Liquidity Analysis

Difficulty level: Basic

Liquidity ratios measure the company's ability to meet its short-term obligations.


Ratios (Summary)

Coca-Cola Co., liquidity ratios

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Current ratio 1.13 1.09 1.05 1.17 1.28
Quick ratio 0.90 0.77 0.78 0.85 0.95
Cash ratio 0.73 0.59 0.58 0.61 0.67

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

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. Coca-Cola Co.'s current ratio improved from 2011 to 2012 and from 2012 to 2013.
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. Coca-Cola Co.'s quick ratio deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. Coca-Cola Co.'s cash ratio improved from 2011 to 2012 and from 2012 to 2013.

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Current Ratio

Coca-Cola Co., current ratio calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data (USD $ in millions)
Current assets 31,304  30,328  25,497  21,579  17,551 
Current liabilities 27,811  27,821  24,283  18,508  13,721 
Ratio
Current ratio1 1.13 1.09 1.05 1.17 1.28
Benchmarks
Current Ratio, Competitors
PepsiCo Inc. 1.24 1.10 0.96 1.11 1.44
Current Ratio, Sector
Soft Drinks 1.17 1.09 1.01 1.14 1.34
Current Ratio, Industry
Consumer Goods 1.15 1.14 1.12 1.16 1.09

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

2013 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 31,304 ÷ 27,811 = 1.13

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. Coca-Cola Co.'s current ratio improved from 2011 to 2012 and from 2012 to 2013.

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Quick Ratio

Coca-Cola Co., quick ratio calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data (USD $ in millions)
Cash and cash equivalents 10,414  8,442  12,803  8,517  7,021 
Short-term investments 6,707  5,017  1,088  2,682  2,130 
Marketable securities 3,147  3,092  144  138  62 
Trade accounts receivable, less allowances 4,873  4,759  4,920  4,430  3,758 
Total quick assets 25,141  21,310  18,955  15,767  12,971 
Current liabilities 27,811  27,821  24,283  18,508  13,721 
Ratio
Quick ratio1 0.90 0.77 0.78 0.85 0.95
Benchmarks
Quick Ratio, Competitors
PepsiCo Inc. 0.93 0.80 0.62 0.80 1.00
Quick Ratio, Sector
Soft Drinks 0.92 0.78 0.71 0.83 0.97
Quick Ratio, Industry
Consumer Goods 0.80 0.77 0.78 0.81 0.72

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

2013 Calculations

1 Quick ratio = Total quick assets ÷ Current liabilities
= 25,141 ÷ 27,811 = 0.90

Ratio Description The company
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. Coca-Cola Co.'s quick ratio deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.

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Cash Ratio

Coca-Cola Co., cash ratio calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data (USD $ in millions)
Cash and cash equivalents 10,414  8,442  12,803  8,517  7,021 
Short-term investments 6,707  5,017  1,088  2,682  2,130 
Marketable securities 3,147  3,092  144  138  62 
Total cash assets 20,268  16,551  14,035  11,337  9,213 
Current liabilities 27,811  27,821  24,283  18,508  13,721 
Ratio
Cash ratio1 0.73 0.59 0.58 0.61 0.67
Benchmarks
Cash Ratio, Competitors
PepsiCo Inc. 0.54 0.39 0.24 0.40 0.47
Cash Ratio, Sector
Soft Drinks 0.66 0.52 0.43 0.51 0.59
Cash Ratio, Industry
Consumer Goods 0.38 0.37 0.39 0.40 0.32

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

2013 Calculations

1 Cash ratio = Total cash assets ÷ Current liabilities
= 20,268 ÷ 27,811 = 0.73

Ratio Description The company
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. Coca-Cola Co.'s cash ratio improved from 2011 to 2012 and from 2012 to 2013.

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