Coca-Cola's Financial Statements and Financial Ratios Analyzed from 2014 to 2018
"Coca-Cola 2018 Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA., doctoral candidate, and owner of Quality Business Plan. In this summarized book, the author researched Coca-Cola's (Coke) 10k, Coca-Cola's 2017 10k annual report, Coca-Cola's 2016 10k annual report, Coca-Cola's 2015 10k annual report, and Coca-Cola's 2019 10k annual report as the basis for information gathering. Once all Coca-Cola's 10k annual statements were collected, the author then inserted Coca-Cola's income statement information and Coca-Cola's balance sheet information into a customized financial template.
Coca-Cola's Company Summary From 2014 to 2018
The Coca-Cola Company was start in 1886, as a beverage organization. The firm’s specialty is non-alcoholic beverages. Coke does business in Europe, Middle East, Africa, Latin America, North America, and Asia. Their headquarters is located at One Coca-Cola Plaza in Atlanta, Ga. They employ about 62,000 people. Coke competes in the beverage – soft drink industry. As for competitors, Coke competes with Pepsi, Nestle, Dr. Pepper, and Kraft Heinz.
Coca Cola Financial Statements and Ratios
Page Count: 88
Table of Contents
- Disclaimer 3
- Acknowledgments 4
- Forward 5
- About the Author 6
- Company Summary 7
- Financial Statement Introduction 8
- Income Statement 9
- Coca Cola’s Income Statement – Summary Analysis 10
- Balance Sheet 21
- Coca Cola’s Balance Sheet – Summary Analysis 22
- Financial Ratios 42
- Coca-Cola’s Financial Ratio - Summary Analysis 42
- Liquidity Ratios 43
- Current Ratio 43
- Quick Ratio 45
- Cash Ratio 46
- Other Liquidity Ratios 47
- Net Working Capital 47
- Asset Ratios 49
- Total Asset Turnover 50
- Fixed Asset Turnover 51
- Days Sales Outstanding 52
- Inventory Turnover 53
- Accounts Receivable Turnover 54
- Accounts Payable Turnover 55
- Other Asset Ratio Calculations 56
- Working Capital Turnover 56
- Average Days in Inventory 57
- Average Days Payable 57
- Profitability Ratios 58
- Return on Assets (ROA) 59
- Return on Equity (ROE) 60
- Profit Margin 61
- Gross Profit Margin 62
- Operating Profit Margin 63
- Basic Earnings Power 64
- ROCE 64
- Capital Employed 64
- Debt Ratios 66
- Free Cash Flow (FCF) 70
- Free Cash Flows – 2015 - 2018 70
- Free Cash Flows – 5 Year Projections 70
- Income Statement – Projections for 5 years 72
- Income Statement – 5 Year Projections 72
- Balance Sheet – Projections for 5 years 74
- Balance Sheet – 5 Year Projections 75
- Appendix 1: Summarized Income Statement 77
- Appendix 2: Income Statement – Percent of Sales 78
- Appendix 3: Income Statement – Year over Year Growth 79
- Appendix 4: Summarized Balance Sheet 80
- Appendix 5 Balance Sheet Percent of Total Assets 82
- Appendix 6 Summarized Financial Ratios 84
Section 1: Coca Cola Income Statement Analyzed 2014 - 2018
In the last several years, Coca-Cola’s revenues have decreased from about $45.9 billion to $31.9 billion. The revenue decrease very well may have been because of increased competition. Interestingly enough though, their net profits have managed to stay between $6-$7 billion over the last several years, with one exception during 2017. In order to achieve these types of profits, while suffering significant revenue loss, the firm may have focused on cost controls over this time span.
Coca Cola Income Statement 2018 |
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| 2018 | 2017 | 2016 | 2015 | 2014 | |
| Revenues | 31,856 | 35,410 | 41,863 | 44,294 | 45,998 |
| COGS | 11,770 | 13,255 | 16,465 | 17,482 | 17,889 |
| Gross Profit | 20,086 | 22,155 | 25,398 | 26,812 | 28,109 |
| SG&A | 10,307 | 12,654 | 15,370 | 16,427 | 17,218 |
| Depreciation | - | - | - | - | - |
| R & D | - | - | - | - | - |
| Other | - | - | - | - | - |
| Operating Expenses | 1,079 | 1,902 | 1,371 | 1,657 | 1,183 |
| EBIT | 8,700 | 7,599 | 8,657 | 10,998 | 11,485 |
| Other Income | 682 | 677 | 642 | 8,728 | 9,708 |
| Interest Expense | 919 | 841 | 733 | 613 | 594 |
| EBT | 7,781 | 6,758 | 7,924 | 10,385 | 10,891 |
| Taxes | 1,623 | 5,560 | 1,586 | 2,239 | 2,201 |
| Net Income | 6,476 | 1,283 | 6,550 | 7,366 | 7,124 |
| Tax Rate | 20.9% | 82.3% | 20.0% | 21.6% | 20.2% |
| Dividends | - | - | - | - | - |
| Number of Shares | - | ||||
| Basic EPS | 7.93 | 3.00 | 5.63 | 5.07 | 5.58 |
Section 2: Coca Cola Balance Sheet Analyzed 2014 to 2018
In the last five years, Coca-Cola’s cash position has decreased from $18 billion to a little over $10.9 billion. In some cases, this cash position decrease may be beneficial. However, because Coca-Cola’s revenues have been falling substantially, the cash position reduction may have been due to covering costs as compared to investing in future growth.
A second interesting aspect of Coca-Cola’s balance sheet analysis would be the company’s long-term debt position. In 2014, the organization had approximately $19 billion in debt. As of 2018, their long-term deposition grew substantially to $25.3 billion. With revenues falling, taking on additional debt may not be the best strategic action for the company.
Coca Cola Summary Balance Sheet 2018 |
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| 2018 | 2017 | 2016 | 2015 | 2014 | |
| Cash | 10,951 | 15,358 | 18,150 | 15,631 | 18,010 |
| Short Term Investment | 5,013 | 5,317 | 4,051 | 4,269 | 3,665 |
| Account Receivable | 3,396 | 3,667 | 3,856 | 3,941 | 4,466 |
| Inventory | 2,766 | 2,655 | 2,675 | 2,902 | 3,100 |
| Other | - | - | - | - | - |
| Current Assets | 30,634 | 36,545 | 34,010 | 33,393 | 32,986 |
| Net PPE | 8,232 | 8,203 | 10,635 | 12,571 | 14,633 |
| Goodwill | 10,263 | 9,401 | 10,629 | 11,289 | 12,100 |
| Other | - | - | - | - | - |
| Total Assets | 83,216 | 87,896 | 87,270 | 89,996 | 92,023 |
| Accounts Payable | 8,932 | 8,748 | 9,490 | 9,660 | 9,234 |
| Accrued Expense | - | - | - | - | - |
| Accrued Taxes | 378 | 410 | 307 | 331 | 400 |
| Notes Payable | 13,194 | 13,205 | 12,498 | 13,129 | 19,130 |
| LT Debt - Current | 4,997 | 3,298 | 3,527 | 2,676 | 3,552 |
| Other | - | - | - | - | - |
| Total Current Liabilities | 29,223 | 27,194 | 26,532 | 26,929 | 32,374 |
| LT Debt | 25,364 | 31,182 | 29,684 | 28,311 | 19,063 |
| Other | - | - | - | - | - |
| Total Liabilities | 64,158 | 68,919 | 64,050 | 64,232 | 61,462 |
| Common Stock | 1,760 | 1,760 | 1,760 | 1,760 | 1,760 |
| Treasury | 2,772 | 2,781 | 7,040 | 7,040 | 7,040 |
| Retained Earnings | 63,234 | 60,430 | 65,502 | 65,018 | 63,408 |
| Other | - | - | |||
| Total Equity | 19,058 | 18,977 | 23,220 | 25,764 | 30,561 |
| Total Equity & Liability | 83,216 | 87,896 | 87,270 | 89,996 | 92,023 |
Section 3: Coca-Cola's Financial Ratio Summary From 2014 to 2018
Coca-Cola’s current ratio has stayed steady between 1.02 and 1.34. This shows that the firm should remain financially solvent in the short term. As for the company’s fixed asset turnover, this shows increased efficiency. Specifically, their fixed asset turnover has increased from 3.14 to 3.87 over the course of five years. In important aspect for investors is always the return on equity. For Coca-Cola, the company has fluctuated between 6.76% to 33.98%. A driving reason for the company's improved return on equity may be their usage of debt. In 2014, the company had a debt ratio of approximately 20.7%. As of 2018, this ratio grew to 30.4%.
Coca Cola Liquidity Ratios 2018 |
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| Ratios | 2018 | 2017 | 2016 | 2015 | 2014 |
| Current Ratio | 1.05 | 1.34 | |||
| Cash Ratio | 0.37 | 0.56 | |||
| Quick Ratio | 0.95 | 1.25 | |||
| Net Working Capital | 7,803 | 12,522 | |||
Coca Cola Asset Utilization 2018 |
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| Ratios | 2018 | 2017 | 2016 | 2015 | 2014 |
| Total Asset Turnover | 0.38 | 0.40 | |||
| Fixed Asset Turnover | 3.87 | 4.32 | |||
| Days Sales Outstanding | 38.91 | 37.80 | |||
| Inventory Turnover | 11.52 | 13.34 | |||
| Accounts Receivable Turnover | 9.38 | 9.66 | |||
| Working Capital Turnover | 4.08 | 2.83 | |||
| AP Turnover | 3.57 | 4.05 | |||
| Average Days Inventory | 0.03 | 0.04 | |||
| Average Days Payable | 0.01 | 0.01 | |||
Coca Cola Profitability Ratios 2018 |
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| Ratios | 2018 | 2017 | 2016 | 2015 | 2014 |
| Return on Assets | 7.78% | 1.46% | |||
| Return on Equity | 33.98% | 6.76% | |||
| Net Profit Margin | 20.33% | 3.62% | |||
| Gross Profit Margin | 63.05% | 62.57% | |||
| Operating Profit Margin | 27.31% | 21.46% | |||
| Basic Earning Power | 10.45% | 8.65% | |||
| ROCE | 16.11% | 12.52% | |||
| Capital Employed | 53,993 | 60,702 | |||
| ROIC | 42.94% | 6.50% | |||