Coca-Cola Co. (NYSE:KO)

The analysis of the quarterly financial indicators reveals several notable trends across the observed periods.

Return on Assets (ROA)

ROA values start appearing from December 31, 2020, with an initial figure of 8.87%. Subsequently, there is a general upward trajectory reaching a peak of 11.04% on December 31, 2023. Following this peak, the ROA experiences slight fluctuations but remains relatively stable, hovering close to or above 10%. The final recorded value on December 27, 2025, shows a strong recovery to 11.68%, indicating improved efficiency in asset utilization over time.

Financial Leverage

Financial leverage ratios demonstrate a clear declining trend from March 27, 2020 (5.18) to the end of 2023 (around 3.7-3.8 range). This suggests a progressive reduction in the use of debt or liabilities relative to equity. However, from 2024 onward, leverage ratios appear to stabilize within a narrow range of approximately 3.65 to 4.05. This normalization may indicate a strategic balance between leverage and risk at these lower levels compared to earlier periods.

Return on Equity (ROE)

ROE shows considerable strength throughout the observed periods, with values consistently above 35%. Starting from 40.14% in April 2, 2021, the metric exhibits volatility but maintains an upward bias, peaking at 43.52% on December 31, 2022. Post-peak, ROE slightly fluctuates but mostly remains between 39% and 42%, reflecting sustained profitability relative to shareholders’ equity. The final periods depict a stabilizing effect around 41–42%, indicating robust returns to equity holders.

In summary, the company shows steady improvement in asset efficiency as reflected by rising ROA, a disciplined approach in managing leverage by reducing financial risk, and consistently strong equity returns indicative of effective management and profitability. The combination of these trends suggests a balanced financial strategy focused on sustainable growth and risk mitigation over the analyzed timeframe.

Net Profit Margin

The net profit margin exhibits a relatively stable pattern from the first available data point in the quarter ending April 2, 2021, through June 27, 2025. Initial values start around 23.47%, dip slightly in the subsequent quarters to around 21.59%, and thereafter maintain in a range generally between 22% and 26%. There is a mild upward trend towards the later periods, with margins peaking at 25.89% in the quarter ending June 27, 2025, indicating a modest improvement in profitability relative to sales over time.

Asset Turnover

The asset turnover ratio shows a gradual increase and slight fluctuations across the periods from April 2, 2021, to June 27, 2025. Beginning at approximately 0.38, it experiences steady growth, reaching as high as 0.47 in multiple quarters between March 29, 2024, and June 27, 2025. This indicates a gradual improvement in the efficiency with which the company utilizes its assets to generate sales.

Financial Leverage

The financial leverage ratio demonstrates a declining trend over the observed periods. Starting from a relatively high point of 5.18 in March 27, 2020, and 5.42 in June 26, 2020, it consistently decreases to a lower range around 3.65 to 4.05 from early 2022 onwards, with minor fluctuations. By June 27, 2025, the ratio stands near 3.65. This suggests the company has been reducing its reliance on debt financing or lowering overall leverage over time, potentially improving its financial risk profile.

Return on Equity (ROE)

ROE is consistently strong and relatively stable throughout the available timeframe, showing values generally in the range of 35% to 43%. It starts around 40.14% in April 2, 2021, experiences slight declines and recoveries but remains above 39% for most periods following 2021. The highest ROE observed is 43.52% in December 31, 2022, followed by a modest plateau around the low 40% range thereafter. The resilience of this return indicates effective management of shareholder equity, balancing profitability and leverage optimally.

Overall Observations

Over the course of the reported periods, the company shows a trend toward enhanced operational efficiency and risk management, as reflected by the improving asset turnover and decreasing financial leverage. Profitability, as measured by net profit margin, remains stable with slight improvements towards the end of the period. The strong and consistent ROE further corroborates the company's sustained ability to generate substantial returns for shareholders despite the changes in leverage and asset usage. These trends suggest a solid financial performance with a focus on optimizing capital structure and operational productivity.

Tax Burden

The tax burden ratio exhibits a generally stable pattern over the periods from April 2020 onward. Beginning at 0.80, it slightly decreases to a range around 0.74-0.75 in late 2020, before rising steadily to stabilize between 0.81 and 0.84 from 2022 through mid-2025. This indicates consistent effective tax rates with minor fluctuations over the timeframe.

Interest Burden

This ratio shows improvement from 0.87 in early 2020 to a peak around 0.94 by the end of 2021, reflecting a reduction in interest expense relative to operating income. Thereafter, it gradually declines to remain stable in the 0.89-0.90 range through mid-2025, suggesting effective management of interest costs while maintaining financial stability.

EBIT Margin

The EBIT margin displays significant variability. Initially, margins hover in the low to mid-30% range in 2020-2021, peaking at nearly 36% in early 2021. A notable decline occurs through late 2021 and 2022, dropping below 30% at one point, before gradually recovering to the low 30% range in 2023 and beyond. A sharp increase is observed at the end of 2025 with a rebound to 35.5%, indicating potential improved operating profitability after a period of compression.

Asset Turnover

Asset turnover steadily increases from 0.38 in early 2020 up to approximately 0.46 by the end of 2021, demonstrating enhanced efficiency in asset utilization. This ratio remains fairly stable around 0.44 to 0.47 through 2023 and 2024, with a slight dip toward mid-2025. Overall, the trend reflects consistent asset productivity supporting revenue generation.

Financial Leverage

Financial leverage shows a marked decrease from a high level above 5.0 in early 2020, trending downward to about 3.7-3.9 during 2023-2025. This reduction indicates deleveraging efforts, resulting in a lower dependency on debt financing and a potentially more conservative capital structure over time.

Return on Equity (ROE)

ROE experiences fluctuations consistent with changes in other profitability measures. After a drop from approximately 40% in early 2020 to a low of around 35.5% in mid-2020, it recovers and remains mostly in the 39-43% range during 2021-2025. This sustained high level of ROE, coupled with reduced financial leverage, points to improved operational effectiveness and prudent capital management.

Net Profit Margin

The net profit margin showed a generally stable pattern from April 2020 onward, consistently remaining above 20%. Beginning at 23.47% in March 2020, it experienced minor fluctuations but stayed within a relatively narrow range between 21.59% and 25.89%. Notable peaks occurred around April 2022 (25.28%) and June 2025 (25.89%), indicating periods of increased profitability. In contrast, dips were observed toward late 2023 and early 2024, where the margin decreased closer to the 22% range. Overall, the margin demonstrates consistent profitability with slight variability.

Asset Turnover

The asset turnover ratio displayed a gradual upward trend over the observed periods. Starting at 0.38, it experienced steady incremental increases, reaching a peak of approximately 0.47 in early 2024 and mid-2025. This trend suggests improved efficiency in using assets to generate revenue. Although there were small decreases or plateaus at certain points, the overall trajectory indicates modest but consistent gains in asset utilization efficiency.

Return on Assets (ROA)

Return on assets showed an overall positive trend with some variability. Beginning at 8.87% in March 2020, it rose steadily to reach over 11% at several points, notably in December 2023 and June 2025. Decreases occurred sporadically, such as around mid-2020 and early 2024, where ROA dropped to just below 10%. The pattern indicates improving returns on asset use, with occasional periods of lower performance. The upward movement aligns with increases in asset turnover and stable net margins, suggesting effective asset management contributing to higher profitability.

The financial ratios over the observed quarters indicate several notable trends regarding profitability, efficiency, and financial burden.

Tax Burden

The tax burden ratio shows a generally stable pattern with minor fluctuations. Starting around 0.80 in the earliest reported quarter and decreasing slightly to approximately 0.74 by late 2020, it then gradually increases and stabilizes near 0.81 to 0.84 throughout 2021 to mid-2024, ending consistently at 0.81 by mid-2025. This suggests a relatively consistent effective tax rate impacting net income over the periods.

Interest Burden

The interest burden ratio demonstrates an increasing trend from 0.87 at the end of 2020 to a peak near 0.94 in 2022, followed by a slight decrease and stabilization around 0.89-0.90 from late 2022 through mid-2025. This indicates a variation in interest expenses relative to earnings before interest and taxes, with some improvement in reducing interest impact on profitability after 2022.

EBIT Margin

The EBIT margin shows notable volatility. Starting in the mid-30% range at the end of 2020, it peaks around 36.19% in early 2021, then declines significantly to a low near 29.16% by late 2022. Subsequently, the margin recovers steadily to about 31% in the following quarters, with a strong increase observed toward the end of the period, reaching 35.5% by the end of 2025. This pattern reflects variations in operating profitability possibly influenced by cost management and revenue changes.

Asset Turnover

The asset turnover ratio exhibits a gradual upward trend, rising from 0.38 at the end of 2020 to a peak around 0.47 in late 2023 and mid-2024, followed by slight fluctuations staying mostly between 0.44 and 0.47. This indicates improving efficiency in utilizing assets to generate sales over the observed periods, suggesting enhanced operational performance or business growth efficiency.

Return on Assets (ROA)

The ROA percentage reflects consistent improvement from 8.87% at the end of 2020, rising steadily to a peak of 11.04% in mid-2023. Although minor fluctuations appear thereafter, the ROA remains above 10% for most of the observed quarters, finishing at a notably high 11.68% by the end of 2025. This upward trend signals enhanced overall profitability relative to the company’s asset base, showing improved effectiveness in asset utilization and operational profitability.

In summary, the data reveals stable tax and interest burdens with some improvements post-2022. Operating profit margins experienced a dip in late 2022 but showed a recovering and strengthening trajectory by 2025. Asset turnover improved steadily, supporting better utilization of resources. Return on assets consistently increased, underscoring enhanced profitability and operational efficiency over the observed time frame.

Tax Burden

The tax burden ratio begins at 0.80 in the fourth quarter of 2020 and exhibits a gradual decline to 0.74 by the third quarter of 2021. Following this, the ratio increases steadily, reaching a peak of 0.84 in the fourth quarter of 2023. Subsequently, it stabilizes around 0.81 to 0.82 towards the middle of 2025, indicating relative consistency in the effective tax rate after the initial fluctuation.

Interest Burden

The interest burden ratio shows a moderate decrease from 0.87 in the fourth quarter of 2020 to 0.83 in the third quarter of 2021, before increasing again to 0.94 by the fourth quarter of 2021. From 2022 onward, it remains consistently high, fluctuating narrowly between 0.89 and 0.94. In the last periods, the ratio stabilizes near 0.89 to 0.90, reflecting steady interest expense management relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin experienced notable variability. It increased from 33.82% in Q4 2020 to a peak of 36.19% in Q2 2021, then declined sharply to around 29.16%-30.35% during 2022. From 2023 onwards, the margin showed a gradual recovery, rising to 31.81% by Q3 2024 and reaching 35.5% by the end of 2024. This pattern suggests some operational challenges or cost adjustments during 2022, followed by renewed improvement in profitability.

Net Profit Margin

The net profit margin follows a similar trajectory to the EBIT margin but with less volatility. It decreased from 23.47% in Q4 2020 to approximately 21.59%-22.19% in 2020-2021. Thereafter, it improved consistently, peaking at 25.69% in Q2 2022. The margin slightly declined and then stabilized around 22.5%-23.9% throughout 2023 and early 2024, before increasing again to 25.89% by Q2 2025. This steady margin trend reflects sustained profitability despite earlier pressures.