsh economic conditions it seems to be able to remain steady, which is considered extremely crucial for many investors, particularly investors looking for long-term purchases.
Super-investor Warren Buffet began buying Coca-Cola (KO) stock in 1988 and still has not sold. Buffet owns 200 million Coca-Cola shares which stands for 21.6% of his weighted portfolio and a total of 8.3% stake in the company. Having such a recognised and admired figure as Buffet owning a significant amount of Coke’s shares is a very positive factor for the firm. As long as Buffet has confidence in the company, other investors will follow ensuring the stock price is able to remain constant or even gradually grow. Although, if Buffet sees that the company may face a period of downfall and sells his shares, it could have a tremendous impact on the company. If Buffet decides to sell after holding the stock for 25 years, investors will follow by panic-selling their shares, potentially causing a plummet in Coca-Cola’s stock prices.
The stock has risen over the past year as investors have generally rewarded the company for its revenue growth of 3.7% since last year and the firm’s 0.3% lead on the industry average; along with other positive factors. “Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year” (The Street Rating).
Coca-Cola co. is currently looking into the potential use of printed advertisements in magazines where the reader is able to tear off and eat a piece of the printed paper to taste the new and improved taste of the company’s orange Fanta flavour. This is an interesting and highly innovative approach that will definitely get people talking. This is a very innovative way to distribute taste testing for future flavours and drink inspirations for the company. If this technique is effective and able to persuade consumers to purchase more Coke products it has the potential to greatly enhance the company’s future performance which in turn will directly relate to at heightened stock prices and share value.
Coca-Cola is currently piloting vending machines that let consumers buy drinks and earn ‘My Coke Rewards’ loyalty points with the simple tap of their phone. Mobile payments hit $172 billion in 2012 globally, a 62 percent increase from 2011. Coca-Cola has realized that people have been using their Smartphone’s to shop online for several years, instigating the introduction of ‘tap and pay’ transactions that are now catching on. Coca-Cola Co. intends on developing this project through a new partnership with ‘Isis joint venture’ which is essentially a mobile wallet created by AT&T Mobility, T-Mobile USA and Verizon Wireless. The ideas is that Smartphone users will be able to download the Isis Mobile Wallet app and securely add debit, credit, loyalty cards, coupons, tickets and more, which they will be able use to purchases products at participating stores and in the near future; vending machines. 200 machines, fitted with small Smartphone readers are currently being tested in Austin, Texas with intend of releasing tens of thousands of units nation wide by the later course of 2013. This innovative idea has the potential of raising future performance of the firm as it will increase the opportunity for greater sales. In today’s society it is rare for people to carry physical money, let alone small change, leaving the vending machine out-dated and often inconvenient. This advance in technology will appeal to the younger, more technological based generations and in return have the potential to increase overall profitability and future performance of the stock.