Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • November 2012
  • Exercise

Coca-Cola: Residual Income Valuation Exercise

By: Suraj Srinivasan
  • Format:Print
  • | Language:English
  • | Pages:4
ShareBar

Abstract

The exercise illustrates the use of the residual income (also known as the abnormal earnings) valuation approach. Students are asked to provide a valuation of Coca-Cola Company using the residual income valuation methodology and understand how it maps into the discounted cash flow method. Students learn how forecasts of sales, performance, dividends, and other valuation inputs feeds into a valuation model. Students also learn the modified Dupont decomposition technique and how to reclassify financial statements to perform the modified Dupont analysis.

Keywords

Business Analysis; Valuation; Residual Income Valuation; Accounting; Financial Accounting; Financial Analysis; Financial Statement Analysis; Financial Statements; Discounted Cash Flows

Citation

Srinivasan, Suraj, Beiting Cheng, and Edward J. Riedl. "Coca-Cola: Residual Income Valuation Exercise." Harvard Business School Exercise 113-056, November 2012.
  • Purchase

About The Author

Suraj Srinivasan

Accounting and Management
→More Publications

More from the Author

    • April 2023
    • Faculty Research

    Strive Asset Management

    By: Suraj Srinivasan, Lynn S. Paine and Aldo Sesia
    • March 2023
    • Faculty Research

    A Primer on OKRs

    By: Suraj Srinivasan and Li-Kuan (Jason) Ni
    • March 2023
    • Faculty Research

    Hikma Pharmaceuticals Governance Journey

    By: Suraj Srinivasan and Jonah Goldberg
More from the Author
  • Strive Asset Management By: Suraj Srinivasan, Lynn S. Paine and Aldo Sesia
  • A Primer on OKRs By: Suraj Srinivasan and Li-Kuan (Jason) Ni
  • Hikma Pharmaceuticals Governance Journey By: Suraj Srinivasan and Jonah Goldberg
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College