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Kristal Kola was established in 05.09.1996, based in Istanbul. Last updated data shows us that Kristal Kola has 29 million $ total assets, 24 million $ of capital. General indicators points that company is not doing very well, even it has altered to maturity (nearly 10 years passed from its establishment) . At point 30.09.2004 company declared nearly 1.5 million $ of loss. Ratio of this loss to shareholders equity (36 mil $) is not optimist (% 4.1) , though. As a general view, we can easily say that the company is not doing very well. At this age of maturity, company is still experiencing sale and profitability problems. Kristal Kola has been advertising for years, and Turkish people know its products. There is no problem such popularity. Everybody know Kristal Kola, but they don’t buy company’s products. Lets look at other specific indicators about this profitability problem.
Net period profit (Before tax) graph shows us that company declared a loss in 2001, small amount of profit in 2002 and 2003. We know that company is losing money in 2004 again. So the profitability increase that started in 2002 (which overall economy was performing fine) couldn’t keep up. We can also see that Gross Sale Profit is pretty good for a company in this sector (moving about %19 to %23 in 2001-2003) This shows the company is doing an important number of sales but the profitability of the firm doesn’t seem stable at this point. Lets look at other graphs, such as Financing Expenses. It is obvious that the Financing Expenditures decreased dramatically in 2001, but it didn’t change much in 2002 and 2003. We can say that the firm has borrowed money in 2001, invested it and firms current credit borrowing actions are in stand-by position. New investments made with such credit might be making changes in firm’s profitability in medium-term. But in the short term, looking at the Activity expenses, decreasing constantly, shows us that the firm is cutting production, or with increasing sales, company is trying to keep liquidity and profitability of the firm on the way.
Generally, the firm is not doing great for last 3-5 years. But it can be pointed out that if the credits borrowed by the firm are valued efficiently with new and successful investments, at this rate of increasing sales and decreasing expenses, the firm will be more succcessful firm in the long-run.
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