Sample Essay

The Coca Cola Company makes use of debt financing as well as equity based financing for the business. The equity based financing in the company is made by selling the stocks and shares of the company to possible investors who are then provided a share in the profits of the company through dividends. As of march 2009, the common stock based equity for the company stands at $20,712,000. (‘Coca Cola Co’, 2009)

            The company also makes use of debt financing for raising funds. The debt financing is used by the company to maintain a good level of cash flow in the organization and to lower the costs of attaining capital for the business (‘The Coca-Cola Company Business: From the Management’s Discussion and Analysis’). In order to manage debt financing in the organization, Coca Cola Company makes use of prudent strategies that provide interest coverage in order to provide timely repayment of the debt. The company also provides that the use of debt financing enables the organization to increase returns for their shareholders by increasing the overall profit generated from operations.  As of march 2009, the liabilities and debt of the company stands at $22,391,000. (‘Coca Cola Co’, 2009)

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