Examine the liabilities on Coca-Cola's balance sheet.

a. Based on the balance sheet, how much interest-bear ing debt does Coca-Cola have outstanding? (You can assume that other short-term liabilities represent sundry payables and that other long-term liabilities represent health care and pension obligations.)

b. Based on the balance sheet, how much did Coca Cola obtain in equity capital when it originally issued stock to the financial markets?

c. Is there any significance in the fact that retained earnings is much larger than the original paid-in capital?

d. The market value of Coca-Cola's equity is $140 bil lion. What is the book value of equity in Coca Cola? Why is there such a large difference between the market value of equity and the book value of equity?

 

Coca-Cola's balance sheet for December 1998 is summarized below (in millions of dollars) for Problems 1 through 9: $1,648 Accounts Payable 159 Short-term Borrowings Cash and Near Cash Marketable Securities Accounts Receivable Other Current Assets Current Assets 1,666 Other Short-term Liabilities Current Liabilities 2,017 $6,380 Long-term investments Depreciable Fixed Assets Nondepreciable Fixed Assets Accumulated Depreciation Net Fixed Assets Other Assets Total Assets $1,863 5,486 199 2,016 $3,669 7,233 $19,145 Long-term Borrowings Other Long-term Liabilities Noncurrent Liabilities. Share Capital (Paid-in) Retained Earnings Shareholder Equity Total Liabilities & Equity $3,141 4.462 1,037 $8,640 $687 1,415 2,102 3,060 5,343 8.403 $ 19,145