The Coca-Cola Company (KO)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.03 | 1.06 | 1.08 | 1.04 | 1.13 | 1.14 | 1.14 | 1.15 | 1.15 | 1.13 | 1.13 | 1.18 | 1.13 | 1.52 | 1.47 | 1.33 | 1.32 | 1.13 | 1.09 | 0.87 |
| Quick ratio | 0.51 | 0.64 | 0.65 | 0.60 | 0.58 | 0.63 | 0.65 | 0.61 | 0.59 | 0.62 | 0.57 | 0.55 | 0.63 | 0.93 | 0.85 | 0.76 | 0.75 | 0.79 | 0.74 | 0.55 |
| Cash ratio | 0.51 | 0.64 | 0.65 | 0.60 | 0.58 | 0.63 | 0.65 | 0.61 | 0.59 | 0.62 | 0.57 | 0.55 | 0.63 | 0.93 | 0.85 | 0.76 | 0.75 | 0.79 | 0.74 | 0.55 |
The Coca-Cola Company's liquidity ratios have shown fluctuations over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally improved from 0.87 on March 31, 2020, to a peak of 1.52 on September 30, 2021. However, there was a slight decrease to 1.03 by December 31, 2024.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. This ratio has varied, with a low of 0.51 on December 31, 2024, and a high of 0.93 on September 30, 2021.
The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, has followed a similar trend to the quick ratio, ranging from 0.51 on December 31, 2024, to 0.93 on September 30, 2021.
Overall, while the current ratio has generally shown improvement over the years, the quick and cash ratios have been more volatile. It is essential for The Coca-Cola Company to maintain a balance between current assets and liabilities to ensure its ability to meet short-term obligations efficiently.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 94.18 | 93.79 | 94.80 | 98.21 | 87.19 | 84.35 | 92.63 | 94.66 | 85.84 | 77.01 | 77.81 | 85.65 | 81.14 | 78.23 | 83.51 | 72.32 | 70.94 | 70.95 | 74.78 | 88.80 |
The cash conversion cycle for The Coca-Cola Company has shown fluctuations over the analyzed periods, ranging from a low of 70.94 days to a high of 98.21 days. Generally, a lower cash conversion cycle is indicative of a more efficient management of working capital.
For the majority of the periods, the company's cash conversion cycle remained below 90 days, indicating that on average it takes less than three months for the company to convert its investment in inventory into cash from sales. This suggests that The Coca-Cola Company has been relatively efficient in managing its cash flow and working capital during the analyzed periods.
However, there were some fluctuations observed in the cash conversion cycle, with some periods showing higher values around 90 days or above. Such fluctuations might be influenced by various factors such as changes in inventory management, payment terms with suppliers and customers, and the company's overall operational efficiency.
Overall, it is essential for The Coca-Cola Company to closely monitor and manage its cash conversion cycle to ensure optimal utilization of resources, efficient cash flow management, and sustainable operations in the long term.