Assumptions Base Case-Historical Best Case-Historical Most Recent

Projected Growth 7.5% 7.50%

Operating Margins 21.38% 21.38% 19.70%
Cash/Sales 16.50% 16.50% 16.50%
Accounts Rec/Sales 8.90% 8.90% 8.90%
Inventory/Sales 6.55% 6.55% 6.55%
Net PPE/Sales 28.38% 28.38% 28.38%
Accounts Payables/Sales 4.75% 4.75% 6.31%
Accruals/Sales 15.78% 15.78% 15.50%
WACC 6.583795875555100% 6.58%
Tax Rate 34%
Risk Free Rate 3%
Market Risk Premium 5%
Beta-Equity 90%
Cost of Equity 7.50%
Cost of Debt 4.0%
Most Recent Price Per Share $ 44.97
Number of Shares Outstanding-millions 4405
Market Value of Equity $ 198,093
Market Value of Debt $ 46,020
Debt/Value 18.85%
Payout Ratio 40%
Return on non operating assets 4.0%
Source of External Funds (AFN>0) LT Debt
Projected excess cash (AFN<0) Surplus Cash
Long Run Growth 3%
Main Results 2016 2025
AFN $ (1,980) $ (4,710)
FCF $ 5,115 $ 8,814
FCF to Equity $ 3,948 $ 7,646
FCFE After Dividends $ 1,663 $ 3,595
Estimated Stock Price (WACC Model) $41.48
Most Recent Price Per Share $ 44.97
Market Price to Model Value Variance 7.76%

Current Value when AFN=0 % Change

Operating Margins 21.38% 7.40% -65.39%
Net PPE/Sales 28.38% 33.25% 17.16%
Cash/Sales 16.50% 21.42% 29.82%
Accruals/sales 15.78% 10.58% -32.95%

Decline Scenarios 5.00% 10%

 Base Case 5% Decline 10% Decline
Profit Margins 21.38% 20.31% 19.24%
Cash/Sales 16.50% 17.33% 18.15%
Net PPE/Sales 28.38% 29.80% 31.22%
Accruals/Sales 15.78% 14.99% 14.20%
AFN 2016 $ (2,266) $ (677) $ 905
Cumulative AFN $ (31,798) $ (26,919) $ (22,039)

Sensitivity of Dividends to Payout Policy and Growth

$ 27,885 5.00% 6.00% 7.00%
40% $ 27,885 $ 27,885 $ 27,885
50% $ 27,885 $ 27,885 $ 27,885
60% $ 27,885 $ 27,885 $ 27,885
70% $ 27,885 $ 27,885 $ 27,885
80% $ 27,885 $ 27,885 $ 27,885
DCF Valuation Sensiti
Assumptions as Implied by Current Market
Price Base Case Market Assumptions
Projected Growth 7.5% 8.64%
Operating Margins 21.38% 22.58%
Cash/Sales 16.50% 7.86%
Accounts Rec/Sales 8.90% 0.26%
Inventory/Sales 6.55% NA
Net PPE/Sales 28.38% 19.74%
Accounts Payables/Sales 4.75% 13.39%
Accruals/Sales 15.78% 24.62%
 5% 5%
3 yr Avg 5 yr Avg AFN>0 Pessinistic Optimistic
7.13% 7.88%
20.88% 21.38% Go Down 20.31% 22.45%
19.40% 20.66% Go Up 17.33% 15.68%
9.67% 9.90% Go Up 9.35% 8.46%
6.76% 6.75% Go Up 6.88% 6.22%
30.71% 30.88% Go up 29.80% 26.96%
4.99% 4.75% Go Down 4.51% 4.99%
15.78% 15.20% Go Down 14.99% 16.57%

Cumulative
$ (34,910)
$ 78,834
$ 67,162
$ 27,885

Sensitivity Analysis
AFN Sensitivity
40.00% 29.82%
17.16% Operating Margi ns
20.00%
Net PPE/Sa l es
0.00% Ca s h/Sal es
-20.00% Accrua l s /s a l es
-40.00% -32.95%
15% -60.00%
-80.00% -65.39%
 20.00%
Net PPE/Sa l es
0.00% Ca s h/Sal es
-20.00% Accrua l s /s a l es
-40.00% -32.95%
-60.00%
15% Decline -80.00% -65.39%

18.17%
18.98%
32.64% AFN
13.41% $3,000
$ 2,495
$2,000
$ (17,168)
$1,000
wth
8.00% 9.00% $-
Bas e Ca se 5% Decl i ne 10% Decli ne 15% Decl i ne
$ 27,885 $ 27,885
$(1,000)
$ 27,885 $ 27,885
$ 27,885 $ 27,885 $(2,000)
$ 27,885 $ 27,885
$ 27,885 $ 27,885 $(3,000)
DCF Valuation Sensitivity Analysis

Sensitivity of Estimated Stock Price to Growth and OP Margin Assumptions

$41.48 19.00% 19.50% 20.00% 20.50% 21.00% 21.50% 22.00%

6.50% $ 32.39 $ 33.70 $ 35.01 $ 36.32 $ 37.63 $ 38.93 $ 40.24
7.00% $ 33.52 $ 34.88 $ 36.25 $ 37.62 $ 38.99 $ 40.36 $ 41.73
7.50% $ 34.66 $ 36.10 $ 37.53 $ 38.96 $ 40.39 $ 41.83 $ 43.26
8.00% $ 35.84 $ 37.33 $ 38.83 $ 40.33 $ 41.83 $ 43.33 $ 44.83
8.50% $ 37.03 $ 38.60 $ 40.17 $ 41.73 $ 43.30 $ 44.87 $ 46.43

Method Min Price Max Price

DCF-OPM/GR $ 32.39 $ 48.00
DCF-Pess/OP $ 36.24 $ 38.18
P/E Multiple $ 37.05 $ 51.23
Average Comparables $ 29.24 $ 41.22
Overall Average $ 33.73 $ 44.66
Operating Margi ns
Net PPE/Sa l es
Ca s h/Sal e s
Accrua l s /s al es
Net PPE/Sa l es
Ca s h/Sal e s
Accrua l s /s al es

15% Decl i ne

Shows that the stock is

22.50% overvalued
$ 41.55
$ 43.10
$ 44.69
$ 46.32
$ 48.00
 Summary of Valuation Analysis

Most Recent Stock Price $ 44.97

DCF Base Case $ 41.48 Summary of DCF Valuation
DCF Low Estimate $ 32.39 $60.00
DCF High Estimate $ 48.00
P/Shares Low Estimate $ 24.94 $50.00
P/Sales High Estimate $ 28.36
P/E Low Estimate $ 37.05 Most Recent
$40.00
DCF Bas e Ca s
P/E High Estimate $ 51.23 DCF Low Estim
Comparables Low Estimate $ 29.24 $30.00 DCF Hi gh Esti
Comparables High Estimate $ 41.22
Overall Low Estimate $ 33.73 $20.00
Overall High Estimate $ 44.66
Upside Potential -0.69% $10.00

Downside Potential -25.00%

$-

Summary of Comparable Valuatio

$60.00

$50.00
Most Recent
P/E Low Estim
$40.00 P/E Hi gh Estim
Compara bl es
$30.00 Estimate
Compara bl es
Estimate
$20.00

$10.00

$-
tion Analysis

y of DCF Valuation Upside/Downside Potential-Risk Analysis

0.00%
Ups i de Potentia l
-0.69% Downs ide Potentia l

-5.00%

Most Recent Stock Pri ce -10.00%

DCF Bas e Ca s e
DCF Low Estimate
DCF Hi gh Estimate -15.00%

-20.00%

-25.00%
-25.00%

-30.00%

y of Comparable Valuation

Most Recent Stock Pri ce

P/E Low Estimate
P/E Hi gh Estimate
Compara bl es Low
Estimate
Compara bl es Hi gh
Estimate
Risk Analysis Shareholders of Coke
have a lot more to
loss than gain
Downs ide Potentia l

-25.00%
Scenario Summary
Current Values: Base Case Pessimistic
Changing Cells:
Projected Growth 7.5% 7.5% 7.1%
Operating Margins 21.38% 21.38% 20.31%
Cash/Sales 16.50% 16.50% 17.33%
Accounts Rec/Sales 8.90% 8.90% 9.35%
Inventory/Sales 6.55% 6.55% 6.88%
Net PPE/Sales 28.38% 28.38% 29.80%
Accounts Payables/Sales 4.75% 4.75% 4.51%
Accruals/Sales 15.78% 15.78% 14.99%
Result Cells:
Estimated Stock Price (WACC Model) $ 37.19 $ 37.19 $ 36.24
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.
 Optimistic

7.9%
22.45%
15.68%
8.46%
6.22%
26.96%
4.99%
16.57%

$ 38.18
Scenario Summary
Current Values: Base Case 5% Decline 10% Decline
Changing Cells:
Operating Margin 19.70% 19.70% 18.72% 17.73%
Cash/Sales 16.50% 16.50% 17.33% 18.15%
Net PPE/Sales 28.38% 28.38% 29.80% 31.22%
Accruals/Sales 15.50% 15.50% 14.72% 13.95%
Result Cells:
AFN $ (2,266) $ (2,266) $ (677) $ 905
Cumulative AFN $ (31,798) $ (31,798) $ (26,919) $ (22,039)
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.
 15% Decline

16.75%
18.98%
32.64%
13.17%

$ 2,495
$ (17,168)
Value Drivers Coke
2011 2012 2103 2014 2015
Growth Prospects
Sales Growth 3.17% -2.42% -1.83% -3.70%
Operating Margin Growth 6.16% -5.11% -5.08% -10.09%
Earnings Growth 5.21% -4.82% -17.31% 3.56%
EPS Growth 6.64% -3.24% -16.21% 4.62%

Return On Invested Capital 9.49% 9.33% 8.42% 7.78% 7.29%

Operating Margins 21.82% 22.45% 21.83% 21.11% 19.70%
After Tax Operating Margins 14.40% 14.82% 14.41% 13.93% 13.01%
Invested Capital $ 70,603.00 $ 76,227.00 $ 80,169.00 $ 82,331.00 $ 78,969.00
Capital Turnover 0.66 0.63 0.58 0.56 0.56
Fixed Assets Efficiency 3.12 3.32 3.13 3.14 3.52
Cash Conversion Cycle 19.05 22.95 24.84 17.18 -1.94
Days Inventory 23.92 24.47 25.18 24.26 23.59
Days Recievables 38.06 35.68 37.44 34.95 32.03
Days Payable 42.92 37.20 37.78 42.04 57.56

Financial Structure
Total Liabilities/Assets 60.44% 61.95% 63.16% 67.05% 71.64%
Debt/Assets 35.72% 37.84% 41.17% 45.36% 49.07%
Debt/Equity 0.90 0.99 1.12 1.38 1.73
Invested Capital Equity 2.23 2.32 2.42 2.72 3.09

Value Drivers for Financial Forecasting

2011 2012 2103 2014 2015
Projected Growth
Operating Margins 21.82% 22.45% 21.83% 21.11% 19.70%
Cash/Sales 27.51% 17.58% 22.23% 19.47% 16.50%
Accounts Rec/Sales 10.57% 9.91% 10.40% 9.71% 8.90%
Inventory/Sales 6.64% 6.80% 6.99% 6.74% 6.55%
Net PPE/Sales 32.10% 30.15% 31.94% 31.81% 28.38%
Accounts Payables/Sales 4.67% 4.10% 4.13% 4.54% 6.31%
Accruals/Sales 14.69% 13.98% 16.31% 15.53% 15.50%
 Pepsi
2011 2012 2013 2014 2015
Revenue
-1.52% 1.41% 0.40% -5.44% 4.00%
3.17%
-5.41% 6.51% -1.28% -12.82% 3.00%
-4.11% 9.10% -3.37% -16.29% 2.00% 1.41%
-2.77% 10.15% -1.28% -13.92% 1.00%
0.00%
2011 2012
10.43% 9.64% 9.86% 11.00% 9.82% -1.00%
14.48% 13.91% 14.61% 14.37% 13.25% -2.00% -1.52%
9.56% 9.18% 9.64% 9.48% 8.74% -3.00% -2.42%
$ 60,933.00 $ 62,364.00 $ 64,945.00 $ 57,493.00 $ 56,160.00 -4.00%
1.09 1.05 1.02 1.16 1.12 -5.00%
3.38 3.42 3.58 3.87 3.86 -6.00%
11.61 1.78 -4.20 -11.39 -23.43
20.72 19.68 18.48 16.97 15.53
37.42 33.30 33.49 31.40 31.38 Invested
46.53 51.21 56.16 59.76 70.34 5.00
4.50
4.00
3.50
71.75% 70.13% 68.66% 75.27% 82.89% 2.96 2.80
3.00 2.7
36.73% 38.00% 38.25% 40.98% 47.78% 2.50 2.32 2.42
1.30 1.27 1.22 1.66 2.79 2.00
2.96 2.80 2.67 3.30 4.71 1.50
1.00
0.50
0.00
3 yr Avg 5 yr Avg 2011 2012 2

20.88% 21.38%
19.40% 20.66% Opert
9.67% 9.90% 25.00%
21.82% 22.45% 21.
6.76% 6.75%
30.71% 30.88% 20.00%
4.99% 4.75%
15.00% 14.48% 13.91%
15.78% 15.20%

10.00%

5.00%

0.00%
2011 2012

Cash Co
30.00
24
22.95
19.05
20.00
11.61
10.00
1.78
 Cash Co
30.00
24
22.95
19.05
20.00
11.61
10.00
1.78
0.00
2011 2012
-10.00

-20.00

-30.00

Days R
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
2011 2012 210
 Revenue Growth Analysis ROIC
4.00% 12.00%
3.17%
3.00%
10.00%
2.00% 1.41%
1.00% 0.40% 8.00%
Coke
0.00%
2011 2012 2103 2014 Peps i
-1.00% 6.00%

-2.00% -1.52% -1.83% 4.00%

-3.00% -2.42%
-4.00% 2.00%
-3.70%
-5.00%
0.00%
-6.00% -5.44% 2011 2012 2103 2014

Invested Capital/Equity Capital Turnover

5.00 4.71 1.40
4.50 1.16
1.20 1.09
4.00 1.05 1.02
3.50 3.30 1.00
2.96 3.09
2.80 Coke
3.00 2.722.67 0.80
2.32 2.42 Peps i 0.66
2.50 0.63 0.58
0.60 0.56
2.00
1.50 0.40
1.00
0.20
0.50
0.00 0.00
2011 2012 2103 2014 2015 2011 2012 2103 2014

Opertaing Margins Days Inventory

25.00% 30.00
21.82% 22.45% 21.83% 21.11% 25.18
19.70% 23.92 24.47 24.26
20.00% 25.00
20.72
19.68
14.48% 14.61% 20.00 18.48
15.00% 13.91% 14.37% Coke 16.97
13.25%
Peps i
15.00
10.00%
10.00

5.00%
5.00

0.00% 0.00
2011 2012 2103 2014 2015 2011 2012 2103 2014

Cash Conversion Cycle Days Payable

30.00 80.00
24.84
22.95
19.05 70.00
20.00 17.18
59.76 5
11.61 60.00 56.16
51.21
10.00 Coke 46.53
50.00
1.78 42.92 42.04
Peps i
 Cash Conversion Cycle Days Payable
30.00 80.00
24.84
22.95
19.05 70.00
20.00 17.18
59.76 5
11.61 60.00 56.16
51.21
10.00 Coke 46.53
50.00
1.78 42.92 42.04
Peps i 37.78
40.00 37.20
0.00
2011 2012 2103 2014 2015
-1.94 30.00
-4.20
-10.00
-11.39 20.00
-20.00 10.00
-23.43 0.00
-30.00 2011 2012 2103 2014

Days Recievables
40.00
35.00
30.00
25.00 Coke
Peps i
20.00
15.00
10.00
5.00
0.00
2011 2012 2103 2014 2015
 ROIC

Coke
Peps i

2012 2103 2014 2015

Capital Turnover

1.16 1.12
1.05 1.02

Coke
Peps i
63 0.58 0.56 0.56

2012 2103 2014 2015

Days Inventory

4.47 25.18 24.26 23.59

19.68
18.48
16.97 Coke
15.53 Peps i

2012 2103 2014 2015

Days Payable

70.34

59.76 57.56
56.16
51.21
Coke
42.04
Peps i
 Days Payable

70.34

59.76 57.56
56.16
51.21
Coke
42.04
7.20 37.78 Peps i

2012 2103 2014 2015

Steps in the WACC Valuation Methodology
Determing the explicit forecast period
forecast growth during explicit forecast period and long run growth
forecast free cash flows to the firm from period 1 to n+1
estimate the weighted average cost of capital
estimate the terminal value of the firm-value of free cash flows from n+1 to infinity
value operating assets(value of operations)
enterprise value=value of operating assets+value of non operating assets
estimate market value of equity=enterprise value-marketvalue of debt-market value of preferred
estimated price per share=estimated market value of equity/number of shares outstanding
10
Coco Cola Balance Sheet
Year 2011 2012 2013
Assets
Current assets
Surplus Cash(Plug Item)
Cash and cash equivalents $ 12,803 $ 8,442 $ 10,414
Short-term investments $ 1,232 $ 8,109 $ 9,854
Total cash $ 14,035 $ 16,551 $ 20,268
Receivables $ 4,920 $ 4,759 $ 4,873
Inventories $ 3,092 $ 3,264 $ 3,277
Prepaid expenses $ 3,450 $ 2,781 $ 2,886
Other current assets $ 2,973
Total current assets $ 25,497 $ 30,328 $ 31,304
Non-current assets
Property, plant and equipment
Gross property, plant and equipment $ 23,151 $ 23,486 $ 25,032
Accumulated Depreciation $ (8,212) $ (9,010) $ (10,065)
Net property, plant and equipment $ 14,939 $ 14,476 $ 14,967
Equity and other investments $ 8,374 $ 10,448 $ 11,512
Goodwill & Other Intangibles $ 31,164 $ 30,922 $ 32,272
Total non-current assets $ 54,477 $ 55,846 $ 58,751
Total assets $ 79,974 $ 86,174 $ 90,055

Liabilities and stockholders' equity

Liabilities
Current liabilities
Short-term debt $ 14,912 $ 17,874 $ 17,925
Accounts payable $ 2,172 $ 1,969 $ 1,933
Taxes payable $ 362 $ 471 $ 309
Accrued liabilities $ 6,837 $ 6,711 $ 7,644
Other current liabilities $ 796
Total current liabilities $ 24,283 $ 27,821 $ 27,811
Non-current liabilities
Long-term debt(Plug item) $ 13,656 $ 14,736 $ 19,154
Deferred taxes liabilities $ 4,694 $ 4,981 $ 6,152
Minority interest $ 286 $ 378 $ 267
Other long-term liabilities $ 5,420 $ 5,468 $ 3,498
Total non-current liabilities $ 24,056 $ 25,563 $ 29,071
Total liabilities $ 48,339 $ 53,384 $ 56,882
Stockholders' equity
Common Stock $ (21,915) $ (25,255) $ (28,487)
Retained earnings $ 53,550 $ 58,045 $ 61,660
Total Shareholder Equity $ 31,635 $ 32,790 $ 33,173
Total liabilities and stockholders' equity $ 79,974 $ 86,174 $ 90,055
 Projected Balance Sheet
2014 2015 2016 2017 2018 2019 2020

$ 1,425.14 $ 3,663.96 $ 6,183.60 $ 9,010.58 $ 12,173.84

$ 8,958 $ 7,309 $ 7,966.28 $ 8,683.24 $ 9,464.73 $ 10,316.56 $ 11,245.05
$ 12,717 $ 12,591 $ 12,591 $ 12,591 $ 12,591 $ 12,591 $ 12,591
$ 21,675 $ 19,900 $ 20,265 $ 20,649 $ 21,052 $ 21,475 $ 21,919
$ 4,466 $ 3,941 $ 4,296.96 $ 4,683.69 $ 5,105.22 $ 5,564.69 $ 6,065.51
$ 3,100 $ 2,902 $ 3,162.37 $ 3,446.98 $ 3,757.21 $ 4,095.36 $ 4,463.94
$ 3,066 $ 2,752 $ 2,752 $ 2,752 $ 2,752 $ 2,752 $ 2,752
$ 679 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900
$ 32,986 $ 33,395 $ 36,083 $ 39,556 $ 43,271 $ 47,239 $ 51,475

$ 25,258 $ 22,354 $ 22,354.00 $ 22,354.00 $ 22,354.00 $ 22,354.00 $ 22,354.00

$ (10,625) $ (9,783) $ (9,783) $ (9,783) $ (9,783) $ (9,783) $ (9,783)
$ 14,633 $ 12,571 $ 13,702 $ 14,935 $ 16,279 $ 17,744 $ 19,341
$ 13,625 $ 15,788 $ 15,788 $ 15,788 $ 15,788 $ 15,788 $ 15,788
$ 30,779 $ 28,339 $ 28,339 $ 28,339 $ 28,339 $ 28,339 $ 28,339
$ 59,037 $ 56,698 $ 57,326 $ 57,986 $ 58,679 $ 59,407 $ 60,171
$ 92,023 $ 90,093 $ 93,409 $ 97,542 $ 101,950 $ 106,646 $ 111,646

$ 22,682 $ 15,806 $ 15,806 $ 15,806 $ 15,806 $ 15,806 $ 15,806

$ 2,089 $ 2,795 $ 2,293.32 $ 2,499.72 $ 2,724.70 $ 2,969.92 $ 3,237.21
$ 400 $ 331 $ 331 $ 331 $ 331 $ 331 $ 331
$ 7,145 $ 6,865 $ 7,618.66 $ 8,304.34 $ 9,051.73 $ 9,866.38 $ 10,754.36
$ 58 $ 1,133 $ 1,133 $ 1,133 $ 1,133 $ 1,133 $ 1,133
$ 32,374 $ 26,930 $ 26,818 $ 27,296 $ 27,797 $ 28,323 $ 28,876

$ 19,063 $ 28,407 $ 28,407 $ 28,407 $ 28,407 $ 28,407 $ 28,407

$ 5,636 $ 4,691 $ 4,691 $ 4,691 $ 4,691 $ 4,691 $ 4,691
$ 241 $ 210 $ 210 $ 210 $ 210 $ 210 $ 210
$ 4,389 $ 4,301 $ 4,301 $ 4,301 $ 4,301 $ 4,301 $ 4,301
$ 29,329 $ 37,609 $ 37,609 $ 37,609 $ 37,609 $ 37,609 $ 37,609
$ 61,703 $ 64,539 $ 64,427 $ 64,905 $ 65,406 $ 65,932 $ 66,485

$ (33,088) $ (39,464) $ (39,464) $ (39,464) $ (39,464) $ (39,464) $ (39,464)

$ 63,408 $ 65,018 $ 68,596 $ 72,564 $ 76,969 $ 81,850 $ 87,253
$ 30,320 $ 25,554 $ 28,982 $ 32,638 $ 36,544 $ 40,713 $ 45,161
$ 92,023 $ 90,093 $ 93,409 $ 97,542 $ 101,950 $ 106,646 $ 111,646
 Proj Assets $ 92,498 $ 96,544 $ 101,640 $ 107,275 $ 113,497
Proj Liab $ 93,923 $ 98,783 $ 104,160 $ 110,102 $ 116,660

2015 2016 2017 2018 2019 2020

AFN $ (1,425) $ (2,239) $ (2,520) $ (2,827) $ (3,163)
Debt/Asset 47.33% 45.33% 43.37% 41.46% 39.60%
TIE 5.62 5.90 6.20 6.51 6.83
EBIT(1-T) $ 6,813 $ 7,426 $ 8,094 $ 8,823 $ 9,617
NWC $ 7,244 $ 8,266 $ 8,762 $ 9,303 $ 9,892 $ 10,535
Delta NWC $ 1,022 $ 496 $ 541 $ 590 $ 643
Inv in NFA $ 1,131 $ 1,233 $ 1,344 $ 1,465 $ 1,597
Free Cash Flow to
Firm $ 4,660 $ 5,697 $ 6,209 $ 6,768 $ 7,377
Free Cash Flow to
Equity $ 3,493 $ 4,529 $ 5,042 $ 5,601 $ 6,210
FCF-E-Dividends $ 1,108 $ 1,884 $ 2,106 $ 2,346 $ 2,608

DCF Valuation Model using the WACC Methodology

2015 2016 2017 2018 2019 2020
FCF-Firm $ 4,831 $ 5,802 $ 6,237 $ 6,704 $ 7,207
Terminal Value
Net FCFs $ 4,831 $ 5,802 $ 6,237 $ 6,704 $ 7,207

Value of Operations $216,154.81

Enterprise Value $228,746
Equity Value $182,726
Estimated P/Share $41.48
Projected Balance Sheet
2021 2022 2023 2024 2025

$ 15,704.95 $ 19,638.32 $ 24,011.51 $ 28,865.45 $ 34,909.63 $ 34,909.63

$ 12,257.10 $ 13,360.24 $ 14,562.66 $ 15,873.30 $ 17,301.90 $ 16,192.80
$ 12,591 $ 12,591 $ 12,591 $ 12,591 $ 12,591
$ 22,385 $ 22,875 $ 23,389 $ 23,929 $ 24,496
$ 6,611.41 $ 7,206.43 $ 7,855.01 $ 8,561.96 $ 9,332.54 $ 8,734.30
$ 4,865.70 $ 5,303.61 $ 5,780.94 $ 6,301.22 $ 6,868.33 $ 6,428.05
$ 2,752 $ 2,752 $ 2,752 $ 2,752 $ 2,752 $ 2,752
$ 3,900 $ 3,900 $ 3,900 $ 3,900 $ 3,900
$ 55,993 $ 60,809 $ 65,938 $ 71,397 $ 77,205

$ 22,354.00 $ 22,354.00 $ 22,354.00 $ 22,354.00 $ 22,354.00

$ (9,783) $ (9,783) $ (9,783) $ (9,783) $ (9,783)
$ 21,082 $ 22,980 $ 25,048 $ 27,302 $ 29,759 $ 27,852
$ 15,788 $ 15,788 $ 15,788 $ 15,788 $ 15,788
$ 28,339 $ 28,339 $ 28,339 $ 28,339 $ 28,339
$ 60,973 $ 61,815 $ 62,700 $ 63,628 $ 64,603
$ 116,966 $ 122,624 $ 128,637 $ 135,025 $ 141,808

$ 15,806 $ 15,806 $ 15,806 $ 15,806 $ 15,806

$ 3,528.56 $ 3,846.13 $ 4,192.28 $ 4,569.59 $ 4,980.85 $ 4,661.56
$ 331 $ 331 $ 331 $ 331 $ 331
$ 11,722.25 $ 12,777.25 $ 13,927.20 $ 15,180.65 $ 16,546.91 $ 15,486.21
$ 1,133 $ 1,133 $ 1,133 $ 1,133 $ 1,133
$ 29,456 $ 30,066 $ 30,705 $ 31,377 $ 32,082

$ 28,407 $ 28,407 $ 28,407 $ 28,407 $ 28,407

$ 4,691 $ 4,691 $ 4,691 $ 4,691 $ 4,691
$ 210 $ 210 $ 210 $ 210 $ 210
$ 4,301 $ 4,301 $ 4,301 $ 4,301 $ 4,301
$ 37,609 $ 37,609 $ 37,609 $ 37,609 $ 37,609
$ 67,065 $ 67,675 $ 68,314 $ 68,986 $ 69,691

$ (39,464) $ (39,464) $ (39,464) $ (39,464) $ (39,464)

$ 93,226 $ 99,820 $ 107,093 $ 115,109 $ 111,580
$ 49,901 $ 54,949 $ 60,323 $ 66,039 $ 72,116
$ 116,966 $ 122,624 $ 128,637 $ 135,025 $ 141,808
 $ 120,360 $ 127,925 $ 136,255 $ 145,420 $ 137,098
$ 123,891 $ 131,858 $ 140,628 $ 150,274 $ 141,808

2021 2022 2023 2024 2025

$ (3,531) $ (3,933) $ (4,373) $ (4,854) $ (4,710)
37.80% 36.06% 34.37% 32.74% 31.18%
7.18 7.53 7.91 8.31 8.72
$ 10,482 $ 11,426 $ 12,454 $ 13,575 $ 14,797 $ 13,848
$ 11,235 $ 11,999 $ 12,831 $ 13,738 $ 14,727 $ 13,959
$ 700 $ 764 $ 832 $ 907 $ 989 $ 782
$ 1,741 $ 1,897 $ 2,068 $ 2,254 $ 2,457 $ 1,943

$ 8,041 $ 8,765 $ 9,554 $ 10,413 $ 11,351 $ 11,123

$ 6,874 $ 7,598 $ 8,386 $ 9,246 $ 10,183

$ 2,892 $ 3,201 $ 3,537 $ 3,903 $ 4,300

WACC Methodology
2021 2022 2023 2024 2025 2026
$ 7,748 $ 8,329 $ 8,954 $ 9,625 $ 10,347 $ 11,123
$ 310,370
$ 7,748 $ 8,329 $ 8,954 $ 9,625 $ 320,717
Coco Cola Income statement Historical Income Statement
Fiscal year ends in December. USD in millions except per share data. 2011 2012
Revenue $ 46,542 $ 48,017
Cost of revenue $ 18,216 $ 19,053
Gross profit $ 28,326 $ 28,964
Operating expenses
Sales, General and administrative $ 17,440 $ 17,738
Other operating expenses $ 732 $ 447
Total operating expenses $ 18,172 $ 18,185
Operating income $ 10,154 $ 10,779
Interest Expense $ 417 $ 397
Other income (expense) $ 1,702 $ 1,427
Income before taxes $ 11,439 $ 11,809
Provision for income taxes $ 2,805 $ 2,723
Net income from continuing operations $ 8,634 $ 9,086
Other $ (62) $ (67)
Net income $ 8,572 $ 9,019
Dividends
Addition to Retained Earnings

Weighted average shares outstanding

Basic 4568 4504
Diluted 4646 4584
EBITDA $ 13,810 $ 14,188
EPS $ 1.85 $ 1.97
Historical Income Statement Projected Income Sta
2013 2014 2015 2016 2017 2018 2019
$ 46,854 $ 45,998 $ 44,294 $ 48,280 $ 52,626 $ 57,362 $ 62,525
$ 18,421 $ 17,889 $ 17,482
$ 28,433 $ 28,109 $ 26,812

$ 17,310 $ 17,218 $ 10,237

$ 895 $ 1,183 $ 7,847
$ 18,205 $ 18,401 $ 18,084
$ 10,228 $ 9,708 $ 8,728 $ 10,322 $ 11,251 $ 12,264 $ 13,368
$ 463 $ 483 $ 856 $ 1,769 $ 1,769 $ 1,769 $ 1,769
$ 1,712 $ 100 $ 1,733 $ 504 $ 561 $ 650 $ 751
$ 11,477 $ 9,325 $ 9,605 $ 9,057 $ 10,044 $ 11,146 $ 12,350
$ 2,851 $ 2,201 $ 2,239 $ 3,080 $ 3,415 $ 3,790 $ 4,199
$ 8,626 $ 7,124 $ 7,366 $ 5,978 $ 6,629 $ 7,356 $ 8,151
$ (42) $ (26) $ (15) $ (15) $ (15) $ (15) $ (15)
$ 8,584 $ 7,098 $ 7,351 $ 5,963 $ 6,614 $ 7,341 $ 8,136
$ 2,385 $ 2,645 $ 2,936 $ 3,254
$ 3,578 $ 3,968 $ 4,405 $ 4,882

4434 4387 4352

4509 4450 4405
$ 13,917 $ 11,784 $ 12,431
$ 1.90 $ 1.60 $ 1.67
Projected Income Statement
2020 2021 2022 2023 2024 2025
$ 68,152 $ 74,285 $ 80,971 $ 88,259 $ 96,202 $ 104,860 $ 98,138

$ 14,571 $ 15,882 $ 17,312 $ 18,870 $ 20,568 $ 22,419 $ 20,982

$ 1,769 $ 1,769 $ 1,769 $ 1,769 $ 1,769 $ 1,769
$ 864 $ 991 $ 1,132 $ 1,289 $ 1,464 $ 1,658
$ 13,666 $ 15,104 $ 16,675 $ 18,390 $ 20,264 $ 22,309
$ 4,647 $ 5,135 $ 5,669 $ 6,253 $ 6,890 $ 7,585
$ 9,020 $ 9,969 $ 11,005 $ 12,138 $ 13,374 $ 14,724
$ (15) $ (15) $ (15) $ (15) $ (15) $ (15)
$ 9,005 $ 9,954 $ 10,990 $ 12,123 $ 13,359 $ 14,709
$ 3,602 $ 3,982 $ 4,396 $ 4,849 $ 5,344 $ 5,884
$ 5,403 $ 5,972 $ 6,594 $ 7,274 $ 8,015 $ 6,077
Pepsi Balance Sheet
Year 2011 2012 2013 2014
Assets
Current assets
Cash
Cash and cash equivalents $ 4,067$ 6,297 $ 9,375 $ 6,134
Short-term investments $ 358$ 322 $ 303 $ 2,592
Total cash $ 4,425$ 6,619 $ 9,678 $ 8,726
Receivables $ 6,912$ 6,058 $ 6,178 $ 5,817
Inventories $ 3,827$ 3,581 $ 3,409 $ 3,143
Prepaid expenses $ 2,277$ 1,479 $ 2,162 $ 2,143
Other current assets $ 983 $ 776 $ 834
Total current assets $ 17,441 $ 18,720 $ 22,203 $ 20,663
Non-current assets
Property, plant and equipment
Gross property, plant and equipment $ 35,140 $ 36,162 $ 36,961 $ 36,300
Accumulated Depreciation $ (15,442) $ (17,026) $ (18,386) $ (19,056)
Net property, plant and equipment $ 19,698 $ 19,136 $ 18,575 $ 17,244
Goodwill +Intangibles $ 34,722 $ 35,909 $ 35,962 $ 31,883
Other long-term assets $ 1,021 $ 873 $ 738 $ 719
Total non-current assets $ 55,441 $ 55,918 $ 55,275 $ 49,846
Total assets $ 72,882 $ 74,638 $ 77,478 $ 70,509

Liabilities and stockholders' equity

Liabilities
Current liabilities
Short-term debt $ 6,205 $ 4,815 $ 5,306 $ 5,076
Accounts payable $ 4,083 $ 4,451 $ 4,874 $ 5,127
Taxes payable $ 192 $ 371
Accrued liabilities $ 3,686 $ 3,892 $ 4,034 $ 3,968
Other current liabilities $ 3,988 $ 3,560 $ 3,625 $ 3,921
Total current liabilities $ 18,154 $ 17,089 $ 17,839 $ 18,092
Non-current liabilities
Long-term debt $ 20,568 $ 23,544 $ 24,333 $ 23,821
Deferred taxes liabilities $ 4,995 $ 5,063 $ 5,986 $ 5,304
Minority interest $ 311 $ 105 $ 110 $ 110
Other long-term liabilities $ 8,266 $ 6,543 $ 4,931 $ 5,744
Total non-current liabilities $ 34,140 $ 35,255 $ 35,360 $ 34,979
Total liabilities $ 52,294 $ 52,344 $ 53,199 $ 53,071
Stockholders' equity
Preferred stock $ 41 $ 41 $ 41 $ 41
Common stock $ (19,769) $ (20,905) $ (22,182) $ (31,695)
Retained earnings $ 40,316 $ 43,158 $ 46,420 $ 49,092
Total stockholders' equity $ 20,588 $ 22,294 $ 24,279 $ 17,438
Total liabilities and stockholders' equity $ 72,882 $ 74,638 $ 77,478 $ 70,509
 2015

$ 9,096
$ 2,913
$ 12,009
$ 5,497
$ 2,720
$ 1,865
$ 940
$ 23,031

$ 35,747
$ (19,430)
$ 16,317
$ 29,629
$ 690
$ 46,636
$ 69,667

$ 4,071
$ 5,546

$ 4,078
$ 3,883
$ 17,578

$ 29,213
$ 4,959
$ 107
$ 5,887
$ 40,166
$ 57,744

$ 41
$ (38,590)
$ 50,472
$ 11,923
$ 69,667
Pepsi Income Statement
Year 2011 2012 2013 2014
Revenue $ 66,504 $ 65,492 $ 66,415 $ 66,683
Cost of revenue $ 31,593 $ 31,291 $ 31,243 $ 30,884
Gross profit $ 34,911 $ 34,201 $ 35,172 $ 35,799
Operating expenses
Sales, General and administrative $ 25,145 $ 24,970 $ 25,357 $ 26,126
Other operating expenses $ 133 $ 119 $ 110 $ 92
Total operating expenses $ 25,278 $ 25,089 $ 25,467 $ 26,218
Operating income $ 9,633 $ 9,112 $ 9,705 $ 9,581
Interest Expense $ 856 $ 899 $ 911 $ 909
Other income (expense) $ 57 $ 91 $ 97 $ 85
Income before taxes $ 8,834 $ 8,304 $ 8,891 $ 8,757
Provision for income taxes $ 2,372 $ 2,090 $ 2,104 $ 2,199
Net income from continuing operations $ 6,462 $ 6,214 $ 6,787 $ 6,558
Other $ (19) $ (36) $ (47) $ (45)
Net income $ 6,443 $ 6,178 $ 6,740 $ 6,513
Preferred dividend $ 1 $ 1 $ 1 $ 1
Net income available to common shareholders $ 6,442 $ 6,177 $ 6,739 $ 6,512
Weighted average shares outstanding
Basic 1576 1557 1541 1509
Diluted 1597 1575 1560 1527
EPS $ 1.46 $ 1.40 $ 1.53 $ 1.48
 2015
$ 63,056
$ 28,384
$ 34,672

$ 24,885
$ 1,434
$ 26,319
$ 8,353
$ 970
$ 59
$ 7,442
$ 1,941
$ 5,501
$ (49)
$ 5,452

$ 5,452

1469
1485
$ 1.24
C

Metric Coke Pepsi Mondelez Dr Pepper Ind Avg

P/S 4.4 2.6 2.48 2.82 2.63
P/B 7.1 12.8 11.4 8.36 10.85
P/E 25 30.7 22.3 22.2 25.07
EV/Revenue 4.91 2.87 3.06 3.25 3.06
EV/EBITDA 17.7 14.75 19.32 12.82 15.63

Coke Most Recent Meterics

Sales/Share $ 10.06
Book Value/Share $ 20.45
Earnings per Share $ 1.67
Revenue $ 44,294
EBITDA $ 12,431
Estimating of Price per Share of Coke using Comparables Methodology

Metrics Low Value Average High

Price/Sales $ 24.94 $ 26.48 $ 28.36
P/E $ 37.05 $ 41.83 $ 51.23
EV/EBITDA $ 25.73 $ 33.66 $ 44.07
Average Comparables $ 29.24 $ 33.99 $ 41.22