Question

Coca-Cola

Purpose Financial ratio analysis is one of the best techniques for identifying and evaluating internal strengths and weaknesses. Potential investors and current shareholders look closely at firms’ financial ratios, making detailed comparisons to industry averages and to previous periods of time. Financial ratio analyses provide vital input information for developing an IFE Matrix

Financial Ratios for Coca-Cola (2018)

Liquidity Ratios:
- Current ratio:
- Quick ratio:

Leverage Ratios:
- Debt-to-total-assets ratio:
- Debt-to-equity ratio:
- Long-term debt-to-equity ratio:
- Times-earned-interest ratio: Profits before interest and taxes/Total interest charges

Activity Ratios:
- Inventory turnover:
- Fixed assets turnover:
- Total assets turnover:
- Accounts receivable turnover:

Profitability Ratios:
- Gross profit margin:
- Operating profit margin:
- Net profit margin:
- Return on total assets (ROA):
- Return on stockholders’ equity (ROE):
- Earnings per share (EPS):
- Price-earnings ratio:

Growth Ratios:
- Sales                                  Annual % growth in total sales
- Net income                       Annual % growth in profits
- Earnings per share           
- Dividends per share

Answer 1

For 2018 (Refered official data on https://investors.coca-colacompany.com/financial-information/financial-results)

Ref Doc (https://d1io3yog0oux5.cloudfront.net/_39424a7a8dfbcbcf929341e955de3d2c/cocacolacompany/news/2019-02-14_Coca_Cola_Reports_Strong_Results_for_Fourth_962.pdf)

Liquidity Ratios:
- Current ratio:105% (Pg 11)
- Quick ratio: 95% (Pg11)

Leverage Ratios:
- Debt-to-total-assets ratio: 0.77 (pg 11)
- Debt-to-equity ratio:3.37 (pg 11)
- Long-term debt-to-equity ratio: 1.33 (Pg 11)
- Times-earned-interest ratio: Profits before interest and taxes/Total interest charges

8.1 times on gross basis for continuing operations (pg 10)

31.4 times on net interest basis for continuing operations (pg 10)

Activity Ratios:
- Inventory turnover:4.34 (pg 10, 11)
- Fixed assets turnover: 3.88 (Pg 10 & 11)
- Total assets turnover: 0.37 (Pg 10 & 11)
- Accounts receivable turnover: 9.02 (Pg 10 & 11 - assuming all sales have some component of credit due to lack of breakup of credit and cash sales data in financials)

Profitability Ratios:
- Gross profit margin: 63% (Pg10)
- Operating profit margin: 27% (Pg10)
- Net profit margin: 21% (Continuing operations only), 20% (Overall) - Pg10
- Return on total assets (ROA): 8% (on overall basis) Pg 10 & 11
- Return on stockholders’ equity (ROE): 34% (Overall basis), 38% (on shareowners capital) Pg 10 & 11
- Earnings per share (EPS):  1.51 (Basic), 1.50 (Diluted) - Pg 10
- Price-earnings ratio: 166 (16 Feb'2018) [Ref - https://ycharts.com/companies/KO/pe_ratio]

Growth Ratios:

- Sales Annual % growth in total sales -10% (negative) on consolidated net basis (GAAP) - Pg 10

   +4% on core business organic (Non GAAP) - Pg 29

- Net income                       Annual % growth in profits  +469% (saving in taxes by 71%) - Pg 10
- Earnings per share 1.51 (Basic), 1.50 (Diluted) - Pg 10
- Dividends per share 1.56 - Pg 10 & 12 (Dividend in cashflow divided by Basic No of shares)