Analysis of Property, Plant and Equipment
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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Property, Plant and Equipment Disclosure
Coca-Cola Co., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data on property, plant, and equipment over the given periods reveals several noteworthy trends.
- Land
- The value of land shows a consistent decline from 676 million US dollars at the end of 2020 to 226 million US dollars by the end of 2024. This indicates a significant reduction in land assets over the five-year period.
- Buildings and improvements
- The value initially decreased from 4,782 million US dollars in 2020 to 4,349 million in 2021 but then displayed a steady upward trend, increasing each year to reach 5,143 million by the end of 2024. This suggests ongoing investment or revaluation in buildings and improvements after a drop in the first year.
- Machinery and equipment
- This category experienced minor fluctuations. Starting at 14,242 million US dollars in 2020, it slightly decreased in subsequent years, reaching its lowest point at 13,593 million in 2023, before rising again to 14,504 million in 2024. The fluctuations indicate modest adjustments in machinery and equipment assets.
- Property, plant and equipment, cost
- The total recorded cost of property, plant, and equipment decreased from 19,700 million US dollars in 2020 to 18,469 million in 2023, followed by a recovery to 19,873 million in 2024. This pattern suggests a period of asset disposals or lower capital expenditures followed by renewed investment in the latest period.
- Accumulated depreciation
- Accumulated depreciation steadily increased in absolute terms (more negative) from -8,923 million US dollars in 2020 to -9,570 million in 2024, reflecting ongoing asset usage and wear over time. The near stability between 2022 and 2023 suggests a plateau in depreciation expense during that interval.
- Property, plant and equipment, net
- The net value of property, plant, and equipment decreased from 10,777 million US dollars in 2020 to 9,236 million in 2023, before increasing to 10,303 million by the end of 2024. This mirrors the movements in asset cost and depreciation, indicating an overall asset base that contracted over the first four years but began to recover in the final year.
Asset Age Ratios (Summary)
Coca-Cola Co., asset age ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Average Age Ratio
- The average age ratio exhibits a generally increasing trend from 46.9% in 2020 to a peak of 50.62% in 2023, followed by a slight decline to 48.71% in 2024. This pattern indicates that on average, the property, plant, and equipment are aging moderately over the period, with a small decrease in the last year suggesting slightly newer assets or improved replacement activity.
- Estimated Total Useful Life
- The estimated total useful life has increased steadily over the analyzed timeframe, starting at 14 years in 2020 and rising to 19 years by 2024. This upward trend suggests enhancements in the durability or expected operational lifespan of the assets, potentially reflecting newer technology, better maintenance, or revised asset management policies.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age remains relatively stable initially, at 7 years between 2020 and 2021, then increases gradually to 9 years by 2023 and remains constant through 2024. This steady increase signifies a natural aging process consistent with the passage of time without significant early retirement or disposal of assets during these years.
- Estimated Remaining Life
- The estimated remaining life displays some fluctuations: starting at 8 years in 2020, decreasing to 7 years in 2021, then rising to 10 years by 2024. This pattern indicates adjustments in asset lifespan estimations or the incorporation of new assets with longer remaining useful life, ultimately resulting in a growing expectation for the operational duration of the equipment.
Average Age
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, cost – Land)
= 100 × ÷ ( – ) =
- Accumulated Depreciation
- The accumulated depreciation exhibited a gradual increase over the observed periods, starting from 8,923 million US dollars at the end of 2020 and reaching 9,570 million US dollars by the end of 2024. The incremental rise was relatively steady, with a slight plateau between 2022 and 2023 before resuming the upward trend in 2024. This pattern indicates ongoing depreciation of the asset base, consistent with utilization and aging of property, plant, and equipment.
- Property, Plant and Equipment, Cost
- The cost of property, plant, and equipment showed some fluctuations during the timeframe. An initial decrease was observed from 19,700 million US dollars in 2020 to 18,469 million US dollars in 2023. However, there was a notable recovery in 2024, with the asset cost increasing to 19,873 million US dollars, surpassing the initial value in 2020. This suggests periodic investment or divestment cycles, with a possible asset renewal or expansion occurring towards the end of the period.
- Land
- The value attributed to land consistently declined throughout all years, decreasing from 676 million US dollars in 2020 to 226 million US dollars in 2024. This sharp reduction may imply disposals, reclassification, or impairments related to land holdings during this span.
- Average Age Ratio
- The average age ratio, expressing the proportion of accumulated depreciation to property, plant, and equipment cost, indicated an overall increasing trend from 46.9% in 2020 to a peak of 50.62% in 2023, before decreasing modestly to 48.71% in 2024. This trajectory reflects an aging asset base over most years, with some renewal or revaluation impact in the final year under review.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated total useful life = (Property, plant and equipment, cost – Land) ÷ Depreciation expense and amortization expense for leasehold improvements
= ( – ) ÷ =
The analysis of the property, plant, and equipment data over the five-year period reveals several notable trends and shifts in the company's asset base and related expenses.
- Property, Plant and Equipment, Cost
- The total cost of property, plant, and equipment experienced fluctuations throughout the period. After a decline from 19,700 million USD in 2020 to 18,862 million USD in 2021, the cost slightly increased in 2022 to 19,075 million USD, followed by a decrease to 18,469 million USD in 2023. In 2024, the cost rose again to 19,873 million USD. Overall, the asset cost showed variability but remained near the 19 billion USD mark, indicating ongoing investments and disposals or revaluations.
- Land
- The reported value of land decreased significantly from 676 million USD in 2020 to 226 million USD by 2024. This substantial drop, particularly sharp between 2022 and 2023, suggests divestiture or reclassification of land assets, reflecting a possible strategic shift or asset optimization within the portfolio.
- Depreciation and Amortization Expense
- The depreciation expense and amortization related to leasehold improvements displayed a consistent downward trend. Starting at 1,319 million USD in 2020, it reduced each year, reaching 1,014 million USD in 2024. This reduction indicates a decrease in the booked expense, which may result from asset retirements, extended useful lives, or changes in capital expenditure patterns.
- Estimated Total Useful Life
- The estimated useful life of assets extended steadily from 14 years in 2020 and 2021 to 19 years in 2024. This increase implies that assets are expected to remain productive longer, potentially reflecting improvements in asset quality, maintenance practices, or revisions in accounting estimates to better match asset usage patterns.
In summary, the data suggests active management of property, plant, and equipment, with investments balanced by disposals or asset reclassifications. The declining depreciation expense combined with an increasing useful life estimate points toward a strategic approach to asset longevity and cost allocation. The sharp reduction in land value is a distinctive element that may require further investigation to understand its impact on the overall asset portfolio and operations.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense and amortization expense for leasehold improvements
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation shows a steady upward trend over the five-year period. Starting at $8,923 million at the end of 2020, it increased marginally to $8,942 million in 2021, followed by a more noticeable rise to $9,234 million in 2022. The figure slightly decreased by one million to $9,233 million in 2023, but rose again to reach $9,570 million by the end of 2024. This overall increase indicates ongoing depreciation of the property, plant, and equipment assets.
- Depreciation Expense and Amortization Expense for Leasehold Improvements
- This expense has been declining steadily over the same timeframe. From $1,319 million in 2020, it decreased to $1,277 million in 2021, then continued to drop each year reaching $1,138 million in 2022, $1,032 million in 2023, and finally $1,014 million in 2024. This pattern suggests a reduction in depreciation charges related to leasehold improvements, which may be due to aging assets or reduced capital expenditures in this category.
- Time Elapsed Since Purchase
- The average time elapsed since purchase of the assets increased moderately from 7 years at the end of 2020 and 2021, to 8 years in 2022, and then 9 years in both 2023 and 2024. The increasing age of the assets likely correlates with the observed depreciation trends, particularly the accumulated depreciation growth and the decreasing annual depreciation expense for leasehold improvements.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated remaining life = (Property, plant and equipment, net – Land) ÷ Depreciation expense and amortization expense for leasehold improvements
= ( – ) ÷ =
The analysis of the property, plant, and equipment (PP&E) data over the reported periods reveals several noteworthy trends and patterns in the asset base and related expense components.
- Net Property, Plant, and Equipment
- The net PP&E figures show a fluctuating trend with a decline from 10,777 million USD at the end of 2020 to a low of 9,236 million USD in 2023. This represents a cumulative decrease of approximately 14% over three years. However, there is a notable rebound in 2024, with net PP&E increasing to 10,303 million USD. This recovery suggests renewed investment or revaluation efforts after a period of contraction.
- Land Assets
- The value attributed to land exhibits a steady and sharp decline throughout the period. It falls from 676 million USD in 2020 to just 226 million USD in 2024, marking a significant reduction of approximately 67%. This continuous decrease could indicate disposals or reclassification of land assets, or possibly impairments, reflecting a strategic shift or geographic realignment of tangible fixed assets.
- Depreciation and Amortization Expenses
- Depreciation and amortization expenses for leasehold improvements show a consistent downward trend, decreasing from 1,319 million USD in 2020 to 1,014 million USD in 2024. This decline of nearly 23% suggests either a reduction in leasehold assets subject to amortization or the aging and fully amortized status of certain assets, reducing the ongoing expense burden.
- Estimated Remaining Life of Assets
- There is an incremental increase in the estimated remaining life of the assets, from 8 years in 2020 to 10 years in 2024. This extension in asset life may indicate capital improvements or upgrades that extend the useful life of the assets, or a revaluation that adjusts the estimated duration assets are expected to remain productive.
Overall, the data reflects a period marked by asset base contraction followed by a modest recovery, a marked decline in land holdings, decreasing depreciation costs, and an extension in asset useful life estimates. These dynamics may imply strategic asset management focused on optimizing the productive capacity and value of the property, plant, and equipment despite fluctuating net holdings.