The Coca-Cola Company (KO)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	4.19	4.33	3.94	3.86	4.25	4.74	4.69	4.26	4.50	4.67	4.37	4.04	4.11	4.11	3.92	4.11	4.33	4.33	3.98	4.20
Receivables turnover	13.42	12.88	11.12	9.46	12.33	10.60	—	—	11.01	—	—	—	10.50	8.75	8.92	8.39	9.38	8.27	7.22	9.01
Payables turnover	3.31	—	—	—	2.88	—	—	—	2.68	—	—	—	2.89	—	—	—	3.84	—	—	—
Working capital turnover	14.47	13.02	12.70	12.35	15.00	15.68	15.83	11.91	14.90	4.58	5.07	6.14	7.12	9.51	13.61	—	—	—	—	58.12

Coca-Cola Co's activity ratios indicate the efficiency of its operations in managing inventory, receivables, payables, and working capital.

1. Inventory turnover:
Inventory turnover measures how effectively a company manages its inventory. Coca-Cola Co's inventory turnover has been relatively stable around 4x per year over the past eight quarters. A higher turnover suggests efficient inventory management, which is crucial in the beverage industry to prevent wastage and obsolescence.

2. Receivables turnover:
Receivables turnover reflects how quickly a company collects outstanding payments from its customers. Coca-Cola Co's receivables turnover has shown an upward trend, increasing from around 8.65 in Q1 2022 to 13.42 in Q4 2023. This implies that the company has been more efficient in collecting payments from customers in recent quarters.

3. Payables turnover:
Payables turnover measures how long it takes a company to pay its suppliers. Unfortunately, data for this ratio is not available for Q3 and Q2 2023. However, based on the available data, Coca-Cola Co's payables turnover has been relatively stable around 3.3x per year, indicating a moderate pace in settling its payables.

4. Working capital turnover:
Working capital turnover indicates how effectively a company utilizes its working capital to generate revenue. Coca-Cola Co's working capital turnover has fluctuated over the past eight quarters, ranging from 11.91 to 15.83. A higher turnover ratio suggests better utilization of working capital to generate sales.

In summary, Coca-Cola Co has shown efficiency in managing its inventory and receivables, with stable payables turnover indicating a moderate pace in settling payments. The working capital turnover has varied but indicates a decent utilization of working capital in revenue generation. Overall, the company's activity ratios reflect generally efficient operational performance.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	87.19	84.35	92.63	94.66	85.84	77.01	77.81	85.65	81.14	78.23	83.51	90.29	88.74	88.77	93.16	88.80	84.37	84.22	91.77	86.85
Days of sales outstanding (DSO)	days	27.20	28.33	32.83	38.60	29.60	34.43	—	—	33.16	—	—	—	34.76	41.73	40.93	43.50	38.89	44.13	50.58	40.52
Number of days of payables	days	110.17	—	—	—	126.55	—	—	—	135.95	—	—	—	126.46	—	—	—	94.98	—	—	—

Coca-Cola Co's activity ratios provide insights into the efficiency of its operations.

Days of Inventory on Hand (DOH) increased from Q3 2023 to Q4 2023, indicating that the company is holding onto inventory for a slightly longer period. However, the DOH levels have fluctuated over the quarters, suggesting potential challenges in managing inventory levels efficiently.

Days of Sales Outstanding (DSO) decreased from Q3 2023 to Q4 2023, which is a positive sign as it indicates that the company is collecting revenue from sales more quickly. The trend of decreasing DSO over the quarters is favorable, as it shows effective management of accounts receivable.

The Number of Days of Payables for Q4 2023 increased compared to Q4 2022, indicating that the company is taking longer to settle its payables. However, as data for earlier quarters is not available, it is challenging to identify any trends or patterns in the management of accounts payable.

Overall, while there are fluctuations in activity ratios, Coca-Cola Co should focus on optimizing inventory levels, maintaining efficient account receivable management, and monitoring payables to ensure effective working capital management and operational efficiency.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	4.95	5.08	4.55	4.42	4.37	4.58	4.37	4.10	3.90	3.76	3.45	3.13	3.06	3.14	3.21	3.38	3.44	3.52	3.44	3.91
Total asset turnover	0.47	0.46	0.45	0.45	0.46	0.46	0.44	0.43	0.41	0.42	0.40	0.37	0.38	0.34	0.36	0.40	0.43	0.41	0.39	0.39

Long-term activity ratios provide insights into how efficiently a company is utilizing its long-term assets to generate sales. In the case of Coca-Cola Co, the fixed asset turnover ratio has shown some fluctuations over the past eight quarters, ranging from 4.10 to 5.08. This ratio indicates that, on average, the company generated between 4.10 and 5.08 in sales for every dollar invested in fixed assets during these periods.

Comparing this with the total asset turnover ratio, which ranged from 0.43 to 0.47 over the same period, we see that the company generated between $0.43 and $0.47 in sales for every dollar invested in total assets. The fluctuation in these ratios suggests varying levels of efficiency in asset utilization by Coca-Cola Co.

Overall, the fixed asset turnover ratio generally outperformed the total asset turnover ratio, indicating that the company may be more efficient in generating sales from its fixed assets compared to its total assets. However, further analysis and comparison with industry benchmarks would be necessary to assess the company's performance in a broader context.