Soda Pop Organics, Research Paper Example

Section I

The final project entailed the analysis and interpretation of the financial statements for Soda Pop Organics, Inc.  The corporation´s financial and strategic information was derived from the Power Point Presentation and the Excel spreadsheets.  In addition, the potential for future expansion will be explored.  The potential for future expansion will be examined.  Furthermore, the report will examine the Soda Pop Organics, Inc. shareholder equity, assets revenues and liabilities.  In Section V, the profitability ratios, financial leverage proportions and liquidity proportions will be reviewed.  In the final section, the observations from the aforementioned calculations will be examined.  The financial proportions will be detailed by means of pertinence, and interpretation.  In addition, the methods applied by the financial strategy in order to motivate future expansions will be reviewed.  Finally, recommendations will be made with regards to Soda Pop Organics, Inc. for its continued viability.  The information which would motivate or hinder investment from outside origins will be examined.

Section II

Company Profile

Soda Pop Organics, Inc. is a beverage concern conceived in 2001.  The corporate headquarters of Soda Pop Organization are in Washougal, WA. Soda Pop Organics, Inc. has over 120,000 staff members. In addition, Soda Pop Organics, Inc. has interests in over 1550 organic and hydroponic farms which have been under regional proprietorship.  Furthermore, the Soda Pop Organics, Inc. organization has interests in more than 130 sugar cane agricultural establishments which have been solely dedicated to the cultivation of organics sugar cane derivatives.

Organizational Mission

Soda Pop Organics, Inc. is dedicated to presenting natural, healthful beverage products derived from sustainable agricultural activities.  In addition, Soda Pop Organics, Inc. only uses the best ingredients in the production of its products.  Soda Pop Organics, Inc. endeavors to maintain this level of dedication with small agricultural concerns which have been maintained globally.  Soda Pop Organics, Inc.  has strived to invest on farms which were self-sustaining.  The management of Soda Pop Organics, Inc. perceives great importance in the formation of relationship with the regional agricultural producers, investment concerns and community administrators.  The mission which has been endeavored by Soda Pop Organics, Inc. exceeds revenues and sales.  The Soda Pop Organics, Inc. organization is dedicated to assertively influencing the regional employment markets and surroundings.

Product Lines

The product lines that were presented to the public by Soda Pop Organics, Inc. were composed of three categories.  These categories were soft drink products, flavored water products and organic tea beverages.  The organics tea beverage products which were presented to the market are: Organic Green Tea with Cinnamon, Organic White Tea with Orange flavoring, and Organic Oolong Tea with Honeysuckle.  In addition, the Organics Lavender Bloom Tea and Organics Black Tea were offered.  The products which compose the flavored water division are: Organic Sweet Flower flavored water, Vitamin Organics supplemented Water, Organic Sleep Time Water, Organic Energy Produced water and Organic Weight Management water.  The soft drink products which were offered by Soda Pop Organics, Inc. were Organic Soda beverage, Organics Tea Infused beverages, Herb and Floral Organic Beverages and Organic fruit beverages.

Section III

It is anticipated that within the next ten years, Soda Pop Organics, Inc. will have supplied, invested and created a brand in all of the primary global markets. A substantial amount of resources has been dedicated to the production of the access and bottling healthful beverages. Soda Pop Organics, Inc. has dedicated itself to the creation of more than 25 packaging and distribution depots globally. It is anticipated that over the next ten years, Soda Head Organics, Inc. has the objective of developing more than 150 agricultural concerns internationally dedicated to the cultivation of sugar cane, organics teas and organic fruits.  This dedication has been the causal attribute of Soda Pop Organics, Inc. commitment of investing more than $1. 5 million annually during the next twelve years.

Section IV

Soda Pop Organics, Inc. derives its net operating income of $43.864 billion dollars from the marketing of its products.  The gross profits which were realized by Soda Pop Organics, Inc. were $26.643 billion. The operating revenues realized by the Soda Pop Organics, Inc. organization were $9.423 billion.  The revenues prior to taxation is $10.464 billion.  The consolidated net revenues for Soda Pop Organics, Inc. were $7.810 billion. There were 3986 outstanding shares for Soda Pop Organics, Inc. during the 2013 fiscal year.  The net revenues provided by the shareholders´ activities were $7.776 billion.  The fundamental net revenue per share realized was $1.98.  The diluted net revenue per share was $1.95.  The average shares outstanding prior to the application of the dilutive shares was 3924.

The market prices for the Soda Pop Organics, Inc. stock had fluctuated during 2013. The stock price for the first quarter was evaluated at $38.95. The stock price for the second quarter of 2013 was measured at $41.92.  The stock price for the third quarter of 2013 had been assessed at $39.25.  The stock price for the fourth quarter of 2013 had been observed at $39.62. The seasonal fluctuations in the stock price can be attributed to the increased consumption of the Soda Pop Organics, Inc. products during the warmer summer months.  The value of the equity in Soda Pop Organics, Inc. financial statement for 2013 had been valued at $2.5 billion.  The assets in Soda Pop Organics, Inc. were valued at slightly less than $2 billion.  In 2014, the valuation of the assets for Soda Pop Organics, Inc. had been valued at $2.5 billion.

The equity demonstrated for Soda Pop Organics, Inc. had been observed at $2. 5 billion.  The equity that was observed for Soda Pop Organics, Inc. was measured at over $3.0 billion.  During the fiscal years of 2013 and 2014, the projected assets held by Soda Pop Organics, Inc. had been assessed at over $3.0 billion. The anticipated equity of Soda Pop Organics, Inc. for 2015 is $3.5 billion.  The assets and the equity are expected to reach parity during the fiscal year 2016.  The estimated assets and equity are estimated at $3. 5 billion for 2016.  Consequently, the assets and the equity for 2017 have been estimated at $4.25 billion for the assets and equity, respectively.

Section V

Liquidity Ratios

The liquidity ratios were assessed for Soda Pop Organics, Inc. fiscal year 2013. The current ratio was the first ratio calculated. The formula that is applied in order to tabulate the current ratio is the following:

$1.9 billion/ $2.4 billion = 0.791667

The quick ratio is tabulated by adding the cash equivalents, accounts receivables and short term investments.  Consequently, $43.854 billion/ $37.514 billion = 1.1690035.  The quick ratio was evaluated for Soda Pop Organics, Inc. for 2013 at 1.1600035.  The cash ratio is similar to the quick ratio with the exception of considering invested funds.  The invested funds for Soda Pop Organics, Inc. for the 2013 fiscal year totaled to $4.0 million annually.  Consequently, this is added to the total assets which makes the total $43.858 billion.  The cash ratio is the total assets and investments divided by the current liabilities.  The following formula is derived:

$43.858 Billion/ $37.514 billion

The cash ratio for Soda Pop Organics, Inc. for 2013 is 1. 1691101.

Profitability Ratios

In order to determine the profitability ratio, gross profit is divided by the net sales.

$26.843 billion/ $43.854 billion = 0.6120992 = GPM

The return on assets is calculated by taking the net income and dividing it by the mean total assets.  Return on assets is $7.810 billion/ $3.08 billion the net return on assets is 253.57142%.  The average assets were tabulated from the years 2013, 2014, 2015, 2016 and 2017.  The return on equity is equal to net income divided by the average shareholder equity:

$10.464 billion/ $7. 776 billion =134.5679%.

Financial Leverage Ratios

The financial leverage ratio of debt is calculated by taking the total assets and dividing it by the total liabilities

$37.514 billion/ $43.854 billion = 85.543%

The debt to equity is calculated by taking the total liabilities and dividing by the shareholder equity.  $37.514 billion/ $7.776 billion.  The D/E ratio is 4.8243312.

Section VI

The current ratio of 0.791667 infers that Soda Pop Organics, Inc. may have difficulty in fulfilling their obligations.  The quick ratio of 1.1130065 implies that for every dollar of debt, the organization has 1.1690035 in liquid assets.  The cash ratio is 1.169101.  This means that for every dollar of debt with regards to short term obligations, the organization as $1.169101 available in liquid funds.  The gross profit margin of 0.6120992 or 61.20992% means that these are the revenues which are remaining after the expenses incurred for the goods sold.  This is the source of future accruals and expenses.  The debt ratio of = 0.85543 or 85.543% is the amount of Soda Pop Organics, Inc. financed by means of debt incurrence.  The debt -to -equity ratio of 4.824 has the inference of every dollar of shareholder equity being used to finance $4.824 of debt.

The financial strategy demonstrated by Soda Pop Organics, Inc. demonstrates that they are using shareholder equity in order to finance liabilities.  The revenues and gross profit margins are sufficient to service the debt.  The challenges to future growth are a high debt ratio.  In the event that the expenses increase, the organization may not have sufficient revenue to service its obligations.

The recommendations that would be made to the management of Soda Pop Organics, Inc. would be to decrease their operating expenses.  This may mean using materials that are recycled in order to package their products.  In addition, it is advisable to diversify into high profit products which would increase the net revenue.  The information that would encourage investment from outside sources would be the elevated profit margin, the cash ratio and the quick ratio.  The information that would discourage future outside investment would be the elevated debt ratio and debt- to equity ratios.