The Coca-Cola Company (KO)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 14,742,000 | 14,493,000 | 12,547,000 | 13,085,000 | 11,123,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 24,856,000 | 25,941,000 | 24,105,000 | 22,999,000 | 19,299,000 |
| Return on total capital | 59.31% | 55.87% | 52.05% | 56.89% | 57.64% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $14,742,000K ÷ ($—K + $24,856,000K)
= 59.31%
The Return on Total Capital (ROTC) measures a company's ability to generate profits from all the capital invested in its operations. Analyzing The Coca-Cola Company's ROTC over the past five years, we observe fluctuations in the performance metric.
As of December 31, 2020, The Coca-Cola Company recorded a ROTC of 57.64%, indicating that the company efficiently generated profit relative to its total invested capital. Moving into the subsequent year, the ROTC slightly decreased to 56.89% by December 31, 2021.
By December 31, 2022, the ROTC further declined to 52.05%, signifying a dip in the company's profitability relative to its total capital. However, there was a notable rebound by December 31, 2023, with the ROTC increasing to 55.87%, showing improved efficiency in capital utilization.
The most recent data point as of December 31, 2024, demonstrates a ROTC of 59.31%, marking a significant improvement in generating profits relative to the total capital invested in the company.
Overall, The Coca-Cola Company's ROTC has displayed variability over the past five years, with fluctuations in profitability performance. Monitoring this metric over time can provide insights into the company's capital efficiency and financial health.
Peer comparison
Dec 31, 2024