4. Introduction of the organization
Founded in 1886, the Coca-cola company is
the world’s leading manufacturer, marketer,
and distributor of nonalcoholic beverages,
concentrates and syrups.
The company’s corporate headquarters are
in Atlanta, with local operations in over 200
countries around the world.
5. History of the organization
The Coca Cola company is a global company. In Pakistan
the company started it’s business in 1953. Today the
company has a major share in beverage market. The
company has its production units at Karachi, Multan,
Faisalabad, Rahimyar Khan, Gujranwala, & Lahore.
The company provides a fair amount of employment to
local citizens and deeply involved in the life of local
communities in which it operates .
6. Vision mission & values
Vision:
“To become a market leader in ready to drink segment
while adding best-in-class value to all stakeholders”.
Mission:
“ CCBPL exists to refresh the consumers, inspire moment
of optimism through our brands & actions as well as
benefits all stakeholders, which we will do with highest
social responsibility & with uncompromising commitment
towards quality of our products & Integrity in our
operation.”
Integrity in our operation.”
7. Vision mission & values
Values:
We value & respect our people.
We communicate openly.
We have integrity.
We win as a team.
We drive quality & innovation.
We are accountable.
8. Introduction to the topic
In business and accounting/accountancy, perpetual
inventory or continuous inventory describes systems
of inventory where information on inventory quantity
and availability is updated on a continuous basis as a
function of doing business.
A method of accounting for inventory that records the sale
or purchase of inventory in near real-time, through
the use of computerized point-of-sale and enterprise
asset management systems. Perpetual inventory
provides a highly detailed view of changes in
inventory and allows real-time reporting of the
amount of inventory in stock; hence, accurately
reflecting the level of goods on the perpetual
inventory system is intended as an aid to material
control
9. Introduction to the topic
Under the perpetual inventory system, an entity continually
updates its inventory records to account for additions to
and subtractions from inventory for such activities as
received inventory items, goods sold from stock, and items
picked from inventory for use in the production proces.
Perpetual inventory is by far the preferred method for tracking
inventory, since it can yield reasonably accurate results on
an ongoing basis, if properly managed.
Perpetual inventory system comprises of:
(a) Comparison of Bin Cards (quantitative perpetual
inventory) and Stores Ledger Accounts (quantitative-cum-
valued perpetual inventory),(b) Continuous Stock-Taking
(Physical perpetual inventory)
10. Introduction to the topic
Advantages:
1. Greater control over stock
2. Slow-moving and fast-moving lines of inventory
can be identified.
3. Reordering of inventory is more efficient.
4. Interim profit reports can be prepared without
doing a stock take.
5. The level of stock losses or gains can be measured.
11. Introduction to the topic
Disadvantages:
1. Additional record-keeping
Increase workload, increase in staff.
2. Additional costs
Staff costs, costs of computer package to
maintain inventory records.
3. The need for a physical stock take at the end of the
reporting period is not eliminated.
12. First-in-first-out stock valuation
Assumes that the first inventory
purchased is the first inventory sold.
Firms normally try to keep stock moving
in line with purchases dates to prevent
old items from being shop-soiled,
outdated.
13. Practical study in organization
Accounts system in CCBPL
The Coca Cola Beverages Pakistan has a centralized
management structure in the organization. The top most
authority is the COCA COLA Corporate office at Lahore,
where all the heads of respective departments are posted.
Accounts are being headed by the Chief Financial Officer,
who is the in charge off major financial and accounts
matters.
At the territory units the officers in charge of the accounts
and finance departments are called FINANCE LEADER. At
lower level officers are called inventory controllers.
14. Practical study in organization
Inventory Accounting Policy
Inventories consist primarily of raw materials and
packaging (which includes ingredients and supplies)
and finished goods (which include concentrates and
syrups in Coca-Cola Company's concentrate operations,
and finished beverages in finished product operations).
Inventories are valued at the lower of cost or market.
Coca-Cola Company determines cost on the basis of the
average cost or first-in, first-out methods(FIFO).
15. Practical study in organization
The COCA COLA BEVERAGES PAKISTAN is currently
operating and using the FIFO (first in first out) method
for its inventories in the accounts and finance
departments. However the actual information of the
inventories can not be disclosed and provided here as it
is the company’s confidential matter.
First-in-first-out stock valuation
Firms normally try to keep stock moving in Assumes
that the first inventory purchased is the first inventory
sold.
line with purchases dates to prevent old items from
being shop-soiled, outdated.
16. Inventory Disclosure
Coca-Cola Co., Statement of Financial Position, Inventory
USD $ in millions
Dec 31,
2012
Dec 31, 2011 Dec 31,
2010
Dec 31,
2009
Raw
material &
packaging
1,773 1,680 1,425 1,366
Finished
goods
1,171 1,198 1,029 697
others 320 214 196 291
inventories 3,264 3,092 2,650 2,354
17. Item Description The company
Raw materials and
packaging
Carrying amount as of the
balance sheet date of
unprocessed items to be
consumed in the
manufacturing or
production process
Coca-Cola Co.'s raw
materials and packaging
increased from 2010 to 2011
and from 2011 to 2012.
Finished goods Carrying amount as of the
balance sheet date of
merchandise or goods held by
the company that are readily
available for sale.
Coca-Cola Co.'s finished
goods increased from 2010
to 2011 but then slightly
declined from 2011 to 2012.
Inventories Carrying amount (lower of
cost or market) as of the
balance sheet date of
inventories less all valuation
and other allowances.
Coca-Cola Co.'s
inventories increased
from 2010 to 2011 and
from 2011 to 2012.
18. FIFO - Example
Purchases Sales
Date Lot No Qty Unit
cost
Total Date Qty Unit SP
Jan 1 1 50 6.0 300 Jan 4 40 12.0
6 2 50 6.2 310 9 30 12.5
13 3 50 6.5 325 18 20 12.5
24 4 50 6.6 330 31 50 12.9
Total 200 1,265 140
19. FIFO – Example (Cont’d)
Cost of sales Stock on hand
Quantity Unit cost Value Quantity Unit cost Value
50 6.0 300 10 6.5 65
50 6.2 310 50 6.6 330
40 6.5 260 60 395
140 870
21. Strengths
(1) Easy detection of errors.
(2) Better control over stores.
(3) Acts as internal check.
(4) Early detection of loss of stock.
(5) Accurate and up-to-date accounting records.
(6) Availability of correct stock data.
(7) Easy to prepare interim accounts.
(8) Slow-moving and fast-moving lines of inventory
can be identified.
22. Weaknesses
1) Many perpetual inventory systems are expensive.
(2) Companies must find accountants who can work
the system and manage frequent changes to the
general ledger.
(3) Perpetual inventory systems are often time-
consuming.
(4) costs of computer package to maintain inventory
records.
23. Opportunities
. New information technology tools can provide quicker
data sharing between CCBPL various units.
2. More specializedpersonnels can be hired.
3. Data can be accessed from every where of the world
through the technology.
4. Frequent updating of records and data entries can be
established.
24. Threats
1. Risk of human error.
2. Persistent errors can also cause further
complications.
3. Reporting inaccurate inventory figures can trigger
an audit, resulting in potential problems for the
company
25. CONCLUSION
We have discussed our topic THE PERPETUALL
INVENTROY SYSTEM in general and with specific
reference to the COCA COLA COMPANY. I tried to
explain the perpetual inventory system, its nature and
uses in the accounts and finance system of business
and organization. Organizations like THE COCA
COLA COMPANY have large volumes of business and
so they require a system of accounts that can be
accurate and prompt as well as easy to maintain and
manage. However, it is the company’s decision to
adopt a suitable system for accounts and finance
according to its organizational structure.
26. RECOMMENDATIONS
We discussed the perpetual inventory system in the COCA COLA
COMPANY. Here are some recommendations for the
improvement.
1- A detailed and comprehensive data base must be
established.
2- All information should be included in the data base.
3- Competent and qualified personnel should be hired for
the accounts management.
4- New advanced technology should be utilized for the
accounts management.
5- Untrained staff and inventory officers should be provided
with trainings in new approaches of inventory management
and data processing.
6- The organization must provide training opportunities to
its workers and officers to minimize the factor of human
error in data entry in inventories.
27. DATA COLLECTION SOURCES AND
REFERENCE
Web and internet
Wikipedia
Accounting Tools.(website)
Preserve Articles.(website)
The Coca Cola Company, official website
Staff and members of CCBPL, Sialkot & Gujranwala
