Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.
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Coca-Cola Co. pages available for free this week:
- 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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Balance-Sheet-Based Accruals Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Operating Assets | ||||||
Total assets | ||||||
Less: Cash and cash equivalents | ||||||
Less: Short-term investments | ||||||
Less: Marketable securities | ||||||
Operating assets | ||||||
Operating Liabilities | ||||||
Total liabilities | ||||||
Less: Loans and notes payable | ||||||
Less: Current maturities of long-term debt | ||||||
Less: Long-term debt, excluding current maturities | ||||||
Operating liabilities | ||||||
Net operating assets1 | ||||||
Balance-sheet-based aggregate accruals2 | ||||||
Financial Ratio | ||||||
Balance-sheet-based accruals ratio3 | ||||||
Benchmarks | ||||||
Balance-Sheet-Based Accruals Ratio, Competitors4 | ||||||
Mondelēz International Inc. | ||||||
PepsiCo Inc. | ||||||
Philip Morris International Inc. | ||||||
Balance-Sheet-Based Accruals Ratio, Sector | ||||||
Food, Beverage & Tobacco | ||||||
Balance-Sheet-Based Accruals Ratio, Industry | ||||||
Consumer Staples |
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).
1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= – =
2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= – =
3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =
4 Click competitor name to see calculations.
- Net operating assets
- The net operating assets exhibited a slight decline from 54,996 million US dollars at the end of 2021 to 53,344 million US dollars in 2022, reflecting a reduction in the asset base. However, in the subsequent years, there was a gradual recovery, with values increasing to 55,881 million in 2023 and further to 56,323 million in 2024. Overall, the trend indicates a minor contraction followed by a steady expansion in the net operating assets over the four-year period.
- Balance-sheet-based aggregate accruals
- The aggregate accruals demonstrated considerable volatility during the period under review. Starting at 1,833 million US dollars in 2021, the figure dropped substantially to a negative value of -1,652 million in 2022, indicating a reversal or reduction of accruals. There was a significant positive rebound in 2023, with aggregate accruals increasing to 2,537 million US dollars, before declining again to 442 million in 2024. This fluctuation suggests episodic changes in non-cash accounting adjustments affecting net income.
- Balance-sheet-based accruals ratio
- The accruals ratio paralleled the movements seen in aggregate accruals, beginning at 3.39% in 2021 and turning negative at -3.05% in 2022. The ratio then spiked to 4.65% in 2023, indicating a relatively higher level of accruals relative to net operating assets. This was followed by a notable decrease to 0.79% in 2024. This pattern reinforces the observation of volatility in accruals, with significant swings between positive and negative values impacting the financial reporting quality indicator.
Cash-Flow-Statement-Based Accruals Ratio
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Net income attributable to shareowners of The Coca-Cola Company | ||||||
Less: Net cash provided by operating activities | ||||||
Less: Net cash (used in) provided by investing activities | ||||||
Cash-flow-statement-based aggregate accruals | ||||||
Financial Ratio | ||||||
Cash-flow-statement-based accruals ratio1 | ||||||
Benchmarks | ||||||
Cash-Flow-Statement-Based Accruals Ratio, Competitors2 | ||||||
Mondelēz International Inc. | ||||||
PepsiCo Inc. | ||||||
Philip Morris International Inc. | ||||||
Cash-Flow-Statement-Based Accruals Ratio, Sector | ||||||
Food, Beverage & Tobacco | ||||||
Cash-Flow-Statement-Based Accruals Ratio, Industry | ||||||
Consumer Staples |
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).
1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =
2 Click competitor name to see calculations.
- Net Operating Assets
- The net operating assets showed a slight fluctuation over the reported periods. Beginning at 54,996 million US dollars at the end of 2021, there was a minor decrease to 53,344 million in 2022. Subsequently, the value increased over the next two years, reaching 55,881 million in 2023 and 56,323 million in 2024. Overall, the net operating assets exhibited a tendency for recovery and gradual growth following the initial dip in 2022.
- Cash-flow-statement-based Aggregate Accruals
- This measure demonstrated considerable variability during the examined periods. Starting at a small negative amount of -89 million US dollars in 2021, the figure declined markedly to -713 million in 2022, indicating increased negative accruals. In contrast, 2023 and 2024 registered notable positive values of 2,464 million and 1,302 million, respectively. This shift from negative to positive accruals suggests a significant improvement in cash-flow-related adjustments over time, although there was a reduction in the positive figure in 2024 compared to 2023.
- Cash-flow-statement-based Accruals Ratio
- The accruals ratio followed a pattern consistent with the aggregate accruals. It was negative at -0.16% in 2021 and dropped further to -1.32% in 2022, indicating increased proportionate negative accruals relative to net operating assets. The ratio then shifted to a positive range in 2023 at 4.51%, followed by a decline to 2.32% in 2024. This trend reflects an overall improvement in accrual quality, with a notable peak in 2023 before a reduction in 2024, suggesting some volatility in accrual management or cash flow adjustments in recent years.