The Balance Sheet and Corporate Financial Health Overview of Coca-Cola

The Balance Sheet and Corporate Financial Health Overview-Coca-Cola
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The Balance Sheet and Corporate Financial Health Overview-Coca-Cola
Introduction
This discussion is on the analysis of the 2019 balance sheet of the Coca-Cola Co. to evaluate its financial health, which is based upon an analysis of its three sections of assets, liabilities, and owner’s equity, referencing the specific items on each sheet and ways that they relate to one another. The following tests and an explanation of what each reveals will be carried out on the balance sheet: vertical, horizontal, and ratio analysis. The ratio analysis will include a comparison with the industry benchmark. Consequently, the following will be carried out: an assessment, which includes risks, the company’s current financial health based on the accurate interpretation of the findings of the three tests, and a suggestion of three ways to significantly improve the company’s financial health based upon the analysis. The weblink to the balance sheet is /ix?doc=/Archives/edgar/data/0000021344/000002134420000006/a2019123110-k.htm.
Analysis of Balance Sheet Sections
Assets
This section is made up of two subsections of current and non-current assets. The current assets for Coca-Cola are composed of Cash and Cash Equivalents, which are used to pay the short-term current liabilities. The marketable securities and the Short-Term Investments are composed of the current time deposits that are easy to convert into cash. Trade accounts receivable, inventories, and Prepaid expenses & other assets are part of the current assets, which make a total of $20,411 billion. The non-current assets of $65,970 billion are those that are held for more than a year and include tangible ones (Equity method investments, Other Investments, and assets) and intangible ones (Trademarks, franchise rights, goodwill). Coca-Cola’s total assets are $86,381 billion.
Liabilities
The Total Current Liabilities of $26,973 billion are composed of accounts payable & accrued expenses, loans & notes payable, current maturities of long-term debt, and accrued income taxes. They are Coca-Cola’s obligations that will fall due within the current year. The Total Non-current Liabilities of $38,310 billion are the obligations that are due in more than a year, which consists of long-term debt. Coca-Cola’s total liabilities are $65,283 billion.
Owners’ Equity
The Stockholders’ Equity attributable to Coca-Cola company is $18,981 billion, increased by the common stock, additional paid-in capital, and retained earnings, and reduced by the accumulated comprehensive loss and treasury stock. The minority interest in BA Sports Nutrition is added to bring the total Stockholders’ Equity & minority interest to $21,098 billion.
Tests on the Balance Sheet
Tables 1.0, 1.1, and 1.2 below show the balance sheet’s horizontal, vertical, and ratio analyses, having sourced the primary data from the US Securities Exchange (1).
Horizontal Analysis
Table 1.0 Coca-Cola’s Balance Sheet

12/31/2018

12/31/2019

Increase (Decrease)




Amount ($ 000)

%


$ 000

$ 000



Cash & Cash Equivalents

9,077,000

6,480,000

-2,597,000

-29%

S.T. Invests.

2,025,000

1,467,000

-558,000

-28%

TL Cash & S. Term Investments

11,102,000

7,947,000

-3,155,000

-28%

M. Securities

5,013,000

3,228,000

-1,785,000

-36%

Trade Accounts Rec’bles

3,685,000

3,971,000

286,000

8%

Inventories

3,071,000

3,379,000

308,000

10%

Prepaid exp. & other assets

2,059,000

1,886,000

-173,000

-8%

Total Current Assets

24,930,000

20,411,000

-4,519,000

-18%

Equity method invests.

19,412,000

19,025,000

-387,000

-2%

Other Invests.

867,000

854,000

-13,000

-1%

Other assets

4,148,000

6,075,000

1,927,000

46%

Def. Inc. Tax Assets

2,674,000

2,412,000

-262,000

-10%

Net PPE

9,598,000

10,838,000

1,240,000

13%

Trademarks

6,682,000

9,266,000

2,584,000

39%

Bottlers' franchise rights

51,000

109,000

58,000

114%

Goodwill

14,109,000

16,764,000

2,655,000

19%

Other intangible assets

745,000

627,000

-118,000

-16%

TL Non-Current Assets

58,286,000

65,970,000

7,684,000

13%

Total Assets

83,216,000

86,381,000

3,165,000

4%

Accounts payable & acc. Exp.

9,533,000

11,312,000

1,779,000

19%

Loans and notes payable

13,835,000

10,994,000

-2,841,000

-21%

Current maturities of long-term debt

5,003,000

4,253,000

-750,000

-15%

Accrued income taxes

411,000

414,000

3,000

1%

Total Current Liabilities

28,782,000

26,973,000

-1,809,000

-6%

Long Term Debt

25,376,000

27,516,000

2,140,000

8%

Other Non-Current Liabs.

7,646,000

8,510,000

864,000

11%

Deferred Taxes

2,354,000

2,284,000

-70,000

-3%

Total Non-current Liabs.

35,376,000

38,310,000

2,934,000

8%

Capital Stock

1,760,000

1,760,000

0

0%

Add. Paid-in Capital

16,520,000

17,154,000

634,000

4%

Retained Earnings

63,234,000

65,855,000

2,621,000

4%

Acc. comprehensive losses

-12,814,000

-13,544,000

-730,000

6%

Treasury Stock

-51,719,000

-52,244,000

-525,000

1%

Stockholders' Equity (Coca-Cola)