Ratio Analysis of Coca Cola

Ratio Analysis of Coca Cola

Ratios Analysis |


Ratios Analysis 1
Index 2
Brief Introduction of the Coca-Cola Company 3
Liquidity Ratios 3
Current ratio 3
Quick Ratio 4
Asset Management Ratios 4
Inventory turnover ratio 4
Total Asset Turnover ratio 5
Debt Management Ratios 5
Debt-to-equity ratio 5
Times-interest-earned ratio 6
Profitability Ratios 6
Net profit margin 6
Market Value Ratios 7
Price/ Earnings (P/E) ratio 7
Market/ book Ratio 7
The Du Pont Equation 8
Summary 8
Appendix 9
Balance Sheet (2012) 9
Income Statement (2012) 10
Industry Average Ratios 11

Brief Introduction of the Coca-Cola Company
The Coca-Cola Company is the world’s largest beverage company, which in 2012 owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. The Coca-Cola Company owns and markets four of the world’s top five
Non-alcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries in nonalcoholic beverage industry.
To understand the financial position of The Coca-Cola Company, we now begin ratio analysis by calculating 10 of the 2012 financial ratios using data from the balance sheet and income statement in the 2012 CCC Annual Report.
Liquidity Ratios
Current ratio
Current ratio = current asset/ current liability = 30328/ 27821=1.09
Industry average = 1.11  
(Note: the industry average current ratio is adopted from the data of American Beverage Association in 2006)
The current ratio is larger than 1, so the company currently has enough money to pay what it currently owes.
The Coca-Cola Company has a slightly lower current ratio than the average for its industry. It means that the...

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