The Coca-Cola Company (KO)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	3.88	4.19	4.25	4.50	4.11
Receivables turnover	—	—	—	—	—
Payables turnover	—	—	—	—	—
Working capital turnover	62.92	14.47	15.00	14.90	7.12

Based on the provided data for The Coca-Cola Company, let's analyze the activity ratios:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory in a given period.
- The trend for Coca-Cola's inventory turnover ratio shows some fluctuations over the years, ranging from 3.88 to 4.50.
- An increase in the inventory turnover ratio indicates that the company is selling its inventory more efficiently. However, a decreasing trend could suggest potential issues with sales or inventory management.

2. Receivables Turnover:
- The receivables turnover ratio reflects how effectively a company is collecting its accounts receivable during a specific period.
- In this case, the data shows that the receivables turnover ratio is not provided for any year, indicating a lack of information to assess the efficiency of Coca-Cola in collecting its receivables.

3. Payables Turnover:
- The payables turnover ratio illustrates how efficiently a company pays its suppliers during a given period.
- The data indicates that the payables turnover ratio is not provided for any year, preventing an analysis of Coca-Cola's effectiveness in managing its payables.

4. Working Capital Turnover:
- The working capital turnover ratio measures how well a company utilizes its working capital to generate sales revenue.
- Over the years, Coca-Cola's working capital turnover ratio has shown significant fluctuations, ranging from 7.12 to 62.92.
- A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate sales. The substantial increase from 2020 to 2024 suggests a notable improvement in utilizing working capital efficiently.

In conclusion, while the inventory turnover and working capital turnover ratios provide some insights into Coca-Cola's operational efficiency, the lack of data for receivables turnover and payables turnover limits a comprehensive analysis of the company's overall activity management.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	94.18	87.19	85.84	81.14	88.74
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—

The activity ratios of The Coca-Cola Company for the past five years indicate the efficiency of its operations in managing inventory, sales, and payables.

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown a decreasing trend from 88.74 days in 2020 to 94.18 days in 2024. This suggests that Coca-Cola has been able to sell its inventory at a faster rate, which is generally a positive sign as it indicates efficient inventory management.

2. Days of Sales Outstanding (DSO):
- The DSO data for all years is not available (marked as "— days"), making it difficult to assess the efficiency of the company in collecting its accounts receivable promptly. However, typically lower DSO values are preferred as they indicate quicker cash conversion from sales.

3. Number of Days of Payables:
- Similar to DSO, the number of days of payables information is not provided for any year. A lower value for days of payables indicates that the company is paying its suppliers faster while a higher value could indicate that the company is extending its payables, which can have cash flow benefits.

Overall, while the decreasing trend in DOH is a positive indicator, the lack of information on DSO and days of payables limits a comprehensive assessment of The Coca-Cola Company's efficiency in managing its working capital and operational activities.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	—	—	4.37	3.90	3.06
Total asset turnover	0.47	0.47	0.46	0.41	0.38

The long-term activity ratios provide insights into how efficiently The Coca-Cola Company is utilizing its assets to generate sales.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio shows how well the company is using its fixed assets to generate revenue. A higher ratio indicates better efficiency. The trend of this ratio for Coca-Cola shows a consistent improvement from 3.06 in 2020 to 4.37 in 2023, indicating that the company has been more effective in utilizing its fixed assets over the years.
- However, the lack of data for 2024 makes it challenging to assess the trend for that year. It might be due to data unavailability at this point.

2. Total Asset Turnover:
- The Total Asset Turnover ratio provides an overall view of how efficiently the company is using all its assets to generate revenue. A higher ratio is generally preferred as it indicates better asset utilization. In the case of Coca-Cola, the ratio has been increasing gradually from 0.38 in 2020 to 0.47 in both 2023 and 2024.
- The consistent improvement in the Total Asset Turnover ratio suggests that Coca-Cola has been effective in generating sales in relation to its total assets, which is a positive sign for the company's operational efficiency.

Overall, based on the data provided, The Coca-Cola Company has shown improved efficiency in utilizing its fixed assets and total assets to generate revenue over the years, as indicated by the upward trend in both Fixed Asset Turnover and Total Asset Turnover ratios.