Coca-Cola 2016 Financial Analysis (Half year ended 30 June)
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Coca-Cola Amatil reported financial results for the first half of 2016. Key highlights include a 3% increase in sales but a 4% rise in costs. This led to a small improvement in gross and net profit margins. Liquidity ratios declined slightly due to a large drop in current assets compared to the previous period. Overall profitability and efficiency increased modestly while debt levels decreased, representing stable financial performance.
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Coca-Cola 2016 Financial Analysis (Half year ended 30 June)
- 1. Coca-Cola Amatil 2016 Financial Analysis • Australian subsidiary of The Coca-Cola Company • Half-yearly results released on 26 August 2016 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Reporting Period Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016
- 3. The Key Numbers In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2% In $millions This Period Last Period Variance Sales 2517.1 2449.7 3% Cost of Goods Sold 1467.7 1410.2 4% Gross Profit 935.5 920.5 2% Net Profit 204.1 187.3 9% Current Assets 2604.4 3128.0 -17% Non-Current Assets 3523.0 3539.4 0% Current Liabilities 1699.8 2001.3 -15% Non-Current Liabilities 1958.3 2256.3 -13% Owner's Equity 2469.3 2409.8 2%
- 4. The Key Numbers Operating Investing Financing Operating Investing Financing +331.7m ─36.8m ─651.4m Cash Balance This Period Operating Investing Financing Operating Investing Financing +161.2m ─157.4m Cash Balance Last Period +332.6m ─356.5m Change in Cash Balance +336.4m Change in Cash Balance
- 5. Analysis of the Financial Reports
- 6. Analysis of the Financial Reports Profitability Gross Profit Margin This Period Last Period Comparison 37.2% 37.6% Worse Sales $1.00 Gross Profit 37.2c COGS 62.8c Income Statement What does this mean? For every $1 the firm generates in sales: • A Gross Profit of 37.2 cents is earned • Once the Cost of Goods Sold is deducted.
- 7. Analysis of the Financial Reports Profitability Net Profit Margin This Period Last Period Comparison 8.1% 7.6% Better Income Statement $1.00 of Sales Gross Profit 37.2c COGS 62.8c Net Profit 8.1c Other Expenses 29.1c What does this mean? For every $1 the firm generates in sales an overall Net Profit of 8.1 cents is earned.
- 8. Analysis of the Financial Reports This Period Sales $1.00 Gross Profit 37.2c COGS 62.8c Net Profit 8.1c Other Exp 29.1c ─ = ─ = Last Period Sales $1.00 Gross Profit 37.6c COGS 62.4c Net Profit 7.6c Other Exp 30.0c ─ = ─ = Higher COGS… possible causes? • Suppliers ↑ prices • Mark-ups ↓ But a better Net Profit Margin… possible causes? • ↓ Other Expenses • E.g. lower wages
- 9. Analysis of the Financial Reports Profitability Return on Assets This Period Last Period Comparison 3.2% 2.8% Better What does this mean? For every $1 of Assets the firm has, the business is earning a Net Profit of 3.2 cents. Business Net Profit 3.2c Balance Sheet Assets Liabilities Owner’s Equity Balance Sheet Assets Liabilities $1 Owner’s Equity
- 10. Analysis of the Financial Reports Return on Investment This Period Last Period Comparison 8.4% 7.6% Better What does this mean? For every $1 of Capital invested in the firm, the business is earning a Net Profit of 8.4 cents. Net Profit 8.4c Balance Sheet Assets Liabilities Owner’s Eq. $1 Business Balance Sheet Assets Liabilities Owner’s Eq. $1 Profitability
- 11. Analysis of the Financial Reports Efficiency Asset Turnover Ratio This Period Last Period Comparison 0.39 times 0.37 times Better Business $0.39 of Sales Balance Sheet Assets Liabilities Owner’s Equity Balance Sheet Assets Liabilities $1 Owner’s Equity What does this mean? For every $1 of Assets the firm has, the business generates $0.39 of sales
- 12. Analysis of the Financial Reports Efficiency This Period Last Period Profitability and DuPont Formula Asset Turnover Net Profit Margin Return on Assets 0.39 times 0.37 times 8.1% 7.6% 3.2% 2.8% = X = X = X Better Better Better
- 13. Analysis of the Financial Reports Efficiency Stock Turnover Ratio This Period Last Period Comparison 189 days 190 days Better What does this mean? The firm takes, on average, 189 days to sell all of its inventory
- 14. Analysis of the Financial Reports Liquidity Working Capital Ratio This Period Last Period Comparison 1.53 1.56 Worse What does this mean? For every $1 of Current Liabilities the firm has, there are $1.53 in Current Assets to pay them Balance Sheet Current Assets Current Liabilities $1.53 $1.00 Balance Sheet Current Assets Current Liabilities $1.53 $1.00 Balance Sheet Current Assets Current Liabilities $1.53 $1.00
- 15. Analysis of the Financial Reports Liquidity Quick Asset Ratio This Period Last Period Comparison 1.03 1.16 Worse What does this mean? For every $1 of Urgent Liabilities the firm has, there are $1.03 in Quick Assets to pay them $1.03 Quick Assets $1.00 Urgent Liabilities
- 16. Analysis of the Financial Reports Liquidity Cash Flow Ratio This Period Last Period Comparison 0.18 0.08 Better What does this mean? For every $1 of Current Liabilities the firm has, the firm’s Operating Activities are generating 18 cents to pay them Operating Investing Financing $0.18 Cash Balance $1.00 Current Liabilities ? ?
- 17. Analysis of the Financial Reports Stability Debt Ratio (Gearing) This Period Last Period Comparison 60% 64% Better What does this mean? 60% of the firm’s Total Assets have been financed with debt (Liabilities) Balance Sheet Assets Liabilities $1.00 $0.60 Owner’s Equity $0.40 Balance Sheet Assets Liabilities $1.00 $0.60 Owner’s Equity $0.40 Balance Sheet Assets Liabilities $1.00 $0.60 Owner’s Equity $0.40 Balance Sheet Assets Liabilities $1.00 $0.60 Owner’s Equity $0.40
- 19. Summary of Results This Period Last PeriodProfitability Gross Profit Margin 37.2% 37.6% Net Profit Margin 8.1% 7.6% Return on Assets 3.2% 2.8% Return on Investment 8.4% 7.6% Efficiency Asset Turnover Ratio 0.39 times 0.37 times Stock Turnover Ratio 189 days 190 days This Period Last PeriodLiquidity Working Capital Ratio 1.53 1.56 Quick Asset Ratio 1.03 1.16 Cash Flow Ratio 0.18 0.08 Debt Ratio (Gearing) 60% 64% Liquidity