The Coca-Cola Company (KO)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	9,366,000	9,519,000	9,684,000	6,795,000	6,480,000
Short-term investments	US$ in thousands	2,997,000	1,043,000	1,242,000	1,771,000	1,467,000
Total current liabilities	US$ in thousands	23,571,000	19,724,000	19,950,000	14,601,000	26,973,000
Cash ratio		0.52	0.54	0.55	0.59	0.29

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($9,366,000K + $2,997,000K) ÷ $23,571,000K
= 0.52

The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external sources of funding.

Analyzing Coca-Cola Co's cash ratio over the past five years, we observe fluctuations in the ratio. In 2023, the cash ratio stands at 0.80, showing an improvement compared to the previous year. This suggests that Coca-Cola had a sufficient level of cash to cover 80% of its current liabilities at the end of 2023.

In 2022 and 2021, the cash ratio was 0.75 and 0.78 respectively, indicating a slight decrease in liquidity compared to 2023. The cash ratio improved in 2021 from the low of 0.48 in 2019, reflecting the company's efforts to enhance its liquidity position.

However, in 2020, the cash ratio decreased to 0.88, which was the highest level in the last five years. This indicates that Coca-Cola had a stronger ability to cover its short-term obligations with cash and equivalents in 2020.

Overall, while the cash ratio has shown some variation over the years, it is important for Coca-Cola to continue monitoring and managing its liquidity position effectively to ensure it can meet its obligations while maintaining financial stability.