Abstract This research considers The Coca-Cola Company from an ...

Coca-Cola 6
Coca-Cola has pursued a strategy that includes acquiring other companies in order to
expand its market share. This includes the acquisition of Glaceau, manufacturer of Vitamin
water, which is part of Coca-Cola's strategy of offering more products which do not have the
negative stereotypes associated with sodas. Such acquisitions can require the addition of debt,
but Coca-Cola has seen its total liabilities decline in recent years. This indicates that the
company is able to move forward without incurring additional debt. This is an important
consideration for shareholders and potential investors as they want to see the company grow, but
are concerned that debt can burden a company to the point that it is no longer able to pursue
attractive market opportunities (2009 Annual 10-K Filing, 2010). This is currently not the
situation at Coca-Cola.
Stock Performance
A company's past stock performance is not an absolute predictor of its future stock
performance as many factors affect stock price, with current economic conditions and events
having a significant effect. Nonetheless, historic performance can indicate whether a stock is
particularly risky, and historic comparisons with competitors can be instructive in understanding
the company's investment potential. The following chart illustrates stock prices for Coca-Cola
and two of its largest competitors, Pepsi and Dr. Pepper/Snapple ("The Coca-Cola Company,"
2009; "Pepsico," 2009; "Dr. Pepper," 2009): *Prices are not available for Dr. Pepper for the
entire five-year period because it was spun off from Cadbury.