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Coca-Cola Co. (KO) | Short-term (Operating) Activity Analysis
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

* Ratios (Summary) * Inventory Turnover * Receivables Turnover * Payables Turnover * Working Capital Turnover * Average Inventory Processing Period * Average Receivable Collection Period * Operating Cycle * Average Payables Payment Period * Cash Conversion Cycle

Ratios (Summary)

Coca-Cola Co., short-term (operating) activity ratios

| | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Turnover Ratios | | Inventory turnover | 13.25 | 13.16 | 14.61 | 13.00 | 14.68 | | Receivables turnover | 7.93 | 8.25 | 10.34 | 8.70 | 9.31 | | Payables turnover | 18.61 | 21.98 | 23.32 | 20.91 | 25.93 | | Working capital turnover | 6.76 | 6.59 | 8.18 | 6.94 | 7.30 | | Average No. of Days | | Average inventory processing period | 28 | 28 | 25 | 28 | 25 | | Add: Average receivable collection period | 46 | 44 | 35 | 42 | 39 | | Operating cycle | 74 | 72 | 60 | 70 | 64 | | Less: Average payables payment period | -20 | -17 | -16 | -17 | -14 | | Cash conversion cycle | 54 | 55 | 45 | 53 | 50 |
Source: Based on data from Coca-Cola Co. Annual Reports

Ratio | Description | The company | | | | Inventory turnover | An activity ratio calculated as revenue divided by inventory. | Coca-Cola Co.'s inventory turnover deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. | Receivables turnover | An activity ratio equal to revenue divided by receivables. | Coca-Cola Co.'s receivables turnover deteriorated from 2008 to 2009 and from 2009 to 2010. | Payables turnover | An activity ratio calculated as revenue divided by payables. | Coca-Cola Co.'s payables turnover declined from 2008 to 2009 and from 2009 to 2010. | Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Coca-Cola Co.'s working capital turnover deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. | Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Coca-Cola Co.'s average inventory processing period deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. | Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Coca-Cola Co.'s average receivable collection period deteriorated from 2008 to 2009 and from 2009 to 2010. | Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Coca-Cola Co.'s operating cycle deteriorated from 2008 to 2009 and from 2009 to 2010. | Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Coca-Cola Co.'s average payables payment period increased from 2008 to 2009 and from 2009 to 2010. | Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Coca-Cola Co.'s cash conversion cycle deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. |
Inventory Turnover | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data (USD $ in millions) | | Net operating revenues | 35,119 | 30,990 | 31,944 | 28,857 | 24,088 | | Inventories | 2,650 | 2,354 | 2,187 | 2,220 | 1,641 | | Inventory Turnover, Comparison to Industry | | Coca-Cola Co.1 | 13.25 | 13.16 | 14.61 | 13.00 | 14.68 | | Industry, Consumer Goods | 10.28 | 10.06 | 10.50 | 9.48 | 9.75 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Inventory turnover = Net operating revenues ÷ Inventories
= 35,119 ÷ 2,650 = 13.25

Ratio | Description | The company | Inventory turnover | An activity ratio calculated as revenue divided by inventory. | Coca-Cola Co.'s inventory turnover deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. |
Payables Turnover | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data (USD $ in millions) | | Net operating revenues | 35,119 | 30,990 | 31,944 | 28,857 | 24,088 | | Trade accounts payable | 1,887 | 1,410 | 1,370 | 1,380 | 929 | | Payables Turnover, Comparison to Industry | | Coca-Cola Co.1 | 18.61 | 21.98 | 23.32 | 20.91 | 25.93 | | Industry, Consumer Goods | 10.55 | 14.80 | 12.38 | 11.96 | 12.29 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Payables turnover = Net operating revenues ÷ Trade accounts payable
= 35,119 ÷ 1,887 = 18.61

Ratio | Description | The company | Payables turnover | An activity ratio calculated as revenue divided by payables. | Coca-Cola Co.'s payables turnover declined from 2008 to 2009 and from 2009 to 2010. |
Working Capital Turnover | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data (USD $ in millions) | | Net operating revenues | 35,119 | 30,990 | 31,944 | 28,857 | 24,088 | | Working capital | 5,193 | 4,702 | 3,907 | 4,157 | 3,299 | | Working Capital Turnover, Comparison to Industry | | Coca-Cola Co.1 | 6.76 | 6.59 | 8.18 | 6.94 | 7.30 | | Industry, Consumer Goods | 9.68 | 8.63 | 9.58 | 8.30 | 8.53 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Working capital turnover = Net operating revenues ÷ Working capital
= 35,119 ÷ 5,193 = 6.76

Ratio | Description | The company | Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Coca-Cola Co.'s working capital turnover deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. |
Average Inventory Processing Period | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data | | Inventory turnover | 13.25 | 13.16 | 14.61 | 13.00 | 14.68 | | Average Inventory Processing Period (no. of days), Comparison to Industry | | Coca-Cola Co.1 | 28 | 28 | 25 | 28 | 25 | | Industry, Consumer Goods | 36 | 36 | 35 | 39 | 37 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 13.25 = 28

Ratio | Description | The company | Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Coca-Cola Co.'s average inventory processing period deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. |
Average Receivable Collection Period | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data | | Receivables turnover | 7.93 | 8.25 | 10.34 | 8.70 | 9.31 | | Average Receivable Collection Period (no. of days), Comparison to Industry | | Coca-Cola Co.1 | 46 | 44 | 35 | 42 | 39 | | Industry, Consumer Goods | 37 | 31 | 33 | 36 | 35 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 7.93 = 46

Ratio | Description | The company | Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnoverd. | Coca-Cola Co.'s average receivable collection period deteriorated from 2008 to 2009 and from 2009 to 2010. |

Operating Cycle | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data (no. of days) | | Average inventory processing period | 28 | 28 | 25 | 28 | 25 | | Average receivable collection period | 46 | 44 | 35 | 42 | 39 | | Operating Cycle (no. of days), Comparison to Industry | | Coca-Cola Co.1 | 74 | 72 | 60 | 70 | 64 | | Industry, Consumer Goods | 72 | 67 | 68 | 74 | 73 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Operating cycle = Average inventory processing period + Average receivable collection period
= 28 + 46 = 74

Ratio | Description | The company | Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Coca-Cola Co.'s operating cycle deteriorated from 2008 to 2009 and from 2009 to 2010. |
Average Payables Payment Period | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data | | Payables turnover | 18.61 | 21.98 | 23.32 | 20.91 | 25.93 | | Average Payables Payment Period (no. of days), Comparison to Industry | | Coca-Cola Co.1 | 20 | 17 | 16 | 17 | 14 | | Industry, Consumer Goods | 35 | 25 | 29 | 31 | 30 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 18.61 = 20

Ratio | Description | The company | Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Coca-Cola Co.'s average payables payment period increased from 2008 to 2009 and from 2009 to 2010. | | | | | | |
Cash Conversion Cycle | | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | Dec 31, 2006 | | Selected Financial Data (no. of days) | | Average inventory processing period | 28 | 28 | 25 | 28 | 25 | | Average receivable collection period | 46 | 44 | 35 | 42 | 39 | | Average payables payment period | 20 | 17 | 16 | 17 | 14 | | Cash Conversion Cycle (no. of days), Comparison to Industry | | Coca-Cola Co.1 | 54 | 55 | 45 | 53 | 50 | | Industry, Consumer Goods | 38 | 42 | 38 | 44 | 43 |
Source: Based on data from Coca-Cola Co. Annual Reports

2010 Calculations
1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 28 + 46 – 20 = 54

Ratio | Description | The company | Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Coca-Cola Co.'s cash conversion cycle deteriorated from 2008 to 2009 but then slightly improved from 2009 to 2010. |

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