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Please answer. Thank you in advance! ATC 9-1 Business Applications Case Analyzing segments at Coca-Cola The following excerpt is from Coca-Cola Company's 2017 annual report
Please answer. Thank you in advance!
ATC 9-1 Business Applications Case Analyzing segments at Coca-Cola The following excerpt is from Coca-Cola Company's 2017 annual report filed with the SEC. Management evaluates the performance of our operating segments separately to individually monitor the different factors affecting financial performance. Our Company manages income taxes from continuing operations and certain treasury-related items, such as interest income and expense, on a global basis within the Corporate operating segment. We evaluate segment performance based on income or loss before income taxes. Selected segment data for Coca-Cola Company for the 2017 and 2016 fiscal years follow. Dollar amounts are in millions. Europe, Middle East, & Africa Latin America North America Asia Pacific 2017 Fiscal Year Net operating revenues $7,322 $3,956 $ 8,651 $4,767 Income before taxes 3,706 2,211 2,307 2,179 Identifiable operating assets 5,475 1,896 17,619 2,072 2016 Fiscal Year Net operating revenues $ 7,041 $3,746 $ 6,437 $4,788 Income before taxes 3,749 1,966 2,560 2,238 Identifiable operating assets 4,067 1,785 16,566 2,024 Required a. Compute the ROI for each of Coke's geographical segments for each fiscal year. Which segment appears to have the best performance during 2017 based their ROIS? Which segment showed the most improvement from 2016 to 2017? b. Assuming Coke's management expects a minimum return of 30 percent, calculate the residual income for each segment for each fiscal year. Which segment appears to have the best performance based on residual income? Which segment showed the most improvement from 2016 to 2017? Page 440 c. Explain why the segment with the highest ROI in 2017 was not the segment with the highest residual income. d. Assume the management of Coke is considering a major expansion effort for the next five years. On which geographic segment would you recommend Coke focus its expansion efforts? Explain the rationale for yourStep by Step Solution
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