Microsoft Excel LibreOffice Calc

Profitability Analysis

Difficulty: Beginner

Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).


Ratios (Summary)

Coca-Cola Co., profitability ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Return on Sales
Gross profit margin 62.56% 60.67% 60.53% 61.11% 60.68%
Operating profit margin 21.18% 20.61% 19.70% 21.11% 21.83%
Net profit margin 3.52% 15.59% 16.60% 15.43% 18.32%
Return on Investment
Return on equity (ROE) 7.31% 28.30% 28.77% 23.41% 25.88%
Return on assets (ROA) 1.42% 7.48% 8.16% 7.71% 9.53%

Source: Based on data from Coca-Cola Co. Annual Reports

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Coca-Cola Co.'s gross profit margin improved from 2015 to 2016 and from 2016 to 2017.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Coca-Cola Co.'s operating profit margin improved from 2015 to 2016 and from 2016 to 2017.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Coca-Cola Co.'s net profit margin deteriorated from 2015 to 2016 and from 2016 to 2017.
ROE A profitability ratio calculated as net income divided by shareholders' equity. Coca-Cola Co.'s ROE deteriorated from 2015 to 2016 and from 2016 to 2017.
ROA A profitability ratio calculated as net income divided by total assets. Coca-Cola Co.'s ROA deteriorated from 2015 to 2016 and from 2016 to 2017.

Gross Profit Margin

Coca-Cola Co., gross profit margin calculation

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Gross profit 22,154  25,398  26,812  28,109  28,433 
Net operating revenues 35,410  41,863  44,294  45,998  46,854 
Ratio
Gross profit margin1 62.56% 60.67% 60.53% 61.11% 60.68%
Benchmarks
Gross Profit Margin, Competitors
PepsiCo Inc. 54.69% 55.08% 54.99% 53.69% 52.96%

Source: Based on data from Coca-Cola Co. Annual Reports

2017 Calculations

1 Gross profit margin = 100 × Gross profit ÷ Net operating revenues
= 100 × 22,154 ÷ 35,410 = 62.56%

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Coca-Cola Co.'s gross profit margin improved from 2015 to 2016 and from 2016 to 2017.

Operating Profit Margin

Coca-Cola Co., operating profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Operating income 7,501  8,626  8,728  9,708  10,228 
Net operating revenues 35,410  41,863  44,294  45,998  46,854 
Ratio
Operating profit margin1 21.18% 20.61% 19.70% 21.11% 21.83%
Benchmarks
Operating Profit Margin, Competitors
PepsiCo Inc. 16.54% 15.58% 13.25% 14.37% 14.61%
Operating Profit Margin, Sector
Beverages 18.20% 17.59% 15.91% 17.12% 17.60%
Operating Profit Margin, Industry
Consumer Goods 13.04% 12.35% 11.63% 10.63% 11.74%

Source: Based on data from Coca-Cola Co. Annual Reports

2017 Calculations

1 Operating profit margin = 100 × Operating income ÷ Net operating revenues
= 100 × 7,501 ÷ 35,410 = 21.18%

Ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Coca-Cola Co.'s operating profit margin improved from 2015 to 2016 and from 2016 to 2017.

Net Profit Margin

Coca-Cola Co., net profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income attributable to shareowners of The Coca-Cola Company 1,248  6,527  7,351  7,098  8,584 
Net operating revenues 35,410  41,863  44,294  45,998  46,854 
Ratio
Net profit margin1 3.52% 15.59% 16.60% 15.43% 18.32%
Benchmarks
Net Profit Margin, Competitors
PepsiCo Inc. 7.65% 10.08% 8.65% 9.77% 10.15%
Net Profit Margin, Sector
Beverages 6.17% 12.28% 11.93% 12.08% 13.53%
Net Profit Margin, Industry
Consumer Goods 8.31% 10.38% 9.26% 7.86% 9.13%

Source: Based on data from Coca-Cola Co. Annual Reports

2017 Calculations

1 Net profit margin = 100 × Net income attributable to shareowners of The Coca-Cola Company ÷ Net operating revenues
= 100 × 1,248 ÷ 35,410 = 3.52%

Ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Coca-Cola Co.'s net profit margin deteriorated from 2015 to 2016 and from 2016 to 2017.

Return on Equity (ROE)

Coca-Cola Co., ROE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income attributable to shareowners of The Coca-Cola Company 1,248  6,527  7,351  7,098  8,584 
Equity attributable to shareowners of The Coca-Cola Company 17,072  23,062  25,554  30,320  33,173 
Ratio
ROE1 7.31% 28.30% 28.77% 23.41% 25.88%
Benchmarks
ROE, Competitors
PepsiCo Inc. 44.60% 57.04% 45.73% 37.35% 27.76%
ROE, Sector
Beverages 21.83% 37.64% 34.16% 28.50% 26.67%
ROE, Industry
Consumer Goods 27.31% 34.04% 31.07% 25.80% 26.14%

Source: Based on data from Coca-Cola Co. Annual Reports

2017 Calculations

1 ROE = 100 × Net income attributable to shareowners of The Coca-Cola Company ÷ Equity attributable to shareowners of The Coca-Cola Company
= 100 × 1,248 ÷ 17,072 = 7.31%

Ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders' equity. Coca-Cola Co.'s ROE deteriorated from 2015 to 2016 and from 2016 to 2017.

Return on Assets (ROA)

Coca-Cola Co., ROA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income attributable to shareowners of The Coca-Cola Company 1,248  6,527  7,351  7,098  8,584 
Total assets 87,896  87,270  90,093  92,023  90,055 
Ratio
ROA1 1.42% 7.48% 8.16% 7.71% 9.53%
Benchmarks
ROA, Competitors
PepsiCo Inc. 6.09% 8.54% 7.83% 9.24% 8.70%
ROA, Sector
Beverages 3.64% 7.97% 8.01% 8.37% 9.15%
ROA, Industry
Consumer Goods 5.56% 7.31% 6.95% 6.15% 7.26%

Source: Based on data from Coca-Cola Co. Annual Reports

2017 Calculations

1 ROA = 100 × Net income attributable to shareowners of The Coca-Cola Company ÷ Total assets
= 100 × 1,248 ÷ 87,896 = 1.42%

Ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Coca-Cola Co.'s ROA deteriorated from 2015 to 2016 and from 2016 to 2017.