Coca-Cola Co. (NYSE:KO)

Return on Assets (ROA)

The Return on Assets exhibited an overall increasing trend from 8.87% in 2020 to a peak of 10.97% in 2023, indicating enhanced efficiency in asset utilization over this period. Although there was a slight decline to 10.57% in 2024, the ROA remained above the levels observed in the earlier years, suggesting sustained operational effectiveness.

Financial Leverage

Financial leverage decreased steadily from a ratio of 4.52 in 2020 to 3.77 in 2023, reflecting a possible reduction in the use of debt relative to equity. However, in 2024, there was a reversal of this trend with leverage rising to 4.05, which may indicate a renewed reliance on debt financing or changes in capital structure strategy.

Return on Equity (ROE)

Return on Equity experienced fluctuations but maintained a generally high level, starting at 40.14% in 2020, reaching a low of 39.59% in 2022 before recovering to 42.77% in 2024. This pattern reflects the company’s ability to generate substantial returns for shareholders despite variations in leverage and asset returns.

Net Profit Margin

The net profit margin showed some fluctuation over the observed period. It increased from 23.47% in 2020 to a peak of 25.28% in 2021, followed by a decline to 22.19% in 2022. Subsequently, it experienced a mild recovery to 23.42% in 2023 but slightly decreased again to 22.59% in 2024. Overall, despite the variability, the margin remained above 22% throughout.

Asset Turnover

Asset turnover exhibited a generally positive trend, increasing steadily from 0.38 in 2020 to 0.47 by 2023 and maintaining that level into 2024. This indicates an improvement in the efficiency with which assets are being used to generate sales over the five-year span.

Financial Leverage

Financial leverage showed a declining trend from 4.52 in 2020 down to 3.77 in 2023, suggesting a reduction in reliance on debt or other liabilities during this period. However, there was a slight increase to 4.05 in 2024, indicating a modest uptick in leverage.

Return on Equity (ROE)

ROE followed a pattern somewhat correspondent with net profit margin trends but remained relatively high throughout, fluctuating from 40.14% in 2020 to a peak of 42.77% in 2024. A slight dip to 39.59% in 2022 was followed by a recovery in subsequent years, with 2024 showing the highest ROE in the period evaluated.

Tax Burden

The tax burden ratio remains relatively stable over the period, fluctuating slightly between 0.79 and 0.83. This indicates a consistent level of tax expenses relative to pre-tax earnings, with a minor increase observed in 2023 followed by a slight decrease in 2024.

Interest Burden

The interest burden ratio shows a general improvement from 0.87 in 2020 to 0.93 in 2022, indicating reduced interest expenses relative to earnings before interest and taxes during this period. However, it declines back to 0.89 in both 2023 and 2024, stabilizing at a level slightly better than at the start of the period.

EBIT Margin

The EBIT margin demonstrates volatility, peaking at 36.19% in 2021 before dropping significantly to 29.16% in 2022. It then recovers moderately to 31.67% in 2023 and slightly declines to 31.29% in 2024. This pattern reflects fluctuations in operating profitability with a notable dip followed by partial recovery.

Asset Turnover

Asset turnover shows a steady upward trend from 0.38 in 2020 to 0.47 in 2023, maintaining that level in 2024. This indicates increasing efficiency in the use of assets to generate sales over the analyzed period.

Financial Leverage

Financial leverage declines consistently from 4.52 in 2020 to 3.77 in 2023, suggesting a reduction in reliance on debt or increased equity financing. Nevertheless, there is a slight increase to 4.05 in 2024, implying a modest rise in leverage towards the end of the period.

Return on Equity (ROE)

The ROE remains strong throughout, with a modest peak at 42.48% in 2021, then dipping to 39.59% in 2022. It recovers to 41.3% in 2023 and further to 42.77% in 2024, reflecting overall strong profitability for shareholders with some variation but no long-term decline.

The financial ratios over the five-year period demonstrate various trends regarding profitability and asset efficiency.

Net Profit Margin

The net profit margin experienced moderate fluctuations. It increased from 23.47% in 2020 to a peak of 25.28% in 2021, then declined to 22.19% in 2022. Subsequently, it rose slightly to 23.42% in 2023 before slightly dropping again to 22.59% in 2024. Overall, the margin remained above 22% throughout the entire period, indicating a relatively stable capacity to convert revenue into profit despite some year-to-year variability.

Asset Turnover

Asset turnover exhibited a consistent upward trend from 0.38 in 2020 to 0.47 in 2023, maintaining that level in 2024 as well. This increase indicates an improvement in the efficiency with which the company utilizes its assets to generate sales, reflecting progressively better asset management or growth in sales relative to asset base.

Return on Assets (ROA)

Return on assets showed an overall positive trajectory with minor fluctuations. Starting at 8.87% in 2020, ROA rose to 10.36% in 2021 and was relatively stable in 2022 at 10.29%. It then peaked at 10.97% in 2023 before slightly decreasing to 10.57% in 2024. The generally increasing trend suggests improving overall profitability relative to assets, aligned with gains in asset turnover and fluctuating net profit margins.

The financial data reveals several notable trends over the examined periods.

Tax Burden

The tax burden ratio demonstrates moderate fluctuations, starting at 0.80 in 2020, slightly decreasing to 0.79 in 2021, increasing to a peak of 0.83 in 2023, before declining to 0.81 in 2024. This indicates small variations in the company's effective tax rate, with a general tendency to remain relatively stable around the low 0.80s mark.

Interest Burden

The interest burden ratio shows an overall improvement from 0.87 in 2020 to 0.93 in 2022, reflecting a positive trend with a reduction in interest expenses relative to earnings before interest and taxes. However, it reverted to 0.89 in both 2023 and 2024, suggesting stabilization after the improvement phase.

EBIT Margin

The EBIT margin displays significant variability, reaching a high of 36.19% in 2021 before declining sharply to 29.16% in 2022. It then partially recovers to around 31.5% in the subsequent years (31.67% in 2023 and 31.29% in 2024). This pattern suggests operational profitability experienced a notable dip in 2022 followed by moderate recovery.

Asset Turnover

This ratio indicates a consistent upward trend, increasing steadily from 0.38 in 2020 to 0.47 in both 2023 and 2024. The improvement signifies growing efficiency in utilizing assets to generate revenue.

Return on Assets (ROA)

The ROA remains relatively stable with slight fluctuations, improving from 8.87% in 2020 to a peak of 10.97% in 2023, before a modest decline to 10.57% in 2024. This reflects generally stable profitability relative to total assets, with a peak in 2023 coinciding with improvements in operational efficiency and tax burden ratios.

Tax Burden

The tax burden ratio shows a generally stable trend over the observed period, with slight fluctuations between 0.79 and 0.83. It decreased marginally from 0.80 in 2020 to 0.79 in 2021, then increased to a peak of 0.83 in 2023 before slightly decreasing to 0.81 in 2024. This indicates minor variations in the proportion of earnings retained after tax, suggesting relative consistency in tax impacts.

Interest Burden

The interest burden ratio improved from 0.87 in 2020 to a higher level of 0.89 in 2021, reaching a peak of 0.93 in 2022. Afterward, it declined back to 0.89 in both 2023 and 2024. The peak value in 2022 may indicate a period of reduced interest expense relative to earnings before interest and taxes, while the subsequent stabilization suggests a return to previous conditions.

EBIT Margin

The EBIT margin exhibited a notable downward trend overall. Starting at 33.82% in 2020, it increased to 36.19% in 2021, the highest point within the dataset. This was followed by a sharp decline to 29.16% in 2022, with partial recovery observed in 2023 (31.67%) and 2024 (31.29%). The decline after 2021 indicates that operating profitability weakened significantly but regained some strength in the latter years, remaining below the 2020 and 2021 levels.

Net Profit Margin

Net profit margin trends broadly mirror the EBIT margin but show less volatility. The margin rose from 23.47% in 2020 to 25.28% in 2021, then dropped to 22.19% in 2022. It partially recovered to 23.42% in 2023, followed by a slight decrease to 22.59% in 2024. This pattern suggests fluctuations in overall profitability after all expenses and taxes, with a peak in 2021 and softer profitability in subsequent years, reflecting challenges in maintaining profit levels.