Coca Cola 's Current Ratio

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Although in 2013, Coca-Cola had a current ratio of 1.13 (meaning it had a $1.13 in currents assets for every dollar in current liabilities), the current ratio for Coca-Cola has widely fluctuated over the last few years. It has now recently dropped to that of 1.08 in the recent quarter of this year, and it continues to stay slightly below the industry standard of 1.21, which is not bad because it is fairly close to that of the industry. However, a current ratio of 1.08 and 1.13 is not either really good or bad. There could be a number of reasons as to why Coca-Cola’s current ratio numbers are particularly lower than the industry standard. This could indicate that the company has more long-term assets than short-term assets. The current…show more content…
After last year, nearly $8 billion of debt was acquired by Coca-Cola, which increased not only the debt level of the company, but also interest rates and borrowing costs. Thus, this very well did affect the capital structure of the company. It seems that according to research that Coca-Cola has been really focusing on the growth of the company and thus, they have in past few years been using much debt to finance such acquisitions. Even though the debt to asset ratio illustrates a rather high number, those looking to invest should not be concerned just yet. If thinking long-term, the return on these investments may exceed the amount of debt used to finance them, which could be of value to shareholders later in the future. However, if investments do not have a favorable return, this is could be of concern to shareholders/investors because this poses a risk of Coca-Cola not being able to pay back all of its debt. Profitability: Gross Profit Margin Coca-Cola shows impressive performance in profitable growth. Coca-Cola’s current gross profit margin is very high, which is good because this indicates that the company has done an exceptional job in cutting costs. Coca-Cola is making considerable effort in making use of costs of goods sold. The management team at Coca-Cola is effectively using raw materials, labor, and manufacturing supplies. According to Muhtar Kent, it
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