Coca-Cola Co. (NYSE:KO)

The financial ratios presented demonstrate varied trends over the five-year period. Generally, adjusted ratios show more volatility than reported ratios, suggesting the impact of adjustments is material to the overall financial picture. Several key areas exhibit notable shifts, particularly in profitability and leverage.

Asset Turnover

Both reported and adjusted total asset turnover ratios remained relatively stable between 2021 and 2024, fluctuating around 0.46-0.47. A slight decrease to 0.46 is observed in the final year. The adjusted ratio consistently shows a marginally higher value, indicating that adjustments tend to increase the efficiency of asset utilization as measured by this metric.

Liquidity

The reported current ratio experienced a decline from 1.13 in 2021 to a low of 1.03 in 2024 before a substantial increase to 1.46 in 2025. The adjusted current ratio mirrors this trend, with a similar increase in 2025 to 1.48. This suggests an improvement in short-term liquidity in the most recent year.

Leverage

Reported debt to equity decreased from 1.86 to 1.62 between 2021 and 2022, then increased to 1.79 in 2024 before falling to 1.41 in 2025. The adjusted debt to equity ratio shows a similar pattern, but with lower values overall, ending at 1.31 in 2025. Both reported and adjusted debt to capital ratios followed a similar trend, decreasing from 0.65 to 0.57 over the period. Reported financial leverage increased from 4.10 to 4.05 between 2021 and 2024, then decreased to 3.26 in 2025. The adjusted financial leverage ratio shows a similar pattern, decreasing to 2.89 in 2025. These trends indicate a reduction in financial risk as measured by leverage in the final year.

Profitability

The reported net profit margin fluctuated, starting at 25.28% in 2021, decreasing to 22.19% in 2022, then increasing to 27.34% in 2025. However, the adjusted net profit margin shows significantly more volatility, decreasing substantially to 20.12% in 2022 and increasing dramatically to 33.81% in 2025. This suggests that adjustments have a considerable impact on reported profitability. Reported ROE remained relatively stable between 39.59% and 42.77% from 2022 to 2024, with a slight decrease to 40.74% in 2025. Adjusted ROE experienced greater fluctuation, falling to 31.41% in 2022 and rising to 45.07% in 2025. Similarly, reported ROA remained relatively consistent, while adjusted ROA showed more variation, increasing significantly to 15.57% in 2025. These changes in ROE and ROA align with the fluctuations observed in the net profit margin.

In summary, the period demonstrates a general trend towards improved liquidity and reduced leverage in the final year. Profitability metrics, particularly when adjusted, exhibit significant volatility, with a notable increase in the most recent year. The differences between reported and adjusted ratios highlight the importance of understanding the nature of the adjustments being made to accurately assess the financial performance and position.

The period between December 31, 2021, and December 31, 2025, demonstrates a generally stable, and slightly improving, performance in asset utilization as measured by the adjusted total asset turnover ratio. Net operating revenues exhibited consistent growth throughout the period, while total assets also increased, though with some fluctuation. A comparison of reported and adjusted total asset turnover reveals a minor difference, suggesting the adjustments made to total assets have a limited impact on the overall assessment of efficiency.

Net Operating Revenues

Net operating revenues increased from US$38,655 million in 2021 to US$47,941 million in 2025. The growth was most pronounced between 2021 and 2022, with subsequent years showing more moderate increases. This consistent revenue growth is a positive indicator.

Total Assets

Total assets experienced an initial decrease from US$94,354 million in 2021 to US$92,763 million in 2022. However, assets then increased steadily through 2025, reaching US$104,816 million. This suggests a period of investment and expansion following the initial dip.

Reported Total Asset Turnover

The reported total asset turnover ratio showed an initial increase from 0.41 in 2021 to 0.47 in 2022, then remained relatively stable at 0.47 for 2023 and 2024, before decreasing slightly to 0.46 in 2025. This indicates a consistent, though not dramatically changing, level of revenue generated per dollar of assets.

Adjusted Total Assets

Adjusted total assets mirrored the trend of total assets, with a decrease in 2022 followed by consistent increases through 2025, reaching US$104,105 million. The adjustments made to total assets appear to follow a similar pattern to the overall asset base.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio increased from 0.42 in 2021 to 0.47 in 2022, and then stabilized at 0.47 for both 2023 and 2024. A slight decrease to 0.46 was observed in 2025. The ratio generally aligns with the reported total asset turnover, indicating that the adjustments to total assets do not significantly alter the efficiency assessment. The sustained ratio above 0.40 suggests reasonable efficiency in utilizing assets to generate revenue.

In conclusion, the company demonstrates a consistent ability to generate revenue relative to its asset base. The slight fluctuations in the adjusted total asset turnover ratio are not substantial and do not indicate a significant shift in operational efficiency. The continued growth in net operating revenues, coupled with a managed increase in total assets, suggests a healthy and sustainable business model.

The adjusted current ratio exhibits a generally stable pattern with a notable increase in the most recent year. From 2021 to 2023, the ratio remained relatively consistent, followed by a slight decrease in 2024, and a significant rise in 2025. This suggests a fluctuating, but ultimately improving, short-term liquidity position.

Adjusted Current Ratio Trend

The adjusted current ratio began at 1.16 in 2021 and increased marginally to 1.17 in 2022. It remained stable at 1.16 in 2023 before decreasing to 1.05 in 2024. A substantial increase to 1.48 is observed in 2025, indicating a strengthened ability to cover short-term liabilities with adjusted current assets.

Comparison to Reported Current Ratio

The adjusted current ratio consistently exceeds the reported current ratio across all observed periods. This indicates that the adjustments made to current assets positively impact the liquidity assessment. The difference between the reported and adjusted ratios suggests that the nature of the adjustments is beneficial to portraying a more accurate short-term financial position.

Underlying Asset and Liability Movements

Adjusted current assets increased from US$23,061 million in 2021 to US$31,539 million in 2025. Current liabilities decreased from US$19,950 million in 2021 to US$21,281 million in 2025. The combination of increasing adjusted current assets and decreasing current liabilities contributed to the improved adjusted current ratio in 2025.

The observed fluctuations warrant further investigation into the specific adjustments made to current assets to understand their impact on the ratio and overall liquidity. The significant improvement in 2025, driven by both asset and liability movements, suggests a positive shift in the company’s short-term financial health.

The adjusted debt to equity ratio exhibited a generally decreasing trend over the five-year period, although with some fluctuation. Total debt demonstrated an overall increase from 2021 to 2025, while equity attributable to shareowners showed more volatility, with a significant increase in the final year. The adjusted figures, incorporating modifications to both debt and equity, present a slightly different picture than the reported ratio, but the overall trend remains consistent.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio decreased from 1.69 in 2021 to 1.31 in 2025. This indicates a strengthening of the equity position relative to debt over the period. However, the decline was not linear; the ratio increased slightly from 1.47 in 2022 to 1.49 in 2023 before resuming its downward trajectory.

Debt Evolution

Adjusted total debt increased steadily from US$40,603 million in 2022 to US$47,214 million in 2025. The initial value in 2021 was US$44,232 million, with a decrease in 2022, followed by consistent increases in subsequent years. This suggests a growing reliance on debt financing, particularly in the later years of the observed period.

Equity Evolution

Adjusted total equity showed a consistent increase from US$26,108 million in 2021 to US$35,970 million in 2025. The most substantial increase occurred between 2024 and 2025, rising from US$28,029 million to US$35,970 million. This significant growth in equity likely contributed to the overall decrease in the adjusted debt to equity ratio in the final year.

Comparison to Reported Debt to Equity

The reported debt to equity ratio mirrored the trend of the adjusted ratio, decreasing from 1.86 in 2021 to 1.41 in 2025. However, the reported ratio consistently remained higher than the adjusted ratio throughout the period, indicating that the adjustments made to debt and equity resulted in a more favorable leverage position when considered together.

In summary, while debt levels increased in absolute terms, the growth in equity, particularly in 2025, outpaced the increase in debt, leading to an improved adjusted debt to equity ratio. The adjustments to debt and equity appear to moderate the leverage position compared to the reported figures.

The information presents a five-year trend of debt and capital figures, culminating in adjusted debt-to-capital ratios. Total debt exhibited initial decline followed by increases, while total capital generally increased over the period. The adjusted figures demonstrate similar patterns, though with differing magnitudes. A detailed examination of the adjusted debt-to-capital ratio reveals a nuanced picture of the company’s financial leverage.

Adjusted Debt-to-Capital Ratio - Overall Trend

The adjusted debt-to-capital ratio decreased from 0.63 in 2021 to 0.60 in both 2022 and 2023. A slight increase to 0.62 was observed in 2024, followed by a further decrease to 0.57 in 2025. This indicates a general trend towards reduced reliance on debt financing relative to capital over the five-year period, with a minor interruption in 2024.

Adjusted Debt and Capital Components

Adjusted total debt increased from US$40,603 million in 2022 to US$47,214 million in 2025, with intermediate values of US$43,426 million in 2023 and US$45,735 million in 2024. Adjusted total capital also increased consistently, moving from US$68,159 million in 2022 to US$83,184 million in 2025, with intermediate values of US$72,490 million in 2023 and US$73,764 million in 2024. The larger absolute increase in capital compared to debt contributed to the overall decreasing trend in the adjusted debt-to-capital ratio.

Comparison to Reported Debt-to-Capital Ratio

The reported debt-to-capital ratio mirrored the trend of the adjusted ratio, starting at 0.65 in 2021 and decreasing to 0.59 in 2025, with fluctuations in between. The adjusted ratio consistently remained slightly lower than the reported ratio across all observed years, suggesting that the adjustments made to debt and capital resulted in a more conservative leverage assessment.

Year-over-Year Changes

The most significant year-over-year decrease in the adjusted debt-to-capital ratio occurred between 2021 and 2022, dropping from 0.63 to 0.60. The period between 2024 and 2025 also showed a notable decrease, from 0.62 to 0.57. The smallest change was observed between 2022 and 2023, remaining constant at 0.60.

In summary, the company demonstrated a generally decreasing trend in its adjusted debt-to-capital ratio over the five-year period, indicating improved financial leverage. This trend was driven by a greater increase in adjusted capital compared to adjusted debt. The adjustments applied to the initial figures resulted in a slightly more conservative assessment of the company’s debt position.

The financial leverage metrics demonstrate a fluctuating pattern over the five-year period. While reported financial leverage exhibits some volatility, the adjusted financial leverage consistently presents a lower level of risk, and shows a clear downward trend in the later years of the observed period.

Total Assets & Equity

Total assets experienced a slight decrease from 2021 to 2022, followed by consistent growth through 2025, reaching 104,816 US$ millions. Equity attributable to shareowners also generally increased, with a dip in 2024, ultimately reaching 32,169 US$ millions in 2025. The adjusted values for both assets and equity follow similar trends, though with minor differences in magnitude.

Reported Financial Leverage

Reported financial leverage decreased from 4.10 in 2021 to 3.85 in 2022, then continued to decline to 3.77 in 2023. An increase to 4.05 was observed in 2024, before decreasing again to 3.26 in 2025. This indicates some fluctuation in leverage as measured by the standard calculation.

Adjusted Financial Leverage

Adjusted financial leverage began at 3.55 in 2021 and decreased to 3.32 in 2022. It remained relatively stable at 3.33 in 2023, then increased to 3.56 in 2024. A notable decrease to 2.89 was observed in 2025. This suggests that adjustments to the asset and equity base result in a more conservative leverage position, and that the company has been actively reducing its adjusted leverage in the most recent year.

The difference between reported and adjusted financial leverage suggests that certain asset or equity items are being re-evaluated in the adjusted calculation. The consistent reduction in adjusted financial leverage from 2021 to 2025, particularly the decline in 2025, indicates a strengthening of the company’s financial position when considering these adjustments. The adjustments appear to be having a material impact on the overall leverage profile.

The adjusted net profit margin exhibited considerable fluctuation between 2021 and 2025. While net income attributable to shareowners and net operating revenues generally increased over the period, the adjusted net profit margin presented a more complex picture.

Overall Trend

The adjusted net profit margin began at 27.24% in 2021, decreased significantly to 20.12% in 2022, recovered to 23.98% in 2023, then declined sharply to 17.11% in 2024, before experiencing a substantial increase to 33.81% in 2025. This indicates a volatile performance in profitability when considering adjustments to net income.

2021-2022

A notable decrease in the adjusted net profit margin occurred between 2021 and 2022, falling from 27.24% to 20.12%. This decline, despite an increase in net operating revenues, suggests that adjustments to net income had a significant negative impact on profitability during this period. The adjusted consolidated net income also decreased from US$10,529 million to US$8,654 million.

2022-2023

The adjusted net profit margin showed improvement between 2022 and 2023, rising from 20.12% to 23.98%. This recovery coincided with an increase in both net operating revenues and adjusted consolidated net income, indicating a positive shift in underlying profitability.

2023-2024

A substantial decline in the adjusted net profit margin was observed from 2023 to 2024, decreasing from 23.98% to 17.11%. This decrease occurred despite a continued increase in net operating revenues. The adjusted consolidated net income decreased significantly from US$10,971 million to US$8,053 million, suggesting substantial negative adjustments to net income.

2024-2025

The adjusted net profit margin experienced a dramatic increase between 2024 and 2025, reaching 33.81%. This represents the highest level observed during the analyzed period and is associated with a significant increase in adjusted consolidated net income to US$16,210 million. The increase in net operating revenues was comparatively modest, indicating that the improved margin was primarily driven by adjustments to net income.

The considerable volatility in the adjusted net profit margin highlights the importance of understanding the nature of the adjustments being made to net income. Further investigation into these adjustments would be necessary to determine the underlying drivers of these fluctuations and assess the sustainability of the profitability improvements observed in 2025.

The period between 2021 and 2025 demonstrates fluctuating performance in key financial metrics. Net income attributable to shareowners generally increased over the five-year period, although with some intermediate declines. Equity attributable to shareowners also exhibited an overall upward trend, with a notable increase between 2024 and 2025. However, the adjusted figures reveal a different dynamic, particularly concerning return on equity.

Adjusted Return on Equity (ROE)

Adjusted ROE experienced considerable volatility during the analyzed timeframe. It began at 40.33% in 2021, decreased significantly to 31.41% in 2022, and then recovered to 37.75% in 2023. A further decline was observed in 2024, with adjusted ROE falling to 28.73%. A substantial increase occurred in 2025, reaching 45.07%. This suggests that changes in the adjusted net income and adjusted total equity had a significant impact on profitability as measured by this metric.

Relationship between Adjusted Net Income and Adjusted ROE

A comparison of adjusted net income and adjusted ROE reveals a strong correlation. The decrease in adjusted ROE in 2022 coincided with a decrease in adjusted consolidated net income. Similarly, the substantial increase in adjusted ROE in 2025 was driven by a significant rise in adjusted consolidated net income. This indicates that fluctuations in net income are a primary driver of changes in adjusted ROE.

Equity Trends and Adjusted ROE

While adjusted total equity generally increased over the period, its impact on adjusted ROE was less pronounced than that of adjusted net income. The decline in adjusted ROE in 2024 occurred despite a modest increase in adjusted total equity, suggesting that the decrease in adjusted net income was the dominant factor. The substantial increase in adjusted ROE in 2025 was supported by a larger increase in adjusted total equity, amplifying the effect of the increased net income.

In summary, the adjusted ROE demonstrates a pattern of fluctuation, heavily influenced by changes in adjusted net income. While equity levels generally increased, their impact on the adjusted ROE was secondary to the performance of net income. The significant increase in both adjusted net income and adjusted total equity in 2025 resulted in a substantial improvement in adjusted ROE.

The adjusted return on assets (ROA) exhibited fluctuating performance over the five-year period. While the reported ROA showed a generally stable trend, the adjusted ROA revealed more pronounced variations, suggesting the impact of specific adjustments made to net income and total assets.

Adjusted ROA Trend

The adjusted ROA began at 11.35% in 2021, decreased significantly to 9.45% in 2022, and then recovered to 11.35% in 2023. A subsequent decline to 8.07% occurred in 2024, followed by a substantial increase to 15.57% in 2025. This indicates considerable volatility in profitability relative to assets when considering the adjustments applied.

Net Income and Adjusted Net Income Comparison

The difference between reported net income and adjusted consolidated net income varied annually. The largest divergence occurred in 2022, where the adjusted net income was notably lower than the reported net income. Conversely, 2025 saw the most significant positive adjustment, resulting in a substantially higher adjusted net income compared to the reported figure. These adjustments appear to have a material impact on the ROA calculation.

Asset Adjustments

Adjusted total assets remained relatively close to reported total assets throughout the period. The adjustments to total assets were consistently downward, though the magnitude of these adjustments was not substantial relative to the overall asset base. The impact of these asset adjustments, in conjunction with net income adjustments, contributed to the observed fluctuations in adjusted ROA.

The substantial increase in adjusted ROA in 2025 warrants further investigation to understand the nature of the adjustments made to both net income and assets. The significant decrease in 2024 also merits attention, as it represents the lowest adjusted ROA value within the observed timeframe. Overall, the adjusted ROA provides a different perspective on the company’s profitability compared to the reported ROA, highlighting the importance of understanding the underlying adjustments.