Liquidity Analysis
Difficulty level: Basic
Liquidity ratios measure the company's ability to meet its short-term obligations.
Ratios (Summary)
Coca-Cola Co., liquidity ratios
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.02 | 1.13 | 1.09 | 1.05 | 1.17 | |
| Quick ratio | 0.81 | 0.90 | 0.77 | 0.78 | 0.85 | |
| Cash ratio | 0.67 | 0.73 | 0.59 | 0.58 | 0.61 |
Source: Based on data from Coca-Cola Co. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Coca-Cola Co.'s current ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Coca-Cola Co.'s quick ratio improved from 2012 to 2013 but then slightly deteriorated from 2013 to 2014 not reaching 2012 level. |
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Coca-Cola Co.'s cash ratio improved from 2012 to 2013 but then slightly deteriorated from 2013 to 2014. |
Current Ratio
Coca-Cola Co., current ratio calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Current assets | 32,986 | 31,304 | 30,328 | 25,497 | 21,579 | |
| Current liabilities | 32,374 | 27,811 | 27,821 | 24,283 | 18,508 | |
| Ratio | ||||||
| Current ratio1 | 1.02 | 1.13 | 1.09 | 1.05 | 1.17 | |
| Benchmarks | ||||||
| Current Ratio, Competitors | ||||||
| PepsiCo Inc. | 1.14 | 1.24 | 1.10 | 0.96 | 1.11 | |
| Current Ratio, Sector | ||||||
| Soft Drinks | – | 1.17 | 1.09 | 1.01 | 1.14 | |
| Current Ratio, Industry | ||||||
| Consumer Goods | – | 1.15 | 1.14 | 1.12 | 1.16 | |
Source: Based on data from Coca-Cola Co. Annual Reports
2014 Calculations
1 Current ratio = Current assets ÷ Current liabilities
= 32,986 ÷ 32,374 = 1.02
| Ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Coca-Cola Co.'s current ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Quick Ratio
Coca-Cola Co., quick ratio calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Cash and cash equivalents | 8,958 | 10,414 | 8,442 | 12,803 | 8,517 | |
| Short-term investments | 9,052 | 6,707 | 5,017 | 1,088 | 2,682 | |
| Marketable securities | 3,665 | 3,147 | 3,092 | 144 | 138 | |
| Trade accounts receivable, less allowances | 4,466 | 4,873 | 4,759 | 4,920 | 4,430 | |
| Total quick assets | 26,141 | 25,141 | 21,310 | 18,955 | 15,767 | |
| Current liabilities | 32,374 | 27,811 | 27,821 | 24,283 | 18,508 | |
| Ratio | ||||||
| Quick ratio1 | 0.81 | 0.90 | 0.77 | 0.78 | 0.85 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors | ||||||
| PepsiCo Inc. | 0.85 | 0.93 | 0.80 | 0.62 | 0.80 | |
| Quick Ratio, Sector | ||||||
| Soft Drinks | – | 0.92 | 0.78 | 0.71 | 0.83 | |
| Quick Ratio, Industry | ||||||
| Consumer Goods | – | 0.80 | 0.77 | 0.78 | 0.81 | |
Source: Based on data from Coca-Cola Co. Annual Reports
2014 Calculations
1 Quick ratio = Total quick assets ÷ Current liabilities
= 26,141 ÷ 32,374 = 0.81
| Ratio | Description | The company |
|---|---|---|
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Coca-Cola Co.'s quick ratio improved from 2012 to 2013 but then slightly deteriorated from 2013 to 2014 not reaching 2012 level. |
Cash Ratio
Coca-Cola Co., cash ratio calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Cash and cash equivalents | 8,958 | 10,414 | 8,442 | 12,803 | 8,517 | |
| Short-term investments | 9,052 | 6,707 | 5,017 | 1,088 | 2,682 | |
| Marketable securities | 3,665 | 3,147 | 3,092 | 144 | 138 | |
| Total cash assets | 21,675 | 20,268 | 16,551 | 14,035 | 11,337 | |
| Current liabilities | 32,374 | 27,811 | 27,821 | 24,283 | 18,508 | |
| Ratio | ||||||
| Cash ratio1 | 0.67 | 0.73 | 0.59 | 0.58 | 0.61 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors | ||||||
| PepsiCo Inc. | 0.48 | 0.54 | 0.39 | 0.24 | 0.40 | |
| Cash Ratio, Sector | ||||||
| Soft Drinks | – | 0.66 | 0.52 | 0.43 | 0.51 | |
| Cash Ratio, Industry | ||||||
| Consumer Goods | – | 0.38 | 0.37 | 0.39 | 0.40 | |
Source: Based on data from Coca-Cola Co. Annual Reports
2014 Calculations
1 Cash ratio = Total cash assets ÷ Current liabilities
= 21,675 ÷ 32,374 = 0.67
| Ratio | Description | The company |
|---|---|---|
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Coca-Cola Co.'s cash ratio improved from 2012 to 2013 but then slightly deteriorated from 2013 to 2014. |