Coca-Cola Co. (NYSE:KO)

Debt to equity

The debt to equity ratio demonstrated a declining trend from 2.22 in 2020 to 1.62 in 2022 and remained stable through 2023, before increasing slightly to 1.79 in 2024. This indicates that the company has generally been reducing its reliance on debt relative to equity, with a minor reversal in the most recent period.

Debt to equity (including operating lease liability)

When including operating lease liabilities, a similar downward trend from 2.3 in 2020 to 1.68 in 2022 is observed, followed by stability in 2023 and a moderate rise to 1.84 in 2024, mirroring the pattern of the standard debt to equity ratio.

Debt to capital

The debt to capital ratio decreased from 0.69 in 2020 to a low of 0.62 in 2022 and 2023, before slightly increasing to 0.64 in 2024. This reflects a cautious approach to financing with debt, maintaining a reduced proportion of debt in the capital structure.

Debt to capital (including operating lease liability)

The inclusion of operating lease liabilities shows a similar pattern, with a decline from 0.7 in 2020 to 0.63 in 2022 and 2023, then a marginal increase to 0.65 in 2024. This suggests consistent treatment of lease obligations alongside other debt.

Debt to assets

The ratio of debt to assets has decreased from 0.49 in 2020 to 0.42 in 2022, with a slight increase to 0.44 by 2024. This indicates that the company's asset base is becoming less encumbered by debt over time, although a minor uptick is evident in the latest year.

Debt to assets (including operating lease liability)

Considering operating lease liabilities, the debt to assets ratio declines from 0.51 in 2020 to 0.44 in 2022 and 2023, followed by a small increase to 0.45 in 2024. The trend corroborates the general reduction in debt relative to assets, with lease obligations similarly factored in.

Financial leverage

Financial leverage decreased steadily from 4.52 in 2020 to 3.77 in 2023, indicating a reduction in the use of debt financing relative to equity. However, in 2024, the ratio increased to 4.05, suggesting a modest increase in leverage.

Interest coverage

The interest coverage ratio improved substantially from 7.78 in 2020 to a peak of 14.25 in 2022, indicating increased ability to meet interest expenses from operating earnings. Afterwards, it declined to 9.48 in 2023 and further to 8.9 in 2024, though still remaining higher than in 2020 and 2021.

Fixed charge coverage

Fixed charge coverage followed a similar pattern to interest coverage, rising from 6.45 in 2020 to 10.14 in 2022, then decreasing to 7.73 in 2023 and slightly to 7.48 in 2024. This implies a noticeable improvement in the ability to cover fixed charges in the earlier years, followed by diminished but still improved coverage relative to 2020.

Total debt

The total debt shows a fluctuating trend over the five-year period. It decreased from $42,793 million in 2020 to $39,149 million in 2022, followed by an increase to $42,064 million in 2023 and further to $44,522 million in 2024. This suggests a period of debt reduction initially, then a renewed increase in leverage in the last two years.

Equity attributable to shareowners

Equity increased steadily from $19,299 million in 2020 to $25,941 million in 2023, before experiencing a slight decline to $24,856 million in 2024. Overall, the equity base strengthened over the period, indicating growth in retained earnings or capital contributions, with a minor contraction in the final year.

Debt to equity ratio

The debt to equity ratio improved significantly from 2.22 in 2020 to 1.62 in 2022 and remained stable at 1.62 in 2023, reflecting a reduction in financial leverage relative to equity. However, the ratio increased again to 1.79 in 2024, corresponding to the rise in total debt and slight decline in equity, signaling a modest increase in leverage relative to the prior two years.

Summary of financial structure trends

Over the observed period, the company initially focused on debt reduction and equity growth, resulting in improved leverage ratios. In the later years, total debt increased while equity slightly decreased, causing a moderate rise in the debt to equity ratio. This pattern suggests a shift toward increased borrowing or capital restructuring in recent years after a phase of deleveraging and equity expansion.

Total Debt (including operating lease liability)

The total debt demonstrated a declining trend from 44,415 million USD in 2020 to 40,603 million USD in 2022, indicating a reduction in leverage during this period. However, from 2022 onwards, debt levels increased again, reaching 45,735 million USD by the end of 2024, which suggests a renewed use of debt financing or increased obligations.

Equity Attributable to Shareowners

Equity attributable to shareowners consistently increased from 19,299 million USD in 2020 to a peak of 25,941 million USD in 2023, reflecting strengthening shareholder value or retained earnings accumulation. In 2024, equity slightly decreased to 24,856 million USD, showing a modest reduction but remaining significantly higher than the 2020 baseline.

Debt to Equity Ratio (Including Operating Lease Liability)

The debt to equity ratio showed a steady decline from 2.3 in 2020 to 1.67 in 2023, signaling an improvement in the company’s capital structure with relatively lower reliance on debt compared to equity. This trend reversed slightly in 2024, with the ratio increasing to 1.84, indicating a moderate uptick in leverage relative to equity.

Overall Analysis

Over the five-year period, the company initially reduced its total debt while simultaneously increasing equity, resulting in a lower debt to equity ratio and an improved financial structure. However, the latter part of the period reveals a trend toward increased leverage driven by rising debt levels and a slight decline in equity. This shift may indicate strategic financing decisions or external factors influencing capital structure. The overall trends suggest a cautious but adaptive approach to managing debt and equity balances over time.

Total Debt

The total debt exhibited a slight decline from 42,793 million US dollars at the end of 2020 to 39,149 million US dollars in 2022. However, starting in 2023, there was an increase in total debt, reaching 44,522 million US dollars by the end of 2024. This indicates an initial effort to reduce debt followed by a reversal towards higher borrowing in the more recent years.

Total Capital

Total capital demonstrated an overall upward trend, rising from 62,092 million US dollars in 2020 to 69,378 million US dollars in 2024. Despite a slight dip in 2022 to 63,254 million US dollars, total capital increased notably in the subsequent years, reflecting potential growth in the company's financing base and possibly enhanced equity or retained earnings.

Debt to Capital Ratio

The debt to capital ratio decreased from 0.69 in 2020 to 0.62 in 2022 and 2023, indicating a reduction in the proportion of debt relative to total capital during that period. In 2024, the ratio rose slightly to 0.64, aligning with the increase in total debt. Overall, the ratio remained relatively stable but showed a modest improvement by 2023 before a small reversal in 2024.

The data reveals several notable trends in the financial structure over the five-year period ending December 31, 2024.

Total Debt (including operating lease liability)

This metric initially declined from US$44,415 million in 2020 to US$40,603 million in 2022, indicating a reduction in leverage or debt repayment during this time. However, from 2022 onward, total debt increased steadily to US$45,735 million by the end of 2024, surpassing the 2020 level. The fluctuations suggest a strategic adjustment in debt management, possibly reflecting changes in financing or investment activities.

Total Capital (including operating lease liability)

Total capital grew from US$63,714 million in 2020 to US$67,231 million in 2021, followed by a slight decline to US$64,708 million in 2022. After 2022, capital rose consistently, reaching US$70,591 million by 2024. The overall trend indicates an expansion in the capital base over the five years, with minor variability in the middle years.

Debt to Capital Ratio (including operating lease liability)

This ratio decreased significantly from 0.70 in 2020 to 0.63 in 2022, reflecting a reduced proportion of debt relative to total capital, which typically suggests a stronger equity base or lower leverage risk. From 2022 onwards, the ratio stabilized around 0.63 to 0.65, with a slight uptick in 2024 to 0.65. The stability in this ratio over the last two years indicates a consistent capital structure with a moderate reliance on debt financing.

Overall, the financial data exhibits a cycle of debt reduction followed by incremental increases, accompanied by a growing capital base. The debt to capital ratio's decline and subsequent stabilization suggest a strategic balance between leveraging and maintaining capital strength. This pattern may reflect the company's responses to market conditions, investment opportunities, or corporate financing policies during the period under review.

Total debt

The total debt of the company experienced a slight decline from 42,793 million US dollars at the end of 2020 to 39,149 million US dollars by the end of 2022. However, starting in 2023, the total debt began to increase again, reaching 44,522 million US dollars by the end of 2024. This indicates a non-linear debt trajectory with a temporary reduction followed by renewed borrowing or debt accumulation.

Total assets

Total assets demonstrated a consistent upward trend over the five-year period. From 87,296 million US dollars in 2020, assets increased steadily each year, reaching 100,549 million US dollars at the end of 2024. This gradual asset growth suggests ongoing investment or accumulation of resources that enhance the company's asset base.

Debt to assets ratio

The debt to assets ratio declined from 0.49 in 2020 to a low of 0.42 in 2022, indicating a reduction in leverage relative to the asset base during that period. From 2023 onwards, the ratio increased slightly to 0.44 by 2024. Despite the recent uptick, the ratio remained below the initial 2020 level, signaling an overall improvement in the company's financial leverage position over the five years, albeit with some increased leverage in the latest years.

Summary of financial leverage and asset growth

The data reveal a pattern where the company reduced its relative debt burden until 2022 while simultaneously growing its asset base. Post-2022, there is a gradual increase in total debt and a slight rise in the debt to assets ratio, although the company maintains a more conservative leverage position compared to 2020. This may reflect strategic financial management balancing debt use with asset expansion to support growth or other corporate objectives.

The financial data reveals several noteworthy trends over the five-year period.

Total debt (including operating lease liability)

The total debt shows a declining trend from 2020 to 2022, dropping from $44,415 million to $40,603 million. However, the following years indicate a reversal of this trend, with total debt increasing to $43,426 million in 2023 and further to $45,735 million in 2024. This suggests that after initial deleveraging, the company began to increase borrowing or lease liabilities again in the most recent years.

Total assets

Total assets demonstrate a consistent upward trend throughout the entire period. Beginning at $87,296 million in 2020, the asset base steadily grows each year, reaching $100,549 million by 2024. Such growth implies ongoing investment and asset accumulation, potentially reflecting business expansion or acquisitions.

Debt to assets ratio (including operating lease liability)

The debt to assets ratio declines from 0.51 in 2020 to 0.44 in 2022, indicating improved leverage and possibly stronger financial stability in the earlier years. In 2023 and 2024, the ratio slightly increases to 0.44 and 0.45 respectively, aligning with the uptick in total debt. Overall, this ratio remains below the initial 2020 level, suggesting a moderate improvement in capital structure despite recent increases in debt.

In summary, the data indicates a phase of debt reduction coupled with steady asset growth during the early years, followed by a recent increase in debt while assets continue to expand. The company appears to maintain a relatively balanced leverage position, with the debt to asset ratio remaining fairly stable in the latter part of the period.

Total assets

Total assets showed a consistent upward trend from 2020 to 2024. Beginning at 87,296 million US dollars in 2020, the assets increased steadily each year, reaching 100,549 million US dollars by the end of 2024. This reflects a sustained growth in asset base over the five-year period.

Equity attributable to shareowners of The Coca-Cola Company

Equity also demonstrated an overall increase from 19,299 million US dollars in 2020 to a peak of 25,941 million US dollars in 2023. However, in 2024, equity slightly declined to 24,856 million US dollars. This suggests general growth in shareholders' equity with some minor contraction in the most recent year.

Financial leverage

The financial leverage ratio decreased from 4.52 in 2020 to 3.77 in 2023, indicating a gradual reduction in leverage and potentially lower reliance on debt financing. However, in 2024, the ratio increased again to 4.05, pointing to a modest rise in financial leverage ratio after several years of decline.

Earnings before interest and tax (EBIT)

The EBIT shows an overall upward trend from 2020 to 2024. It increased significantly from 11,186 million in 2020 to 14,022 million in 2021, followed by a decline to 12,568 million in 2022. Subsequently, there was a recovery with growth to 14,479 million in 2023 and a smaller increase to 14,742 million in 2024. This indicates a generally improving operating performance with some volatility in 2022.

Interest expense

The interest expense fluctuates across the years without a consistent trend. It rose from 1,437 million in 2020 to 1,597 million in 2021, then dropped sharply to 882 million in 2022, before rising again to 1,527 million in 2023 and 1,656 million in 2024. These variations could reflect changes in debt levels, refinancing activities, or interest rates impacting borrowing costs.

Interest coverage ratio

The interest coverage ratio, which measures the ability to cover interest expenses with EBIT, improved markedly from 7.78 in 2020 to a peak of 14.25 in 2022. After this peak, it declined to 9.48 in 2023 and further to 8.9 in 2024. This pattern suggests a stronger capacity to meet interest obligations in 2022, likely due to a combination of decreased interest expense and a still solid EBIT, with a relative weakening in subsequent years caused by rising interest expenses and moderated EBIT growth.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibited an overall upward trend from 2020 to 2024. Starting at 11,539 million US dollars in 2020, the figure increased significantly to 14,364 million in 2021. Despite a decline to 12,965 million in 2022, earnings recovered and continued to grow, reaching 14,876 million in 2023 and further rising to 15,104 million in 2024. This pattern indicates a generally positive growth trajectory with a notable dip in 2022.

Fixed charges

Fixed charges showed some fluctuations during the period. Beginning at 1,790 million US dollars in 2020, these charges increased to 1,939 million in 2021 but then decreased markedly to 1,279 million in 2022. Subsequently, fixed charges rose again to 1,924 million in 2023 and 2,018 million in 2024. This irregular pattern indicates some variability in fixed financial obligations.

Fixed charge coverage ratio

The fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings, improved from 6.45 in 2020 to a peak of 10.14 in 2022, reflecting a strong capacity to meet fixed obligations that year. However, the ratio declined to 7.73 in 2023 and further to 7.48 in 2024, although it remained above the 2020 level. This suggests that while coverage remains adequate, there was a decrease in safety margin following the 2022 peak, possibly due to the increase in fixed charges and the dip in earnings in that year.