Coca-Cola's Financial Statements and Financial Ratios Analyzed from 2015 to 2019
Hey All,
Thanks for visiting my Coca Cola Financial Report page. On this page, you will be able to find preliminary information about Coca Cola current financial performance as well as some historical track records and trends.
For a more detailed examination of Coca Cola financial performance, please check out the "Financial Report". In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:
- Summarized income statement for the last 5 years.
- Summarized balance sheet for the last 5 years.
- Summary analysis by myself of important income statement, balance sheet, and financial ratio trends and other happenings.
- Five year’s worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
- Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
- Professional financial analysis tips provided in each section to help YOU conduct your OWN financial analysis!
- Each section includes an “in other words” segment. This is were I use plain English to explain concepts.
Enjoy the preliminary information and for a more detailed analysis, buy the financial report!
Sincerely,
Paul MBA.
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Sample Financial Report
Coca-Cola's Company Summary From 2015 to 2019
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 Report Sources
"Coca-Cola 2019 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 report, the author researched Coca-Cola's (Coke) 10k, Coca-Cola's 2019 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.
Section 1: Coca Cola Income Statement Analyzed 2015 - 2019
In this section, I walk through a broad definition as to what an income statement is and why it is important. From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I finally offer a summary analysis of Coca Cola's important income statement line item trends from 2015 to 2019, in most cases.
Revenue Growth: In 2015, revenues were approximately $44.2 billion. Over the next several years, Coke’s revenues would decline to 37.2 billion. This is an average annual decline rate of about 4%. This shows that the company is losing market share to competitors. Also, the reduction in revenues may be indicative of society’s demand for sugary soft drinks. Because of this, the organization needs to divest its holdings and possibly invest in other revenue sources that are more aligned with society’s needs.
Cost of Goods Sold: Coke’s cost of goods, as compared to revenues, was 39.5% in 2015. As of 2019, the cost of goods as a percentage of revenues fell to approximately 39.2%. This shows that the company is doing an excellent job of aligning the cost of goods with prices. To accomplish this feat, the company is either doing an excellent job with negotiating raw material prices with vendors. Or, the company is passing on increased raw material costs to its customers. Finally, the firm may very well be doing both.
Coca Cola Summary Income Statement 2019 |
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| Column1 | 2019 | 2018 | 2017 | 2016 | 2015 |
| Revenues | 37,266 | 34,300 | 36,212 | 41,863 | 44,294 |
| COGS | 14,619 | 13,067 | 13,721 | 16,465 | 17,482 |
| Gross Profit | 22,647 | 21,233 | 22,491 | 25,398 | 26,812 |
| SG&A | 12,103 | 11,002 | 12,834 | 15,262 | 16,427 |
| Depreciation | 1,365 | 1,086 | 1,260 | 1,787 | 1,970 |
| R & D | |||||
| Other | 458 | 1,079 | 1,902 | 1,510 | 1,657 |
| Operating Expenses | 12,561 | 12,081 | 14,736 | 16,772 | 18,084 |
| EBIT | 11,732 | 9,175 | 7,743 | 8,869 | 10,461 |
| Other Income | |||||
| Interest Expense | 946 | 950 | 853 | 733 | 856 |
| EBT | 10,786 | 8,225 | 6,890 | 8,136 | 9,605 |
| Taxes | 1,801 | 1,749 | 5,607 | 1,586 | 2,239 |
| Net Income | 8,985 | 6,476 | 1,283 | 6,550 | 7,366 |
Section 2: Coca Cola Balance Sheet Analyzed 2015 to 2019
For Coke's balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define Coke's balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019. Next, I then offer an analysis of Coke's balance sheet line item.
Cash: Coca-Cola ended 2015 with a cash position of about $7.3 billion. In the next four years, the company would grow there cash position to approximately $9 billion. However, in 2019, their cash position fell to $6.4 billion. Quite frankly, the cash position seems to be all over the board. As a percentage of sales, this position ranges from 16% to 26%. As a percentage of total assets, the cash position ranges from 6.8% to 10.9%. Based on this analysis, it’s difficult to determine how the executive team sets there cash position. Without a clear understanding, investors will have difficulty in ascertaining whether the firm has clear working strategies to ensure short-term solvency.
Short-term Investments: Coca-Cola ended 2015 with approximately $12.5 billion in short-term investments. In the next several years, the short-term investment position would fall to $4.6 billion. This indicates that the firm is using short-term investments towards operations or acquiring competitor businesses.
Coca Cola Summary Balance Sheet 2019 |
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| Column1 | 2019 | 2018 | 2017 | 2016 | 2015 |
| Cash | 6,480 | 9,077 | 6,006 | 8,555 | 7,309 |
| Short Term Investment | 4,695 | 7,038 | 14,669 | 13,646 | 12,591 |
| Account Receivable | 3,971 | 3,685 | 3,667 | 3,856 | 3,941 |
| Inventory | 3,379 | 3,071 | 2,655 | 2,675 | 2,902 |
| Other | |||||
| Current Assets | 20,411 | 24,930 | 36,545 | 34,010 | 33,395 |
| Net PPE | 10,838 | 9,598 | 8,203 | 10,635 | 12,571 |
| Goodwill | 16,764 | 14,109 | 9,401 | 10,629 | 11,289 |
| Other | |||||
| Total Assets | 86,381 | 83,216 | 87,896 | 87,270 | 89,996 |
| Accounts Payable | 11,312 | 9,533 | 8,748 | 9,490 | 9,660 |
| Accrued Expense | |||||
| Accrued Taxes | 414 | 411 | 410 | 307 | 331 |
| Notes Payable | 10,994 | 13,835 | 13,205 | 12,498 | 13,129 |
| LT Debt - Current | 4,253 | 5,003 | 3,298 | 3,527 | 2,676 |
| Other | |||||
| Total Current Liabilities | 26,973 | 28,782 | 27,194 | 26,532 | 26,929 |
| LT Debt | 27,516 | 25,376 | 31,182 | 29,684 | 28,311 |
| Other | |||||
| Total Liabilities | 44,185 | 45,100 | 49,942 | 40,830 | 38,468 |
| Common Stock | 18,914 | 18,280 | 17,624 | 16,753 | 15,776 |
| Treasury | 52,244 | 51,719 | 50,677 | 47,988 | 45,066 |
| Retained Earnings | 65,855 | 63,234 | 60,430 | 14,993 | 14,016 |
| Other | |||||
| Total Equity | 21,098 | 19,058 | 18,977 | 23,220 | 25,764 |
| Total Equity & Liability | 65,283 | 64,158 | 68,919 | 64,050 | 64,232 |
Section 3: Coca-Cola's Financial Ratio Summary From 2015 to 2019
For this section, I have chosen about 16 different financial ratios to review for Coca Cola from 2015 to 2019. In reviewing each of Coke's financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of Coke's important financial ratios. Important ratios calculated and analyzed for the last five years include:
Coca Cola Current Ratio
Coca-Cola’s current ratio as of 2015 was 1.24. This shows that the firm had more than enough current assets to cover its liabilities over the next 12 months. Further, in the next three years, the organization would increase its current ratio position to 1.34. As of 2018, though, the company would then lower their current ratio to .87 and then even lower in 2019 to .76. This shows that the firm could be having liquidity issues within the next several years. To mitigate this problem, the organization may need to sell off some of its underperforming fixed assets and shore up its cash position.
Coca Cola Total Asset Turnover
Coca-Cola’s total asset turnover was .49 in 2015. In the next several years, the total asset turnover would steadily decline to .43 and 2019. This shows that the firm is continually utilizing their assets less optimally over an extended period of time. To mitigate this issue, the firm needs to either divest and sell some fixed assets that are underperforming. Or, the organization needs to take action and increase their sales, which will directly impact utilization rates for operational assets.
Coca Cola Return on Equity
The organization’s return on equity ended 2015 at 28.6%. In the next three years, this ratio would fall to 6.8% in 2017. However, through cost-cutting measures, the organization drastically improves the return on equity for 2018 and 2019. This resulted in a return on equity of 42.6% in 2019. This shows that the firm was able to substantially improve their reliance on debt for operations and growth as compared to equity. By relying more on debt for operations and growth, the company is able to reduce its equity position. With the reduced equity position, this inevitably leads to a higher return on equity.
Coca Cola Debt Ratio
Coca-Cola’s debt ratio in 2015 was 31.5%. In the next two years, the debt ratio would climb to 35.5% in 2017. For 2018, the organization would reduce its debt ratio to 30.5%. As for 2019, the debt ratio would climb to 31.85%. The fluctuations in the company’s debt ratio make understanding their strategy for capital budgeting difficult. Is their optimal debt level 31%? 35%? Pick a specific equity and debt mix and stick with it for the long term.
Coca Cola 2019 Liquidity Ratios |
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| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Current Ratio | 0.76 | 0.87 | |||
| Cash Ratio | 0.24 | 0.32 | |||
| Quick Ratio | 0.63 | 0.76 | |||
| Net Working Capital | 2,104 | 5,889 | |||
Coca Cola 2019 Asset Utilization |
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| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Total Asset Turnover | 0.43 | 0.41 | |||
| Fixed Asset Turnover | 3.44 | 3.57 | |||
| Days Sales Outstanding | 38.89 | 39.21 | |||
| Inventory Turnover | 11.03 | 11.17 | |||
| Accounts Receivable Turnover | 9.38 | 9.31 | |||
| Working Capital Turnover | 17.71 | 5.82 | |||
| AP Turnover | 3.29 | 3.60 | |||
| Average Days Inventory | 0.03 | 0.03 | |||
| Average Days Payable | 0.01 | 0.01 | |||
Coca Cola 2019 Profitability Ratios |
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| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Return on Assets | 10.40% | 7.78% | |||
| Return on Equity | 42.59% | 33.98% | |||
| Net Profit Margin | 24.11% | 18.88% | |||
| Gross Profit Margin | 60.77% | 61.90% | |||
| Operating Profit Margin | 31.48% | 26.75% | |||
| Basic Earning Power | 13.58% | 11.03% | |||
| ROCE | 19.75% | 16.86% | |||
| Capital Employed | 59,408 | 54,434 | |||
| ROIC | 75.51% | 46.65% | |||
Coca Cola 2019 Long-term Debt |
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| Ratios | 2019 | 2018 | 2017 | 2016 | 2015 |
| Debt Ratio | 31.85% | 30.49% | |||
| Debt/Equity | 130.42% | 133.15% | |||
| Times Interest Earned | 12.40 | 9.66 | |||