Financial Manager Referring Stocks to a Client

Financial Manager Referring Stocks to a Client: Coco-Cola Stock
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Financial Manager Referring Stocks to a Client: Coca Cola Stock
I recommend my client invest in Coca-Cola stock. As a financial manager, it is essential to communicate the existing problem with their financial plan, properly suggest a solution and ask for the client's thoughts (CNNMoney, 2021). Therefore, it is crucial to justify choosing Coca-Cola stock and explain the relevant financial, economic, and other factors for selecting the stock. The first reason for selecting Coca-Cola stock is the brand portfolio. The company has more than 450 beverage brands and has recently ventured into alcoholic beverages known as Topo Chico hard seltzer. In addition, the company has four of the top five beverages drunk worldwide: Sprite, Diet Coke, and Fanta. Also, it invests substantially in advertising campaigns and has taken a more aggressive approach to new media channels such as Facebook and Instagram. In addition, significant marketing investment around the world aids in maintaining this recognition. Furthermore, the company encourages both awareness and loyalty by pricing its products competitively.
Consequently, the company is well-positioned to gain from rising market expansion in China, Africa, Russia, Mexico, and Latin America. Coca-Cola has the financial flow and skills to capitalize on these opportunities (Taylor, 2021). Barriers to entry are another aspect to consider when buying Coca-Cola stock. Coca-Cola has one of the largest distribution footprints in the world. Packaging plants, distributors, dealers, and retailers sell its products in more than 190 countries worldwide. It is the largest beverage production company globally, with 2 billion bottles per day.
Ratio Analysis
Graham and Dodd's stock valuation approach looks for stocks with a higher net income ratio, a high current ratio, a low Price to Earnings (P/E) margin, a high payout ratio, a price below market price, and total net valuation (Ponzio, 2021). A low P/E ratio, on the other hand, can indicate that the company is a bargain or that it does not foresee much growth, while a high one can indicate that the stock is costly or that it predicts rapid growth. The current ratio evaluates a firm's ability to meet current debt obligations with current assets. Divide current assets by current liabilities to get the current ratio. Companies with a current ratio of less than one are regarded as unable to satisfy financial obligations, so the greater the ratio, the better. For example, Coca-Cola now has a ratio of 1.01. It signifies that if all of the company's creditors demanded payment today, the company would comply.
The quick ratio is a ratio that signals a company's potential to pay current creditors with cash, marketable securities, and accounts receivable. Quick ratio=Cash+marketable securities+account receivable Current Liabilities. Coca-Cola's quick ratio is 0.81. It means that they could pay up to 81 percent of current liabilities.
Stock Price Analysis
As of July 2021, the Company's Gross Profit Margin had reduced by 2 percent compared to July 2020. The decrease resulted from negative packaging and channeling mix, unfavora...