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 Report by Paul Borosky, MBA.

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

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

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

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

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

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%