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 Coca-Cola's concentrate operations and finished beverages in finished product operations). Inventories are valued at the lower of cost or market. Coca-Cola 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, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Raw materials and packaging 1,615  1,692  1,773  1,680  1,425 
Finished goods 1,134  1,240  1,171  1,198  1,029 
Other 351  345  320  214  196 
Inventories 3,100  3,277  3,264  3,092  2,650 

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 declined from 2012 to 2013 and from 2013 to 2014.
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 increased from 2012 to 2013 but then declined significantly from 2013 to 2014.
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 2012 to 2013 but then declined significantly from 2013 to 2014.

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