The Coca-Cola Company (KO)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 59.52% | 58.14% | 60.27% | 59.31% | 60.77% |
| Operating profit margin | 24.72% | 25.37% | 26.67% | 27.25% | 27.06% |
| Pretax margin | 28.33% | 27.11% | 32.06% | 29.47% | 28.77% |
| Net profit margin | 23.42% | 22.19% | 25.28% | 23.47% | 23.94% |
Coca-Cola Co's profitability ratios have shown a relatively stable performance over the past five years. The gross profit margin has fluctuated within a narrow range, with a slight decrease in 2022 but a small increase in 2023 compared to the previous years. This indicates that the company has been able to maintain a strong control over its cost of goods sold, resulting in a healthy level of gross profit relative to its revenue.
The operating profit margin has also remained relatively consistent, reflecting the company's ability to effectively manage its operating expenses in relation to its revenue. Despite minor fluctuations, Coca-Cola Co has consistently maintained a strong operating profit margin above 28%, indicating efficient operational management.
The pretax margin has shown more significant variability over the years, with a notable decrease in 2022 followed by a slight recovery in 2023. This suggests that the company may have experienced fluctuations in its non-operating income and expenses, impacting its overall profitability before taxes.
Lastly, the net profit margin, which represents the company's bottom-line profitability after accounting for all expenses, has demonstrated stability over the years, hovering around 23-25%. This indicates that Coca-Cola Co has been able to effectively manage its taxes, interest, and other costs to achieve a consistent level of net income relative to its revenue.
Overall, Coca-Cola Co's profitability ratios suggest a solid financial performance with a focus on cost control, operational efficiency, and maintaining a healthy level of profitability across its operations.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 11.58% | 11.76% | 10.92% | 10.31% | 11.68% |
| Return on assets (ROA) | 10.97% | 10.29% | 10.36% | 8.87% | 10.33% |
| Return on total capital | 23.57% | 20.73% | 22.89% | 18.79% | 25.09% |
| Return on equity (ROE) | 41.30% | 39.59% | 42.48% | 40.14% | 46.99% |
Coca-Cola Co has shown consistent profitability over the past five years, with improving trends in certain key profitability ratios. The operating return on assets (Operating ROA) has steadily increased from 11.28% in 2020 to 13.57% in 2023, indicating that the company has been effectively generating operating income from its assets.
Similarly, the return on assets (ROA) has shown improvement, reaching 10.97% in 2023 compared to 8.87% in 2020. This suggests that Coca-Cola Co is generating a higher level of net income relative to its total assets, indicating improved efficiency in asset utilization.
The return on total capital has also shown an upward trend over the period, increasing from 17.44% in 2020 to 21.99% in 2023. This indicates that the company is generating higher returns on the total capital employed, which includes both debt and equity.
Furthermore, the return on equity (ROE) has been consistently high, ranging from 39.59% to 46.99% over the five-year period. This indicates that Coca-Cola Co is generating substantial profits relative to the shareholders' equity, reflecting strong financial performance and efficient use of shareholder investments.
Overall, the profitability ratios suggest that Coca-Cola Co has been successful in improving its operational efficiency, generating higher returns on assets and capital, and maximizing shareholder value over the past five years.