exercise 8C Determine the Cash Value of Coca-Cola.edited.docx - Running head EXERCISE 8C DETERMINE THE CASH VALUE OF COCA-COLA EXERCISE 8C DETERMINE THE

Exercise 8C Determine the Cash Value of Coca-Cola.edited.docx

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Running head: EXERCISE 8C: DETERMINE THE CASH VALUE OF COCA-COLA 1 EXERCISE 8C: DETERMINE THE CASH VALUE OF COCA-COLA Student’s Name Institutional Affiliations
EXERCISE 8C: DETERMINE THE CASH VALUE OF COCA-COLA 2 Exercise 8C: Determine the Cash Value of Coca-Cola Step 1: Calculate the financial worth of Coca-Cola based on four approaches: (1) the net worth method, (2) the net income method, (3) the price-earnings ratio method, and (4) the outstanding shares method. Net-worthy method Net-worth is equal to the shareholder's equity, subtract the amount paid as goodwill and total intangibles ( David & David, 2020) . This can be expressed as Net-worthy +Equity from shareholders-(goodwill in \$+ Total intangibles) 1698100- (1026300+7007000) \$ 289,000. This method is beneficial for a company to understand its debt level in comparison to the assets available in the firm. Based on the results from the calculation, the company has more assets than debts. This is because the results are positive. This is a good indicator that Coca Cola is performing well. The higher figure illustrates the company’s potential to balance its debts with