Stock Analysis on Net

Coca-Cola Co. (NYSE:KO)

$19.99

Analysis of Operating Leases

Microsoft Excel

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

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Adjustments to Financial Statements for Operating Leases

Coca-Cola Co., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted)
Adjustment to Total Debt
Total debt (as reported)
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Current portion of operating lease liabilities (included in Accounts payable and accrued expenses)
Add: Noncurrent portion of operating lease liabilities (included in Other noncurrent liabilities)
Total debt (adjusted)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1, 2 Equal to total present value of future operating lease payments.


Coca-Cola Co., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Coca-Cola Co., adjusted financial ratios

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Total Asset Turnover1
Reported total asset turnover
Adjusted total asset turnover
Debt to Equity2
Reported debt to equity
Adjusted debt to equity
Return on Assets3 (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Coca-Cola Co. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Coca-Cola Co. adjusted debt to equity ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Coca-Cola Co. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Coca-Cola Co., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net operating revenues
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net operating revenues
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Total asset turnover = Net operating revenues ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Net operating revenues ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Coca-Cola Co. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Adjusted Debt to Equity

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total debt
Equity attributable to shareowners of The Coca-Cola Company
Solvency Ratio
Debt to equity1
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt
Equity attributable to shareowners of The Coca-Cola Company
Solvency Ratio
Adjusted debt to equity2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Debt to equity = Total debt ÷ Equity attributable to shareowners of The Coca-Cola Company
= ÷ =

2 Adjusted debt to equity = Adjusted total debt ÷ Equity attributable to shareowners of The Coca-Cola Company
= ÷ =

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Coca-Cola Co. adjusted debt-to-equity ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to shareowners of The Coca-Cola Company
Total assets
Profitability Ratio
ROA1
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to shareowners of The Coca-Cola Company
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROA = 100 × Net income attributable to shareowners of The Coca-Cola Company ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Net income attributable to shareowners of The Coca-Cola Company ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Coca-Cola Co. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.