Ko-stock-sample Analysis Report Intrinsic Value

Jae Jun Author

mail questions or comments to: [email protected] www.oldschoolvalue.com

Disclaimer Nothing on Old School Value, related pages, emails, or other communications by the author, either written or oral, are intended to be a recommendation to either buy, hold, or sell any specific security or group of securities. Likewise, nothing herein should be construed as an endorsement of any financial adviser, investment manager, commercial information provider, transaction service, or brokerage firm. The findings from this spreadsheet is merely a start to a means of further research and uncovering a great business and investment. Old School Value holds no responsibility for any investment whatsoever.

Company Name

ticker

Coca-Cola Co.

KO

2/24/2009

all figures in $Mil

Financial Data

KO

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

TTM

Revenue

$ 18,813.0

$ 19,805.0

$ 20,458.0

$ 20,092.0

$ 19,564.0

$ 21,044.0

$ 21,962.0

$ 23,104.0

$ 24,088.0

$ 28,857.0

$ 32,149.0

COGS COGS (%)

$

$

$

$

$

$

$

$

$

$ 10,406.0 36.1%

$ 11,447.0 35.6%

Gross Profit

$ 13,251.0

$ 18,451.0

$ 20,702.0

Income Statement 5,562.0 29.6%

Gross Profit (%)

6,009.0 30.3%

$ 13,796.0

70.4%

6,204.0 30.3%

$ 14,254.0

69.7%

6,044.0 30.1%

$ 14,048.0

69.7%

7,105.0 36.3%

$ 12,459.0

69.9%

7,762.0 36.9%

$ 13,282.0

63.7%

7,638.0 34.8%

$ 14,324.0

63.1%

8,195.0 35.5%

$ 14,909.0

65.2%

8,164.0 33.9%

$ 15,924.0

64.5%

66.1%

63.9%

64.4%

9,431.0 39.2%

$ 10,945.0 37.9%

$ 12,069.0 37.5%

Operating Expenses SG&A SG&A (%) R&D R&D (%)

$

8,284.0 44.0%

$

Other Other (%)

$

Operating Income

$

$

$ 0.0% $ 0.0% 4,967.0

Operating Income (%)

$

26.4%

9,001.0 45.4%

$

$ 0.0% 813.0 $ 4.1% 3,982.0

$

20.1%

9,120.0 44.6%

$

$ 0.0% 1,443.0 $ 7.1% 3,691.0

$

18.0%

8,696.0 43.3%

$

$ 0.0% $ 0.0% 5,352.0

$

26.6%

7,001.0 35.8%

$

$ 0.0% $ 0.0% 5,458.0

$

27.9%

7,488.0 35.6%

$

$ 0.0% 573.0 $ 2.7% 5,221.0

$

24.8%

8,146.0 37.1%

$

$ 0.0% 480.0 $ 2.2% 5,698.0

$

25.9%

8,739.0 37.8%

$

$ 0.0% 85.0 $ 0.4% 6,085.0

$

26.3%

$ 0.0% 185.0 $ 0.8% 6,308.0

$

26.2%

$ 0.0% 254.0 $ 0.9% 7,252.0

$

25.1%

0.0% 367.0 1.1% 8,266.0 25.7%

Other Income and Expense Net Int Inc & Other

$

172.0

$

21.0

$

Earnings Before Taxes

$

5,198.0

$

3,819.0

$

(3.0) $ 3,399.0

$

75.0

$

5,670.0

$ $

Income Taxes

$

1,665.0

$

1,388.0

$

1,222.0

$

1,691.0

Earnings After Taxes Acctg Changes

$ $ $

3,533.0 -

$ $ $

2,431.0 -

$ $ $

2,177.0 -

$ $ $

3,979.0 $ (10.0) $ $

Disc Operations Ext Items Net Income

$ $

Net Income (%) Diluted EPS, Cont Ops$ Diluted EPS$

-

$

3,533.0

$

18.8% $ $

-

Shares

2,431.0

$ $

12.3% $ $

0

2,177.0

$ $

10.6%

1.0 $ 1.0 $ 2487

3,969.0

$ $

19.8%

0.9 $ 0.9 $ 2487

(343.0) $

$

524.0

$

605.0

$

270.0

$

621.0

$

6,222.0

$

6,690.0

$

6,578.0

$

7,873.0

$

(354.0)

1,523.0

$

1,148.0

$

1,375.0

$

1,818.0

$

1,498.0

$

1,892.0

$

1,886.0

3,976.0 $ (926.0) $ $

4,347.0 -

$ $ $

4,847.0 -

$ $ $

4,872.0 -

$ $ $

5,080.0 -

$ $ $

5,981.0 -

$ $ $

6,026.0 -

3,050.0

$ $

5,495.0

$

$

15.6%

1.6 $ 1.6 $ 2487

(140.0)

5,499.0

4,347.0

$ $

20.7%

1.6 $ 1.2 $ 2483

4,847.0

$ $

22.1%

1.8 $ 1.8 $ 2462

4,872.0

$ $

21.1%

2.0 $ 2.0 $ 2429

5,080.0

$ $

21.1%

2.0 $ 2.0 $ 2393

5,981.0

$ $

20.7%

2.2 $ 2.2 $ 2350

7,912.0

6,026.0 18.7%

2.6 $ 2.6 $ 2331

2.6 2.6 2342

Balance Sheet Assets Cash and Equiv Short-Term Investments

$ $ $

1,648.0 159.0 1,666.0

$ $ $

1,611.0 201.0 1,798.0

$ $ $

1,819.0 73.0 1,757.0

$ $ $

1,866.0 68.0 1,882.0

$ $ $

2,126.0 219.0 2,097.0

$ $ $

3,362.0 120.0 2,091.0

$ $ $

6,707.0 61.0 2,171.0

$ $ $

4,701.0 66.0 2,281.0

$ $ $

2,440.0 150.0 2,587.0

$ $ $

4,093.0 215.0 3,317.0

$ $ $

7,797.0 287.0 3,674.0

$ $

890.0 2,017.0

$ $

1,076.0 1,794.0

$ $

1,066.0 1,905.0

$ $

1,055.0 2,300.0

$ $

1,294.0 1,616.0

$ $

1,252.0 1,571.0

$ $

1,420.0 1,735.0

$ $

1,424.0 1,778.0

$ $

1,641.0 1,623.0

$ $

2,220.0 2,260.0

$ $

2,321.0 2,741.0

Net PP&E

$ $

6,380.0 3,669.0

$ $

6,480.0 4,267.0

$ $

6,620.0 4,168.0

$ $

7,171.0 4,453.0

$ $

7,352.0 5,911.0

$ $

8,396.0 6,097.0

$ 12,094.0 $ 6,091.0

$ 10,250.0 $ 5,786.0

$ $

8,441.0 6,903.0

$ 12,105.0 $ 8,493.0

$ 16,820.0 $ 8,527.0

Intangibles Other Long-Term Assets

$ $

547.0 8,549.0

$ $

1,960.0 8,916.0

$ $

1,917.0 8,129.0

$ $

2,579.0 8,214.0

$ $

3,553.0 7,685.0

$ $

3,989.0 8,860.0

$ $

$ $

$ $

5,135.0 9,484.0

$ 12,219.0 $ 10,452.0

$ 12,787.0 $ 10,046.0

Total Assets

$ 19,145.0

Accts Rec Inventory Other Current Assets Total Current Assets

$ 21,623.0

3,836.0 9,306.0

3,821.0 9,570.0

$ 20,834.0

$ 22,417.0

$ 24,501.0

$ 27,342.0

$ 31,327.0

$ 29,427.0

$ 29,963.0

$ 43,269.0

$ 48,180.0

$ $ $

$ $ $

$ $ $

$ $ $

$ $ $

$ $ $

$ $ $

929.0 3,268.0 567.0

$ $ $

$ $ $

4,126.0

$

Liabilities & Stockholders' Equity Accts Payable Short-Term Debt

$ $ $

3,141.0 4,462.0 1,037.0

$ $ $

3,714.0 5,373.0 769.0

3,905.0 4,816.0 600.0

3,679.0 3,899.0 851.0

3,692.0 2,655.0 994.0

4,058.0 2,906.0 922.0

4,283.0 6,021.0 667.0

4,493.0 4,546.0 797.0

133.0 258.0

536.0 281.0

Taxes Payable Accrued Liabilities

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

Other Short-Term Liabilities

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

Total Current Liabilities Long-Term Debt

$ $

8,640.0 687.0

$ $

9,856.0 854.0

$ $

9,321.0 835.0

$ $

8,429.0 1,219.0

$ $

7,341.0 2,701.0

$ $

7,886.0 2,517.0

$ 10,971.0 $ 1,157.0

$ $

9,836.0 1,154.0

$ $

Other Long-Term Liabilities

$

1,415.0

$

1,400.0

$

1,362.0

$

1,403.0

$

2,659.0

$

2,849.0

$

$

2,082.0

$

Total Liabilities

$ 10,742.0

$ 12,110.0

$ 11,518.0

$ 11,051.0

$ 12,701.0

$ 13,252.0

$ 15,392.0

$ 13,072.0

$ 13,043.0

$ 21,525.0

$ 24,435.0

Total Equity

$

$

$

9,316.0

$ 11,366.0

$ 11,800.0

$ 14,090.0

$ 15,935.0

$ 16,355.0

$ 16,920.0

$ 21,744.0

$ 23,745.0

Total Liabilities & Equity

$ 19,145.0

$ 20,834.0

$ 22,417.0

$ 24,501.0

$ 27,342.0

$ 31,327.0

$ 29,427.0

$ 29,963.0

$ 43,269.0

$ 48,180.0

8,403.0

9,513.0

$ 21,623.0

3,264.0

-

-

$

-

$ 12,834.0

$ 15,770.0

8,890.0 1,314.0

$ 13,225.0 $ 3,277.0

$ 16,587.0 $ 2,877.0

2,839.0

$

$

5,023.0

4,971.0

Cash Flows Statement Cash Flows From Operating Activities Net Income

$

Depr & Amort Deferred Taxes

$ $

Other

$

Cash from Operations

$

3,533.0

$

2,431.0

$

2,177.0

$

3,969.0

$

3,050.0

$

$

4,847.0

$

$

5,981.0

$

6,026.0

645.0 $ (38.0) $

792.0 97.0

$ $

773.0 3.0

$ $

803.0 56.0

$ $

806.0 40.0

$ $

850.0 (188.0)

$ $

893.0 162.0

$ $

932.0 $ (88.0) $

938.0 $ (35.0) $

1,163.0 109.0

$ $

1,312.0 (45.0)

$

563.0

$

632.0

$

(718.0)

$

846.0

$

447.0

$

66.0

$

707.0

$

(26.0) $

$

3,883.0

$

3,585.0

$

$

4,742.0

$

5,456.0

$

5,968.0

$

6,423.0

$

(707.0) 3,433.0

4,110.0

4,347.0

4,872.0

$

5,080.0

5,957.0

$

(103.0) $ 7,150.0

$

68.0 7,361.0

Cash Flows From Investing Activities Cap Ex Purchase of Business

$ $

(863.0) $ (1,428.0) $

Other

$

130.0

Cash from Investing

$ (2,161.0) $ (3,421.0) $ (1,165.0) $ (1,188.0) $ (1,187.0) $

$

(1,069.0) $ (1,876.0) $ (476.0) $

(733.0) $ (397.0) $ (35.0)

$

(769.0) $ (651.0) $ 232.0

$

(851.0) $ (544.0) $ 208.0

$

(812.0) $ (359.0) $ 235.0

$

(936.0) $

(755.0) $ (267.0) $ 519.0

$

(899.0) $ (637.0) $ 40.0

$

(1,407.0) $ (901.0) $

(1,648.0) $ $

(1,927.0) -

608.0

(5,071.0) $

(1,974.0)

$

(503.0) $ (1,496.0) $ (1,700.0) $ (6,719.0) $ (3,901.0)

Cash Flows From Financing Activities Net Issuance of Stock Net Issuance of Debt Dividends Other

$ $ $ $

Cash from Financing Currency Adj Change in Cash

$ $

(1,261.0) $ 1,818.0 $ (1,480.0) $ (410.0) $

$ (1,333.0) $ $ (89.0) $

153.0 $ 3,411.0 $ (1,580.0) $ (2,455.0) $

198.0 3,671.0 (1,685.0) (4,256.0)

$ $ $ $

(113.0) 3,011.0 (1,791.0) (3,937.0)

$ $ $ $

(584.0) 1,622.0 (1,987.0) (2,378.0)

$ $ $ $

(1,342.0) 1,026.0 (2,166.0) (1,119.0)

$ $ $ $

(1,546.0) $ 3,030.0 $ (2,429.0) $ (1,316.0) $

(1,825.0) $ 178.0 $ (2,678.0) $ (2,460.0) $

(2,268.0) 617.0 (2,911.0) (2,021.0)

$ $ $ $

(471.0) $ (2,072.0) $ (2,830.0) $ (3,327.0) $ (3,601.0) $ (2,261.0) $ (6,785.0) $ (6,583.0) $ $ (37.0) $

208.0

$ $

47.0

$ $

260.0

$ $

1,102.0

$ $

3,345.0

$ $

3,585.0

$

4,110.0

$

4,742.0

$

5,456.0

$

5,968.0

$

$ (2,006.0) $

$ (2,261.0) $

(219.0) 9,979.0 (3,149.0) (5,638.0) 973.0 -

$ $ $ $

(42.0) 8,193.0 (3,338.0) (5,250.0)

$

(437.0)

$ $

-

Free Cash Flow Cash from Operations

$

Cap Ex

$

Free Cash Flow Book Value Per Share

$

3,433.0

$

(863.0) $ 1,825.0

3,883.0

$

(1,069.0) $

(733.0) $

(769.0) $

(851.0) $

(812.0) $

(755.0) $

6,423.0

$

(899.0) $

5,957.0

$

7,150.0

$

7,361.0

(1,407.0) $

(1,648.0) $

(1,927.0)

$

2,154.0

$

2,217.0

$

2,679.0

$

3,005.0

$

4,385.0

$

4,985.0

$

4,905.0

$

4,489.0

$

5,496.0

$

5,411.0

#DIV/0! $

3.83

$

3.75

$

4.57

$

4.75

$

5.72

$

6.56

$

6.83

$

7.20

$

9.33

$

10.14

Company Name

ticker

Coca-Cola Co.

KO

2/24/2009

User Growth

User Input Params

all figures in $Mil

Desired MOS 50%

Growth 14.5%

Discount % 9.0%

1998

1999

2000

$

Price 43.06 2001

Share Value Buy under $ 54.75 $ 27.37 Financial Data 2002 2003

Actual D/C % 21%

52Wk High $61.90

52Wk Low $40.28

2004

2005

2006

2007

Income Sheet Data Revenue

$

18,813.0

$

19,805.0

$

20,458.0

$ 20,092.0

$ 19,564.0

$

21,044.0

$ 21,962.0

$ 23,104.0

$ 24,088.0

$ 28,857.0

Gross Profit Operating Income Net Income Diluted EPS

$ $ $ $

13,251.0 4,967.0 3,533.0 -

$ $ $ $

13,796.0 3,982.0 2,431.0 1.0

$ $ $ $

14,254.0 3,691.0 2,177.0 0.9

$ 14,048.0 $ 5,352.0 $ 3,969.0 $ 1.6

$ 12,459.0 $ 5,458.0 $ 3,050.0 $ 1.2

$ $ $ $

13,282.0 5,221.0 4,347.0 1.8

$ 14,324.0 $ 5,698.0 $ 4,847.0 $ 2.0

$ 14,909.0 $ 6,085.0 $ 4,872.0 $ 2.0

$ 15,924.0 $ 6,308.0 $ 5,080.0 $ 2.2

$ 18,451.0 $ 7,252.0 $ 5,981.0 $ 2.6

$ $

3,433.0 1,825.0

$ $

3,883.0 2,154.0

$ $

3,585.0 2,217.0

$ $

4,110.0 2,679.0

$ $

4,742.0 3,005.0

$ $

5,456.0 4,385.0

$ $

$ $

6,423.0 4,905.0

$ $

5,957.0 4,489.0

$ $

$

6,380.0

$

6,480.0

$

6,620.0

$

7,171.0

$

7,352.0

$

8,396.0

$ 12,094.0

$ 10,250.0

$

8,441.0

$ 12,105.0

Current Liabilities $ Total Liabilities $ Tangible Shareholder Equity $

8,640.0 10,742.0 7,856.0

$ $ $

9,856.0 12,110.0 7,553.0

$ $ $

9,321.0 11,518.0 7,399.0

$ 7,341.0 $ 12,701.0 $ 8,247.0

$ $ $

7,886.0 13,252.0 10,101.0

$ 10,971.0 $ 15,392.0 $ 12,099.0

$ 9,836.0 $ 13,072.0 $ 12,534.0

$ 8,890.0 $ 13,043.0 $ 11,785.0

$ 13,225.0 $ 21,525.0 $ 9,525.0

Cash Flow Data Cash from Operations Free Cash Flow

5,968.0 4,985.0

7,150.0 5,496.0

Balance Sheet Data Current Assets

$ 8,429.0 $ 11,051.0 $ 8,787.0

Margins Gross Margin Operating Margin Net Margin Current Assets>1.5 times

70.4% 26.4% 18.8% 73.8%

69.7% 20.1% 12.3% 65.7%

69.7% 18.0% 10.6% 71.0%

69.9% 26.6% 19.8% 85.1%

63.7% 27.9% 15.6% 100.1%

63.1% 24.8% 20.7% 106.5%

65.2% 25.9% 22.1% 110.2%

64.5% 26.3% 21.1% 104.2%

66.1% 26.2% 21.1% 94.9%

63.9% 25.1% 20.7% 91.5%

18.3% 9.7% 624.9% 0.0% 0.0%

22.0% 10.9% 558.5% 11.9% 27.1%

23.1% 10.8% 582.0% 10.3% 23.1%

23.5% 13.3% 572.9% 18.4% 38.4%

22.1% 15.4% 549.1% 13.0% 26.3%

28.4% 20.8% 620.0% 16.8% 33.6%

30.2% 22.7% 537.9% 16.5% 32.3%

31.1% 21.2% 575.5% 16.0% 30.2%

28.2% 18.6% 497.5% 17.1% 30.5%

30.8% 19.0% 468.7% 16.3% 30.9%

127.8% 7.6% 17.0%

127.3% 8.2% 17.8%

123.6% 8.2% 19.2%

97.2% 9.7% 24.2%

107.6% 18.6% 23.7%

94.1% 15.2% 33.1%

96.6% 6.8% 32.4%

79.9% 6.6% 37.5%

77.1% 7.2% 34.4%

99.0% 13.1% 25.5%

1998-2005 6.9% 15.2% 23.3% 14.3% 14.5%

1999-2006 6.6% 11.1% 25.8% 17.0% 16.3%

2000-2007 3.7% 13.8% 28.3% 18.8% 16.4%

1998-2003 5.2% 19.2% 22.6% 12.1% 12.5%

1999-2004 9.9% 18.3% 23.3% 14.3% 14.8%

2000-2005 11.1% 17.2% 25.9% 18.1% 16.3%

2001-2006 6.0% 10.9% 28.3% 19.7% 16.6%

2002-2007 2.9% 12.8% 29.3% 19.9% 16.4%

28.7% 3.0% 67.4% 26.1% 19.3%

30.4% 2.8% 65.7% 26.1% 20.2%

30.7% 5.0% 64.9% 26.1% 20.7%

26.7% 2.3% 69.7% 25.6% 17.2%

29.7% 2.1% 67.4% 25.4% 17.7%

31.2% 2.5% 64.9% 26.1% 20.2%

31.4% 3.7% 64.9% 26.3% 20.9%

30.7% 8.1% 64.2% 26.1% 20.9%

30.5% 2.9% 65.3% 26.1% 20.2%

0.0% 9.4%

12.0% 6.3%

16.5% 10.4%

0.0% 9.7%

15.3% 9.0%

18.3% 12.4%

6.2% 7.7%

15.9% 8.6%

13.6% 9.2%

Efficiency & Profitability CROIC FCF/Sales Inventory Turnover Return On Assets (ROA) Retun On Equity (ROE)

Debt Related Debt to Equity Capitalization Ratio FCF to Debt

Multi-Year Performance Shareholder Equity Free Cash Flow CROIC FCF/Sales ROA ROE Revenue Growth Gross Margin Operating Margin Net Margin Earnings Growth Cash from Ops Growth

Median 6.3% 14.5% 25.9% 17.5% 16.3%

Projection of future Free Cash Flow Growing at 14.5%

$

Growing at 3%

$

2008 6,293 2018 17,197

$ $

2009 7,207 2019 17,713

$ $

2010 8,252 2020 18,244

2011 $8,979.55 2021 $ 18,792

Company Valuation Total Value Shares Outstanding Per Share Value Margin of Safety Purchase Price Current Price Actual Discount

$ $ $ $

2012 $10,152.11 2022 $ 19,355

2013 $11,477.79 2023 $ 19,936

2014 $12,976.58 2024 $ 20,534

2015 $13,369.03 2025 $ 21,150

2016 $14,940.21 2026 $ 21,785

2017 $16,696.03 2027 $ 22,438

Free Cash Flow and Tangible Shareholder Equity Trend 127,620

$14,000.0

2331 54.75 50% 27.37

$12,000.0

43.06 21%

$6,000.0

$10,000.0 $8,000.0

$4,000.0

$12,099.0$12,534.0$11,785.0 FCF

Shareholder Equity

$7,856.0 $7,553.0 $7,399.0

$10,101.0

$8,787.0

$9,525.0

$8,247.0

$4,385.0

$4,985.0 $4,905.0 $4,489.0 $5,496.0

$2,679.0 $3,005.0 $1,825.0 $2,154.0 $2,217.0

$2,000.0 $1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Multi-Year Performance Graph 200.0%

Gross Margin

Operating Margin

Net Margin

Earnings Growth

ROA

ROE

180.0% 160.0%

30.7%

30.4% 28.7%

140.0% 120.0%

26.7%

16.4%

16.3% 12.0%

16.5%

100.0%

14.5% 0.0% 19.3%

20.2%

20.7%

80.0%

26.1%

26.1%

26.1%

67.4%

65.7%

64.9%

1998-2005

1999-2006

2000-2007

31.2%

29.7%

30.7% 31.4%

16.3%

14.8%

16.4% 16.6%

12.5% 0.0% 17.2%

15.3%

18.3%

17.7%

20.2%

20.9%

20.9%

25.6%

25.4%

26.1%

26.3%

26.1%

69.7%

67.4%

64.9%

64.9%

64.2%

1998-2003

1999-2004

2000-2005

2001-2006

2002-2007

15.9%

6.2%

60.0% 40.0% 20.0% 0.0%

Margin Percentages 80.0%

70.4%

69.9%

69.7%

69.7%

70.0%

63.7%

63.1%

65.2%

66.1%

64.5%

63.9%

60.0% Gross Margin

50.0%

Operating Margin Net Margin

40.0% 30.0%

27.9%

26.6%

26.4% 20.1%

18.8% 20.0%

19.8%

18.0%

12.3%

10.6%

1999

2000

24.8% 20.7%

25.9% 22.1%

26.3% 21.1%

2003

2004

2005

26.2% 21.1%

25.1% 20.7%

2006

2007

15.6%

10.0% 0.0% 1998

2001

2002

Efficiency & Profitability 45.0%

CROIC

FCF/Sales

Debt

ROA

140.0%

ROE

Debt to Equity

Capitalization Ratio

FCF to Debt

40.0% 120.0% 35.0% 100.0%

30.0%

80.0%

25.0% 20.0%

60.0%

15.0% 40.0% 10.0% 20.0%

5.0% 0.0%

0.0% 1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Sales, Receivables, Inventory $35,000.0

Sales

Accts Receivable

Inventory

$30,000.0 $25,000.0 $20,000.0 $15,000.0 $10,000.0 $5,000.0 $1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

TTM

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Company Name

ticker

Coca-Cola Co.

KO

2/24/2009

all figures in $Mil

Desired MOS

Growth

Discount %

50%

14.5%

9%

Price $

Share Value

43.06

$

54.75

Buy under $

Actual D/C % 52Wk High

27.37

21%

$

61.90

52Wk Low $

40.28

Historical Stock Price Vs Intrinsic Value Per Share 80 Historical Price

Intrinsic Value

Buy Price

Linear (Historical Price)

70

60

50

40

30

20

10

0 3/9/1998

3/9/1999

3/9/2000

3/9/2001

3/9/2002

3/9/2003

3/9/2004

3/9/2005

3/9/2006

3/9/2007

3/9/2008

Company Name

ticker

Coca-Cola Co.

KO

2/24/2009

all figures in $Mil

User Input Params

Desired MOS

Growth

66%

14.5%

1998 $

Diluted EPS

$

Earnings Growth EPS Weighted Average Earnings Growth EPS Weighted Average

2008 2.85

Price $

Actual DC% Share Value

43.06

Earnings 2002 2003 $ 1.23 $ 1.77

1999 0.98

$

2000 0.88

$

2001 1.60

$

2009 3.13

$

2010 3.50

$

2011 3.86

$

P/B Ratio

$

$

81.35

Buy under

47%

27.66

$

Net Net Working Capital

4.62

$

2004 2.00

$

(5.33) 2005 2.04

$

2006 2.16

$

2007 2.57

Multi-Year Performance 1998-2003 1999-2004 2000-2005 2001-2006 2002-2007 1998-2001 1999-2002 2000-2003 0.0% 15.3% 18.3% 6.2% 15.9% 0.0% 7.9% 26.2% $ 1.08 $ 1.41 $ 1.59 $ 1.80 $ 1.96 $ 0.87 $ 1.17 $ 1.37 2001-2004 2002-2005 2003-2006 2004-2007 Median (1998-2007) 8.3% 7.72% 18.37% 6.86% 8.72% $1.62 $ 1.65 $ 1.76 $ 1.99 $ 2.19

Company Stats Normal Earnings Expected 5 Year Growth 20 yr AA Corp Bond Rate Book Value Per Share Price to Book Ratio Enterprise Value Per Share

$

2.71 14.51% 5.94 9.33 4.62 50.45

Company Valuation

$3.50

$

Desired MOS Purchase Price Current Price Actual Discount

$ $

81.35 66.00% 27.66 43.06 47%

$2.85

Linear (EPS)

$2.57 $2.50 $2.00 $1.50

$2.00

$2.04

2004

2005

$2.16

$1.77

$1.60 $1.23

$1.00

Per Share Value

$3.13

EPS

$3.00

$0.98

$0.88

1999

2000

$0.50 $$1998

2001

2002

2003

2006

2007

2008

2009

Company Name

ticker

Coca-Cola Co.

KO

2/24/2009

Enter Competitor Tickers Into Boxes Below

all figures in $Mil

KO

PEP

Industry

Ranking

Stock Price

43.06

51.68

Error

Error

Error

Error

NA

NA

Market Cap (millions)

99,550

80,430

#VALUE!

#VALUE!

#VALUE!

#VALUE!

NA

NA

P/E Ratio (TTM)

16.94

15.66

Error

Error

Error

Error

9.27

1

Price to Sales (TTM)

3.05

1.8

Error

Error

Error

Error

0.88

1

Price to Book (MRQ) Price to Tangible Book (MRQ)

4.75 12.21

6.38 15.24

Error Error

Error Error

Error Error

Error Error

2.45 4.42

2 2

Price to Cash Flow (TTM) Price to Free Cash Flow (TTM)

13.83 32.81

11.79 38.8

Error Error

Error Error

Error Error

Error Error

5.44 119.28

1 2

Valuation Ratios

Dividends Dividend Yield Dividend Yield - 5 Year Avg.

3.9 0

3.39 2

Error Error

Error Error

Error Error

Error Error

1.12 1.41

1 2

Dividend 5 Year Growth Rate Payout Ratio (TTM)

0

21.24

Error

Error

Error

Error

8.09

2

0

50.36

Error

Error

Error

Error

9.82

2

-2.8 3.05

3.1 1.8

Error Error

Error Error

Error Error

Error Error

-0.07 0.88

2 1

Growth Rates Sales (MRQ) vs Qtr. 1 Yr. Ago Sales (TTM) vs TTM 1 Yr. Ago

8.9

9.91

Error

Error

Error

Error

7.71

2

EPS (MRQ) vs Qtr. 1 Yr. Ago EPS (TTM) vs TTM 1 Yr. Ago

-17.12 -3.16

-40.7 -6.21

Error Error

Error Error

Error Error

Error Error

-59.78 0

1 1

EPS - 5 Yr. Growth Rate Capital Spending - 5 Yr. Growth Rate

7.08 19.37

9.44 12.71

Error Error

Error Error

Error Error

Error Error

-12.16 16.3

2 1

0.77 0.94 13.58

0.94 1.23 64.91

Error Error Error

Error Error Error

Error Error Error

Error Error Error

1.69 2.09 20.05

2 2 2

45.49

67.96

Error

Error

Error

Error

27.92

2

Gross Margin (TTM)

64.39

52.95

Error

Error

Error

Error

18.79

1

Gross Margin - 5 Yr. Avg. EBITD Margin (TTM)

64.69 30.28

54.92 19.47

Error Error

Error Error

Error Error

Error Error

47.16 0

1 1

EBITD - 5 Yr. Avg. Operating Margin (TTM) Operating Margin - 5 Yr. Avg.

30.02

21.39

Error

Error

Error

Error

12.91

1

26.44 26.04 23.29 26.83 18.18

16.03 17.69 16.23 18.68 11.89

Error Error Error Error Error

Error Error Error Error Error

Error Error Error Error Error

Error Error Error Error Error

6.24 9.03 5.67 9.1 4.3

1 1 1 1

20.49

13.74

Error

Error

Error

Error

6.32

13.86 15.82 20.17 23.22

14.56 15.94 19.02 21.19

Error Error Error Error

Error Error Error Error

Error Error Error Error

Error Error Error Error

3.92 6.91 5.44 9.64

27.51 30.13

34.77 33.86

Error Error

Error Error

Error Error

Error Error

7.79 12.53

0 0

218439 25970

Error Error

Error Error

Error Error

Error Error

51149 4850

NA NA

9.97 5.16 0.76

9.54 8.46 1.22

Error Error Error

Error Error Error

Error Error Error

Error Error Error

4.11 2.68 0.35

NA NA

Sales - 5 Yr. Growth Rate

Financial Strength Quick Ratio (MRQ) Current Ratio (MRQ) LT Debt to Equity (MRQ) Total Debt to Equity (MRQ)

Profitability

Pre-Tax Margin (TTM) Pre-Tax Margin - 5 Yr. Avg. Net Profit Margin (TTM) Net Profit Margin - 5 Yr. Avg.

1 1

Management Effectiveness Return On Assets (TTM) Return On Assets - 5 Yr. Avg. Return On Investment (TTM) Return On Investment - 5 Yr Avg Return On Equity (TTM) Return On Equity - 5 Yr. Avg.

2 2 1 1 2 2

Efficiency Revenue/Employee (TTM) Net Income/Employee (TTM) Receivable Turnover (TTM) Inventory Turnover (TTM) Asset Turnover (TTM)

2

Company Name

ticker

Coca-Cola Co.

KO

2/24/2009

Net Profit Margin

Cash Flow (Continuing Operations) 21%

18%

21%

21%

22%

21%

7992

20%

18%

7571

16%

7150 5957

11%

6423

5968

12%

5456

4742

4110

3585

3883

TTM 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 18% 18% 21% 21% 21% 22% 21% 16% 20% 11% 12% -1.7% 0.0% -4.5% 6.8% 32.5% -21.1% 85.6% -13.3% -% Change -12.3%

TTM 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 7992 7571 7150 5957 6423 5968 5456 4742 4110 3585 3883 5.9% 20.0% -7.3% 7.6% 9.4% 15.1% 15.4% 14.6% -7.7% -% Change

Magic Formula Investing -- Return on Capital

Magic Formula Investing -- Earnings Yield

9.7%

0.96 0.71

0.66

0.66

0.76

0.66 0.51

0.63

0.76

0.74

0.79

8.9% 6.1%

7.0%

8.2%

7.4%

7.2% 5.5%

6.7% 3.6%

3.8%

Now 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 0.71 0.66 0.66 0.76 0.66 0.51 0.63 0.76 0.96 0.74 0.79 0.6% -13.9% 14.8% 29.7% -19.1% -16.5% -21.3% 30.8% -6.2% -% Change

Now 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 9.7% 8.9% 6.1% 7.0% 8.2% 7.4% 5.5% 7.2% 6.7% 3.6% 3.8% -11.8% -14.6% 10.1% 34.9% -23.4% 7.3% 85.5% -4.9% -% Change 44.2%

Return on Assets (ROA)

Return on Equity (ROE) 17%

17%

14%

16%

16%

16%

18% 27.5% 10%

30.0%

29.8%

30.4%

30.9%

33.7%

35.0% 23.4%

11%

25.6%

0% 0% 2008/12 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 0% 0% 14% 17% 17% 16% 16% 16% 18% 10% 11% -18.8% 2.4% 7.1% -2.5% -1.9% -8.5% 70.2% -7.1% -% Change -100.0%

0.0% 0.0% 2008/12 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 0.0% 0.0% 27.5% 30.0% 29.8% 30.4% 30.9% 33.7% 35.0% 23.4% 25.6% -8.3% 0.7% -2.0% -1.6% -8.3% -3.7% 49.6% -8.6% -% Change -100.0%

Current Ratio

Quick Ratio

0.9

0.9

0.9

0.9

1.0

1.1

1.1

1.0 0.9

0.7

0.7

2008/12 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 0.9 0.9 0.9 0.9 1.0 1.1 1.1 1.0 0.9 0.7 0.7 2.4% -3.6% -8.9% -5.5% 3.5% 6.3% 17.7% 19.8% 8.0% -% Change

0.8

0.8

0.9 0.7

0.8

1.0

0.9

0.8

0.7

0.6

0.5

2008/12 2008/12 2007/12 2006/12 2005/12 2004/12 2003/12 2002/12 2001/12 2000/12 1999/12 0.8 0.8 0.7 0.8 0.9 1.0 0.9 0.8 0.7 0.6 0.5 2.9% -2.3% -14.8% -7.8% 7.4% 9.8% 13.7% 21.8% 8.7% -% Change

Company Name

ticker

Coca-Cola Co.

KO

2/24/2009

Company Assessment: Quantitative Valuation

Criteria over 10yrs

Points

User Points

DCF Valuation Discount

> 25% or 50% depending on moat

21%

1

1

Graham Intrinsic Value Discount

> 66%

47%

1

1

Points

User Points

Margins, Profit and Growth

Criteria over 10yrs

Median Revenue growth

10%

Median Gross Margin Median Operating Margin Median Net Margin Median EPS growth Business and Management Performance

Value

Value

30%

2.9% 65.3%

0 2

15%

26.1%

1

10%

20.2%

2

10%

8.3%

0

Criteria over 10yrs

Points

Value

Cash growth from Operations CROIC is postive and capable of paying off financing

15%

9.2%

0

13%

Median FCF growth positive and consistent Median FCF/Sales

10%

25.9% 14.5%

2 1

Consistent over 10yrs

17.5% N/A

2

Consistent ROE (manually check) Consistent ROA (manually check)

Consistent over 10yrs

N/A

7%

Balance Sheet

Criteria for TTM

Current assets > 1.5 x current liabilities

> 1.5 x current liabilities

Price to Book ratio < 2 Debt to Equity FCF to Debt Capitalization Ratio Intangibles % of assets

N/A N/A Points

Value

User Points

User Points

0.9

1

1

N/A

4.62

N/A

N/A

< 100%

99.0%

> 10%

25.5%

1 2 2 1

1

< 30%

13%

< 15% of assets

26.5%

Company Assessment: Qualitative The Coca-Cola Company is a manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world. Finished beverage products bearing its trademarks are sold in more than 200 countries. The Company markets nonalcoholic sparkling brands, which includes Diet Coke, Fanta and Sprite. Its business is nonalcoholic beverages, principally sparkling beverages, but also a variety of still beverages. The Company manufactures beverage concentrates and syrups, which it sells to bottling and canning operations, fountain wholesalers and some fountain retailers, as well as finished beverages, which it sells primarily to distributors. The Company owns or licenses more than 450 brands, including diet and light beverages, waters, enhanced waters, juices and juice drinks, teas, coffees, and energy and sports drinks.

Competitive Advantage Stable market share?

Comment

2 2

Max Points max 2 max 2

2

max 2

2 1 1

max 2 max 2 max 2

User Points

Max Points

1

max 2

Able to increase prices and retain customers?

1

max 1

Compete on price? (1 for no, 0 for yes)

1

max 1

Barriers of entry to the business? Diverse customers? (1 for diverse, 0 for concentrated)

1 1 2

max 1 max 1

Dominant company in industry, segment? Low barriers to entry and exit? Experience goods (brand effect, trademarks) High switching costs? Network effect? E.g. eBay Business Model Growth due to: a) existing product / existing market b) existing product / new market c) new product / existing market d) new product / new market

Comment (yes/no) (yes/no) (yes/no) (yes/no)

Involved in competition? Monopoly, duopoly, crowded Company has a recurring revenue stream? Capital intensive company? (1 for no, 0 for yes)

a) No b) Yes c) Yes d) Yes

User Points

1 1

max 2 max 1 max 1

Management High insider ownership? Candid management on positives and negatives?

Comment

User Points 1

Max Points max 1

1 1

max 1 max 1

1

max 1

User Points

Max Points

1

max 1

Can company adapt to changing industry environment?

1

max 1

Industry leader or lagger? (1 for leader, 0 for lagger)

1

max 1

Management performance at previous jobs? Compensation levels compared to sales? Industry Boring industry? (1 for slow, 0 for fast industry)

Comment

Psychological Factors to Consider. Not Weighted.

Comment

Recency bias? Hindsight bias?

no no

Framing issues correctly and in different manners?

DCF, graham, compare to peers

Is there a data framing bias?

maybe

Am I too overconfident on the situation?

no

Performed probability analysis for -ve factors? Too much loss aversion?

no no

Sunk cost mentality?

no

Slow in changing opinion?

no

Psychological denial ? Bias from commitment and consistency tendency? Pavlovian association? Social proof bias?

no no no no

Status quo bias? False consensus bais?

no no

Category

Total Points out of 5

Valuation

2.0

Margins, Profit and Growth Business and Management Performance Balance Sheet Competitive Advantage Business Model Management

2.5 2.5 3.5 4.2 4.5 5.0

Low Risk 3.0

High Growth 2.5

Under Valued 2.0

Well Managed 4.8

Good Financial Health 3.5

Low Risk 5.0 4.0 Strong Moat

3.0

High Growth

2.0 1.0 0.0

Good Financial Health

Under Valued

Well Managed

Strong Moat 4.2