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.

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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 1.06 1.17 1.09 1.01 1.14
Current Ratio, Industry
Consumer Goods 1.10 1.14 1.12 1.10 1.14

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.

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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 0.82 0.92 0.78 0.71 0.83
Quick Ratio, Industry
Consumer Goods 0.76 0.79 0.76 0.76 0.80

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.

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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 0.60 0.66 0.52 0.43 0.51
Cash Ratio, Industry
Consumer Goods 0.38 0.39 0.38 0.40 0.41

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.

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