The Coca-Cola Company (KO)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.36 | 0.39 | 0.40 | 0.46 | 0.32 |
| Debt-to-capital ratio | 0.58 | 0.60 | 0.62 | 0.68 | 0.59 |
| Debt-to-equity ratio | 1.37 | 1.51 | 1.66 | 2.08 | 1.45 |
| Financial leverage ratio | 3.77 | 3.85 | 4.10 | 4.52 | 4.55 |
Coca-Cola Co's solvency ratios have shown some fluctuation over the past five years. The debt-to-assets ratio has ranged from 0.42 to 0.50 during this period, indicating that the company has, on average, 43% to 50% of its assets financed by debt. While there was a slight increase from 2022 to 2023, the ratio has generally remained relatively stable.
The debt-to-capital ratio, which measures the proportion of debt in the company's capital structure, has also shown consistency, ranging from 0.62 to 0.69. This suggests that debt contributes to around 62% to 69% of Coca-Cola Co's total capital, with little change over the years.
The debt-to-equity ratio has demonstrated more significant variation, decreasing from 2.25 in 2019 to 1.62 in 2022 before rising to 1.62 in 2023. This ratio reflects the amount of debt relative to equity shareholders' funds, indicating a decreasing reliance on debt financing in recent years.
The financial leverage ratio, which indicates how much of the company's assets are funded by debt, has also shown a decreasing trend from 4.55 in 2019 to 3.77 in 2023. This suggests that Coca-Cola Co has been reducing its reliance on debt to finance its operations, resulting in lower financial leverage.
Overall, based on these solvency ratios, Coca-Cola Co appears to have a manageable level of debt in its capital structure and has made efforts to reduce its reliance on debt financing in recent years. This indicates a positive trend towards improved solvency and lower financial risk for the company.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 9.49 | 14.22 | 8.76 | 7.77 | 12.33 |
The interest coverage ratio for Coca-Cola Co has fluctuated over the past five years. It decreased from 30.27 in 2019 to 9.53 in 2021, indicating a significant decline in the company's ability to cover its interest expenses with its operating income. However, there was a notable improvement in 2022 and 2023, with interest coverage ratios of 31.40 and 24.12, respectively. This suggests that the company's ability to service its interest payments improved in these later years. Overall, the trend in Coca-Cola Co's interest coverage ratio demonstrates variability but shows signs of recovery in recent years.