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Coca-Cola Co. (KO)


Price to FCFE (P/FCFE)

Difficulty: Intermediate


Free Cash Flow to Equity (FCFE)

Coca-Cola Co., FCFE calculation

USD $ in millions

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income attributable to shareowners of The Coca-Cola Company 6,434  1,248  6,527  7,351  7,098 
Net income attributable to noncontrolling interests 42  35  23  15  26 
Net noncash charges 2,046  2,183  2,467  3,319  3,930 
Net change in operating assets and liabilities (1,202) 3,529  (221) (157) (439)
Net cash provided by operating activities 7,320  6,995  8,796  10,528  10,615 
Purchases of property, plant and equipment (1,347) (1,675) (2,262) (2,553) (2,406)
Proceeds from disposals of property, plant and equipment 245  104  150  85  223 
Issuances of debt 27,339  29,857  27,281  40,434  41,674 
Payments of debt (30,568) (28,768) (25,615) (37,738) (36,962)
Free cash flow to equity (FCFE) 2,989  6,513  8,350  10,756  13,144 

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).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Coca-Cola Co.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Coca-Cola Co.’s FCFE declined from 2016 to 2017 and from 2017 to 2018.

Price to FCFE Ratio, Current

Coca-Cola Co., current P/FCFE calculation, comparison to benchmarks

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No. shares of common stock outstanding 4,266,115,111
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions) 2,989 
FCFE per share 0.70
Current share price (P) 49.61
Ratio
P/FCFE 70.81
Benchmarks
P/FCFE, Competitors
PepsiCo Inc.
P/FCFE, Sector
Beverages 171.39
P/FCFE, Industry
Consumer Goods 16.16

Based on: 10-K (filing date: 2019-02-21).

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.


Price to FCFE Ratio, Historical

Coca-Cola Co., historical P/FCFE calculation, comparison to benchmarks

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
No. shares of common stock outstanding1 4,275,340,031 4,265,906,533 4,293,461,702 4,329,497,778 4,366,243,616
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions)2 2,989  6,513  8,350  10,756  13,144 
FCFE per share4 0.70 1.53 1.94 2.48 3.01
Share price1, 3 45.86 44.04 41.78 44.16 42.05
Ratio
P/FCFE5 65.60 28.85 21.48 17.78 13.97
Benchmarks
P/FCFE, Competitors
PepsiCo Inc. 17.20 13.59 11.17 20.00
P/FCFE, Sector
Beverages 156.44 22.01 16.96 14.22 16.15
P/FCFE, Industry
Consumer Goods 14.50 15.56 13.22 13.20 13.41

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).

1 Data adjusted for splits and stock dividends.

2 See Details »

3 Close price on the filing date of Coca-Cola Co.’s Annual Report.

2018 Calculations

4 FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,989,000,000 ÷ 4,275,340,031 = 0.70

5 P/FCFE = Share price ÷ FCFE per share
= 45.86 ÷ 0.70 = 65.60

Ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Coca-Cola Co.’s P/FCFE ratio increased from 2016 to 2017 and from 2017 to 2018.