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
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. |