Coca-Cola is a major multinational corporation with a well-developed supply chain management. The company’s working capital is appraised as the biggest, which ensures stable positions in the beverage industry. Its financial aspect is available online to demonstrate its transparency to the public. This paper aims to dwell on the working capital of Coca-Cola compared to its main competitors and identify how supply chain management impact this indicator.
In order to count the working capital, the following formula will be used: Working Capital = Current Assets – Current Liabilities. As a result, the working capital of Coca-Cola is $6,47 billion (“Coca Cola working capital,” 2022). Working capital is necessary to provide the production process with the needed resources in a timely manner and the right amount (Brigham & Ehrhardt, 2020). The current state of affairs at the enterprise and its ability to develop in the future depends on how effectively the management uses it.
The working capital of Coca-Cola significantly exceeds those of its major competitors. The company makes more profit than it spends on the production processes. For instance, Coca-Cola’s capital is 1,5 bigger than PepsiCo’s, which owns $5,45 billion of working capital. The other large manufacturer Dr. Pepper has only $126,01 million of available monetary assets. Consequently, having the highest numbers per the working capital, Coca-Cola remains the most influential manufacturer in the beverage industry. This leading position is conditioned by the sustainable growth of the company and its well-developed regulation. In addition, Coca-Cola’s management is flawless, which allows for setting long and short-term achievable goals.
In any industry, a company must conduct an average revenue growth analysis in order to trace its financial development. Multinational manufacturers need to track their position in the market. Such a ration evaluation can help owners identify strengths, weaknesses, opportunities, and threats (Brigham & Ehrhardt, 2020). It also enables manufacturers to indicate their major competitors and figure out how to outperform them. In general, measuring one’s ratio to the average in the industry is among the primary steps each producer should take to see if their performance and influence are tangible.
The level of managing the working capital largely depends on the supply chain management – it can come into play when there is a necessity to improve the current financial situation. If the company sells tangible goods and services, they need to sustain the supply chain so as not to lose assets. Whenever there are day-to-day operations, an organization should have a well-developed transportation system to ensure easy delivery of products (Brigham & Ehrhardt, 2020). In order to impact the growth of the working capital, the company should introduce initiatives aimed at expanding inventory. This strategy would help increase the volume of goods to be transported. In addition, it is essential to elaborate on new routes and purchase additional transport for faster transfer. Finally, the supply chain managers should make connections with the companies who need to store and transport their goods to different destinations.
In summary, Coca-Cola remains the largest beverage manufacturer in the industry with the above-average working capital, enabling the company to occupy the leading positions year by year. Measuring one’s ratio to the average in the industry helps indicate a company’s strong and weak sides. Finally, supply chain management can be an efficient means to increase the working capital by expanding the inventory and acquiring new transport.
References
Brigham, E. F., & Ehrhardt, M. C. (2020). Financial management: Theory and practice (16th ed.). Cengage Learning.
Coca Cola working capital. (2022). Macroaxis. Web.