Analysis of Inventory

Difficulty level: Advanced


Inventory Accounting Policy

Inventories consist primarily of raw materials and packaging (which includes ingredients and supplies) and finished goods (which include concentrates and syrups in The Coca-Cola Company's concentrate operations and finished beverages in finished product operations). Inventories are valued at the lower of cost or market. The Coca-Cola Company determines cost on the basis of the average cost or first-in, first-out methods.

Source: Coca-Cola Co., Annual Report

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Inventory Disclosure

Coca-Cola Co., Statement of Financial Position, Inventory

USD $ in millions

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Raw materials and packaging 1,692  1,773  1,680  1,425  1,366 
Finished goods 1,240  1,171  1,198  1,029  697 
Other 345  320  214  196  291 
Inventories 3,277  3,264  3,092  2,650  2,354 

Source: Based on data from Coca-Cola Co. Annual Reports

Item Description The company
Raw materials and packaging Carrying amount as of the balance sheet date of unprocessed items to be consumed in the manufacturing or production process. Also includes purchased parts that will be used as components of a finished product. Coca-Cola Co.'s raw materials and packaging increased from 2011 to 2012 but then slightly declined from 2012 to 2013 not reaching 2011 level.
Finished goods Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. Coca-Cola Co.'s finished goods declined from 2011 to 2012 but then increased from 2012 to 2013 exceeding 2011 level.
Inventories Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). Coca-Cola Co.'s inventories increased from 2011 to 2012 and from 2012 to 2013.

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