Use of the financial statements to make business decisions Essay

Use of the financial statements to make business decisions - Essay Example When the calculations are done, they indicate that at a price of $40.97, the Coca-Cola Company spent a total of $4,015.06 million to repurchase 98 million of common stock in 2014. On the other hand, at a price of $37.11, the company used a total of $4,490.43 million to purchase 121 million shares in 2012. This indicates that the company spent just $475.37 million to repurchase 23 million more shares in 2012, which means that the extra shares only cost an average of $20.66 per common stock repurchased in 2012. This simply goes to show that the extra shares of common stock that were purchased in 2012 above the 98 million mark were very, compared to the price of the common stock in 2014, since they cost 50% less. Additionally, if the Coca-Cola Company had to repurchase 121 million common stocks in 2014, it would have used a total of $4957.37 compared to $4490.43 that the company used to repurchase 121 million common stick on 2012, which shows that the Coca-Cola Company would have saved a total of $466.94 million, if it would have purchased more common stocks in 2012. Therefore, based on these calculations, it would be much cheaper for Coca-Cola Company to repurchase more common stock when the prices are lower since it would save a lot of money. In this respect, the Coca-Cola Company financial statements can help the management to make a decision on whether to use some more of the company’s profits to repurchase more common stocks, other than waiting until the price of the common stock increases.