Soft Drink Industry

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Common Sizing Financial Statements
Common sizing financial statements provide a comparison of the financial performance of different companies within the soft drink industry. It provides the management with the trend in the financial performance of the company within a given timeline as compared to other companies of different sizes in the same industry. The statements can be used for benchmarking to see where a company stands in the industry as reflected by the elements captured in the financial statements (Pratt and Salimi 189). As a result, the management is in a position to identify the strengths of the company in the market. Furthermore, it provides an insight into the weakness and threats the company faces from its competitors in the industry. In this case, the management can adopt measures that will enable the company to have a competitive advantage in the market.
Coca-Cola’s tangible resources include strong financial and physical resources. Under the physical resources, the company owns property inform of building and machinery, plants and equipment. The company has a modern head offices split into four departments and bottling partners. The departments include the marketing, Human Resources, the ICT and Sales. At the factory, the company is divided into two parts, that is, the IC and Production. The intangible resources include the technological resources, the company’s reputations, technical expertise, intellectual property rights and goodwill.

Lastly, the human resources include employees and employee retention programs such as employee engagement. The capability of the company consists of its financial ability to go large scale in new markets. They have sufficient finances to construct infrastructure, train their staff and create efficient distribution networks. They are also capable of incurring losses resulting from venturing into non-profitable or highly competitive new markets. An example is the case of the Vietnam market where they incurred up to $200 million losses for ten consecutive years but still invest over $200 million for the year 2013-2015. It also has a dynamic organization capability (Thanh 1). The company’s core competency is its brand reputation with is ranked among the three most valuable brands in the world. Other core competencies include effective distribution systems and administrative control
Lessons learned when comparing the two company common-size income statements is that companies within the same industry can still perform incredibly well in the average sales after eliminating any form of price competition. Moreover, having a better brand reputation reduces the company’s expenditure on sales and increase the net profit margins.

Works Cited
Pratt, Jamie, and Anwar Y. Salimi. “Financial accounting in an economic context.” Issues in Accounting Education 25.1 (2010): 178-179.
Thanh, Huyen. “Coca-Cola to Increase Investment Worth of $580 Million.” VnEconomicTimes – Your Business Resources, Vietnam Economic Times, 21 Jan. 2017, vneconomictimes.com/article/business/coca-cola-to-increase-investment-worth-of-580-million.