Microsoft Excel LibreOffice Calc

Coca-Cola Co. (KO)

Short-term (Operating) Activity Analysis

Difficulty: Beginner

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Ratios (Summary)

Coca-Cola Co., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Turnover Ratios
Inventory turnover 4.26 4.99 6.16 6.02 5.77
Receivables turnover 9.38 9.66 10.86 11.24 10.30
Payables turnover 4.71 5.79 6.14 6.25 8.56
Working capital turnover 22.58 3.79 5.60 6.85 75.16
Average No. of Days
Average inventory processing period 86 73 59 61 63
Add: Average receivable collection period 39 38 34 32 35
Operating cycle 125 111 93 93 98
Less: Average payables payment period 77 63 59 58 43
Cash conversion cycle 48 48 34 35 55

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Coca-Cola Co.’s inventory turnover deteriorated from 2016 to 2017 and from 2017 to 2018.
Receivables turnover An activity ratio equal to revenue divided by receivables. Coca-Cola Co.’s receivables turnover deteriorated from 2016 to 2017 and from 2017 to 2018.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Coca-Cola Co.’s payables turnover declined from 2016 to 2017 and from 2017 to 2018.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Coca-Cola Co.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Coca-Cola Co.’s average inventory processing period deteriorated from 2016 to 2017 and from 2017 to 2018.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Coca-Cola Co.’s average receivable collection period deteriorated from 2016 to 2017 and from 2017 to 2018.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Coca-Cola Co.’s operating cycle deteriorated from 2016 to 2017 and from 2017 to 2018.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Coca-Cola Co.’s average payables payment period increased from 2016 to 2017 and from 2017 to 2018.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.

Inventory Turnover

Coca-Cola Co., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Cost of goods sold 11,770  13,256  16,465  17,482  17,889 
Inventories 2,766  2,655  2,675  2,902  3,100 
Ratio
Inventory turnover1 4.26 4.99 6.16 6.02 5.77
Benchmarks
Inventory Turnover, Competitors
PepsiCo Inc. 9.39 9.77 10.36 10.44 9.83
Inventory Turnover, Sector
Beverages 6.98 7.50 8.28 8.16 7.81
Inventory Turnover, Industry
Consumer Goods 7.51 7.32 7.50 7.47 7.66

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Inventory turnover = Cost of goods sold ÷ Inventories
= 11,770 ÷ 2,766 = 4.26

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Coca-Cola Co.’s inventory turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

Receivables Turnover

Coca-Cola Co., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Net operating revenues 31,856  35,410  41,863  44,294  45,998 
Trade accounts receivable, less allowances 3,396  3,667  3,856  3,941  4,466 
Ratio
Receivables turnover1 9.38 9.66 10.86 11.24 10.30
Benchmarks
Receivables Turnover, Competitors
PepsiCo Inc. 9.05 9.04 9.38 9.80 10.03
Receivables Turnover, Sector
Beverages 9.16 9.25 9.92 10.34 10.14
Receivables Turnover, Industry
Consumer Goods 14.06 13.68 13.83 14.15 12.82

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Receivables turnover = Net operating revenues ÷ Trade accounts receivable, less allowances
= 31,856 ÷ 3,396 = 9.38

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Coca-Cola Co.’s receivables turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

Payables Turnover

Coca-Cola Co., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Cost of goods sold 11,770  13,256  16,465  17,482  17,889 
Trade accounts payable 2,498  2,288  2,682  2,795  2,089 
Ratio
Payables turnover1 4.71 5.79 6.14 6.25 8.56
Benchmarks
Payables Turnover, Competitors
PepsiCo Inc. 4.07 4.28 4.58 5.12 6.02
Payables Turnover, Sector
Beverages 4.24 4.66 5.05 5.50 6.76
Payables Turnover, Industry
Consumer Goods 5.10 4.81 5.08 5.55 6.06

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Payables turnover = Cost of goods sold ÷ Trade accounts payable
= 11,770 ÷ 2,498 = 4.71

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Coca-Cola Co.’s payables turnover declined from 2016 to 2017 and from 2017 to 2018.

Working Capital Turnover

Coca-Cola Co., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Current assets 30,634  36,545  34,010  33,395  32,986 
Less: Current liabilities 29,223  27,194  26,532  26,930  32,374 
Working capital 1,411  9,351  7,478  6,465  612 
Net operating revenues 31,856  35,410  41,863  44,294  45,998 
Ratio
Working capital turnover1 22.58 3.79 5.60 6.85 75.16
Benchmarks
Working Capital Turnover, Competitors
PepsiCo Inc. – 6.04 10.55 11.56 25.94
Working Capital Turnover, Sector
Beverages 82.78 4.98 7.79 9.01 35.40
Working Capital Turnover, Industry
Consumer Goods – 21.83 24.37 14.79 –

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Working capital turnover = Net operating revenues ÷ Working capital
= 31,856 ÷ 1,411 = 22.58

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Coca-Cola Co.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Average Inventory Processing Period

Coca-Cola Co., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Inventory turnover 4.26 4.99 6.16 6.02 5.77
Ratio (no. of days)
Average inventory processing period1 86 73 59 61 63
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors
PepsiCo Inc. 39 37 35 35 37
Average Inventory Processing Period, Sector
Beverages 52 49 44 45 47
Average Inventory Processing Period, Industry
Consumer Goods 49 50 49 49 48

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 4.26 = 86

Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Coca-Cola Co.’s average inventory processing period deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Receivable Collection Period

Coca-Cola Co., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Receivables turnover 9.38 9.66 10.86 11.24 10.30
Ratio (no. of days)
Average receivable collection period1 39 38 34 32 35
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
PepsiCo Inc. 40 40 39 37 36
Average Receivable Collection Period, Sector
Beverages 40 39 37 35 36
Average Receivable Collection Period, Industry
Consumer Goods 26 27 26 26 28

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 9.38 = 39

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Coca-Cola Co.’s average receivable collection period deteriorated from 2016 to 2017 and from 2017 to 2018.

Operating Cycle

Coca-Cola Co., operating cycle calculation, comparison to benchmarks

No. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 86 73 59 61 63
Average receivable collection period 39 38 34 32 35
Ratio
Operating cycle1 125 111 93 93 98
Benchmarks
Operating Cycle, Competitors
PepsiCo Inc. 79 77 74 72 73
Operating Cycle, Sector
Beverages 92 88 81 80 83
Operating Cycle, Industry
Consumer Goods 75 77 75 75 76

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 86 + 39 = 125

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Coca-Cola Co.’s operating cycle deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Payables Payment Period

Coca-Cola Co., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Payables turnover 4.71 5.79 6.14 6.25 8.56
Ratio (no. of days)
Average payables payment period1 77 63 59 58 43
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
PepsiCo Inc. 90 85 80 71 61
Average Payables Payment Period, Sector
Beverages 86 78 72 66 54
Average Payables Payment Period, Industry
Consumer Goods 72 76 72 66 60

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.71 = 77

Ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Coca-Cola Co.’s average payables payment period increased from 2016 to 2017 and from 2017 to 2018.

Cash Conversion Cycle

Coca-Cola Co., cash conversion cycle calculation, comparison to benchmarks

No. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 86 73 59 61 63
Average receivable collection period 39 38 34 32 35
Average payables payment period 77 63 59 58 43
Ratio
Cash conversion cycle1 48 48 34 35 55
Benchmarks
Cash Conversion Cycle, Competitors
PepsiCo Inc. -11 -8 -6 1 12
Cash Conversion Cycle, Sector
Beverages 6 10 9 14 29
Cash Conversion Cycle, Industry
Consumer Goods 3 1 3 9 16

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25).

2018 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 86 + 39 – 77 = 48

Ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.