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KO (Coca-Cola Co) Altman Z-Score : 4.06 (As of Oct. 31, 2024)


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What is Coca-Cola Co Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Good Sign:

Altman Z-score of 4.08 is strong.

Coca-Cola Co has a Altman Z-Score of 4.06, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Coca-Cola Co's Altman Z-Score or its related term are showing as below:

KO' s Altman Z-Score Range Over the Past 10 Years
Min: 3.24   Med: 3.69   Max: 4.49
Current: 4.08

During the past 13 years, Coca-Cola Co's highest Altman Z-Score was 4.49. The lowest was 3.24. And the median was 3.69.


Coca-Cola Co Altman Z-Score Historical Data

The historical data trend for Coca-Cola Co's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Coca-Cola Co Altman Z-Score Chart

Coca-Cola Co Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 4.03 4.08 4.17 4.49 4.22

Coca-Cola Co Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.13 4.22 4.22 4.23 4.28

Competitive Comparison of Coca-Cola Co's Altman Z-Score

For the Beverages - Non-Alcoholic subindustry, Coca-Cola Co's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Coca-Cola Co's Altman Z-Score Distribution in the Beverages - Non-Alcoholic Industry

For the Beverages - Non-Alcoholic industry and Consumer Defensive sector, Coca-Cola Co's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Coca-Cola Co's Altman Z-Score falls into.



Coca-Cola Co Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Coca-Cola Co's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.0162+1.4*0.7147+3.3*0.1355+0.6*3.6018+1.0*0.4363
=4.06

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Sep. 2024:
Total Assets was $106,266 Mil.
Total Current Assets was $30,288 Mil.
Total Current Liabilities was $28,569 Mil.
Retained Earnings was $75,946 Mil.
Pre-Tax Income was 3380 + 3028 + 3872 + 2482 = $12,762 Mil.
Interest Expense was -425 + -418 + -382 + -413 = $-1,638 Mil.
Revenue was 11854 + 12363 + 11300 + 10849 = $46,366 Mil.
Market Cap (Today) was $281,342 Mil.
Total Liabilities was $78,112 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(30288 - 28569)/106266
=0.0162

X2=Retained Earnings/Total Assets
=75946/106266
=0.7147

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(12762 - -1638)/106266
=0.1355

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=281342.232/78112
=3.6018

X5=Revenue/Total Assets
=46366/106266
=0.4363

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Coca-Cola Co has a Altman Z-Score of 4.06 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Coca-Cola Co  (NYSE:KO) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Coca-Cola Co Altman Z-Score Related Terms

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Coca-Cola Co Business Description

Address
One Coca-Cola Plaza, Atlanta, GA, USA, 30313
Founded in 1886, Atlanta-headquartered Coca-Cola is the world's largest nonalcoholic beverage company, with a strong portfolio of 200 brands covering key categories including carbonated soft drinks, water, sports, energy, juice, and coffee. Together with bottlers and distribution partners, the company sells finished beverage products bearing Coca-Cola and licensed brands through retailers and food-service locations in more than 200 countries and regions globally. Coca-Cola generates around two thirds of its total revenue overseas, with a significant portion from emerging economies in Latin America and Asia-Pacific.
Executives
Nancy Quan officer: Senior Vice President THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
James Quincey other: Group President THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Jennifer K Mann officer: Senior Vice President THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Lisa Chang other: Chief People Officer THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Beatriz R Perez officer: Senior Vice President ONE COCA-COLA PLAZA, ATLANTA GA 30313
Manuel Arroyo other: Group President THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Bruno Pietracci other: President, Latin America OU C/O THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Nikolaos Koumettis other: Group President THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Henrique Braun other: Operating Unit President C/O THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Monica Howard Douglas officer: SVP & General Counsel 535 MADISON AVENUE, 20TH FLOOR, NEW YORK NY 10022
John Murphy other: Group President THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Mark Randazza officer: Principal Accounting Officer THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Thomas Sinnickson Gayner director C/O MARKEL CORP, 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060
Amity Millhiser director C/O THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313
Erin L May officer: Vice President & Controller C/O THE COCA-COLA COMPANY, ONE COCA-COLA PLAZA, ATLANTA GA 30313