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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Coca-Cola Co., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net operating profit after taxes (NOPAT)¹	10,945)	10,884)	10,120)	11,202)	8,649)
Cost of capital²	9.94%	9.86%	9.80%	9.54%	9.20%
Invested capital³	86,857)	83,542)	79,959)	80,311)	75,674)

Economic profit⁴	2,313)	2,648)	2,283)	3,541)	1,689)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 10,945 – 9.94% × 86,857 = 2,313

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Coca-Cola Co. economic profit increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.

Coca-Cola Co., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income attributable to shareowners of The Coca-Cola Company	10,631)	10,714)	9,542)	9,771)	7,747)
Deferred income tax expense (benefit)¹	(11)	(2)	(122)	894)	(18)
Increase (decrease) in allowances²	4)	(14)	—)	(10)	2)
Increase (decrease) in accrued expenses related to restructuring³	(3)	(42)	6)	(162)	136)
Increase (decrease) in equity equivalents⁴	(10)	(58)	(116)	722)	120)
Interest expense	1,656)	1,527)	882)	1,597)	1,437)
Interest expense, operating lease liability⁵	45)	46)	42)	40)	49)
Adjusted interest expense	1,701)	1,573)	924)	1,637)	1,486)
Tax benefit of interest expense⁶	(357)	(330)	(194)	(344)	(312)
Adjusted interest expense, after taxes⁷	1,344)	1,243)	730)	1,293)	1,174)
(Gain) loss on marketable securities	(325)	(364)	367)	(505)	(153)
Interest income	(988)	(907)	(449)	(276)	(370)
Investment income, before taxes	(1,313)	(1,271)	(82)	(781)	(523)
Tax expense (benefit) of investment income⁸	276)	267)	17)	164)	110)
Investment income, after taxes⁹	(1,037)	(1,004)	(65)	(617)	(413)
Net income (loss) attributable to noncontrolling interest	18)	(11)	29)	33)	21)
Net operating profit after taxes (NOPAT)	10,945)	10,884)	10,120)	11,202)	8,649)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances.

³ Addition of increase (decrease) in accrued expenses related to restructuring.

⁴ Addition of increase (decrease) in equity equivalents to net income attributable to shareowners of The Coca-Cola Company.

⁵ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,213 × 3.70% = 45

⁶ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,701 × 21.00% = 357

⁷ Addition of after taxes interest expense to net income attributable to shareowners of The Coca-Cola Company.

⁸ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 1,313 × 21.00% = 276

⁹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Coca-Cola Co. NOPAT increased from 2022 to 2023 and from 2023 to 2024.

Coca-Cola Co., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Income taxes	2,437)	2,249)	2,115)	2,621)	1,981)
Less: Deferred income tax expense (benefit)	(11)	(2)	(122)	894)	(18)
Add: Tax savings from interest expense	357)	330)	194)	344)	312)
Less: Tax imposed on investment income	276)	267)	17)	164)	110)
Cash operating taxes	2,529)	2,314)	2,414)	1,907)	2,201)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Coca-Cola Co. cash operating taxes decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Coca-Cola Co., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Loans and notes payable	1,499)	4,557)	2,373)	3,307)	2,183)
Current maturities of long-term debt	648)	1,960)	399)	1,338)	485)
Long-term debt, excluding current maturities	42,375)	35,547)	36,377)	38,116)	40,125)
Operating lease liability¹	1,213)	1,362)	1,454)	1,471)	1,622)
Total reported debt & leases	45,735)	43,426)	40,603)	44,232)	44,415)
Equity attributable to shareowners of The Coca-Cola Company	24,856)	25,941)	24,105)	22,999)	19,299)
Net deferred tax (assets) liabilities²	1,150)	1,078)	1,168)	692)	(627)
Allowances³	506)	502)	516)	516)	526)
Accrued expenses related to restructuring⁴	1)	4)	46)	40)	202)
Equity equivalents⁵	1,657)	1,584)	1,730)	1,248)	101)
Accumulated other comprehensive (income) loss, net of tax⁶	16,843)	14,275)	14,895)	14,330)	14,601)
Equity attributable to noncontrolling interests	1,516)	1,539)	1,721)	1,861)	1,985)
Adjusted equity attributable to shareowners of The Coca-Cola Company	44,872)	43,339)	42,451)	40,438)	35,986)
Marketable securities⁷	(3,750)	(3,223)	(3,095)	(4,359)	(4,727)
Invested capital	86,857)	83,542)	79,959)	80,311)	75,674)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of accrued expenses related to restructuring.

⁵ Addition of equity equivalents to equity attributable to shareowners of The Coca-Cola Company.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of marketable securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Coca-Cola Co. invested capital increased from 2022 to 2023 and from 2023 to 2024.

Coca-Cola Co., cost of capital calculations

Dec 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	301,242)	301,242)	÷	342,006)	=	0.88	0.88	×	10.92%	=	9.61%
Debt³	39,551)	39,551)	÷	342,006)	=	0.12	0.12	×	3.44% × (1 – 21.00%)	=	0.31%
Operating lease liability⁴	1,213)	1,213)	÷	342,006)	=	0.00	0.00	×	3.70% × (1 – 21.00%)	=	0.01%
Total:	342,006)					1.00					9.94%

Based on: 10-K (reporting date: 2024-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	261,766)	261,766)	÷	301,130)	=	0.87	0.87	×	10.92%	=	9.49%
Debt³	38,002)	38,002)	÷	301,130)	=	0.13	0.13	×	3.59% × (1 – 21.00%)	=	0.36%
Operating lease liability⁴	1,362)	1,362)	÷	301,130)	=	0.00	0.00	×	3.40% × (1 – 21.00%)	=	0.01%
Total:	301,130)					1.00					9.86%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	258,736)	258,736)	÷	295,261)	=	0.88	0.88	×	10.92%	=	9.56%
Debt³	35,071)	35,071)	÷	295,261)	=	0.12	0.12	×	2.40% × (1 – 21.00%)	=	0.23%
Operating lease liability⁴	1,454)	1,454)	÷	295,261)	=	0.00	0.00	×	2.90% × (1 – 21.00%)	=	0.01%
Total:	295,261)					1.00					9.80%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	270,013)	270,013)	÷	315,102)	=	0.86	0.86	×	10.92%	=	9.35%
Debt³	43,618)	43,618)	÷	315,102)	=	0.14	0.14	×	1.61% × (1 – 21.00%)	=	0.18%
Operating lease liability⁴	1,471)	1,471)	÷	315,102)	=	0.00	0.00	×	2.70% × (1 – 21.00%)	=	0.01%
Total:	315,102)					1.00					9.54%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	216,198)	216,198)	÷	263,221)	=	0.82	0.82	×	10.92%	=	8.97%
Debt³	45,401)	45,401)	÷	263,221)	=	0.17	0.17	×	1.59% × (1 – 21.00%)	=	0.22%
Operating lease liability⁴	1,622)	1,622)	÷	263,221)	=	0.01	0.01	×	3.00% × (1 – 21.00%)	=	0.01%
Total:	263,221)					1.00					9.20%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Coca-Cola Co., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	2,313)	2,648)	2,283)	3,541)	1,689)
Invested capital²	86,857)	83,542)	79,959)	80,311)	75,674)
Performance Ratio
Economic spread ratio³	2.66%	3.17%	2.86%	4.41%	2.23%
Benchmarks
Economic Spread Ratio, Competitors⁴
Mondelēz International Inc.	0.05%	-0.11%	-3.91%	-0.91%	-2.06%
PepsiCo Inc.	5.53%	4.45%	4.43%	4.98%	3.64%
Philip Morris International Inc.	8.17%	8.80%	11.75%	25.93%	19.60%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,313 ÷ 86,857 = 2.66%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Coca-Cola Co. economic spread ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Coca-Cola Co., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	2,313)	2,648)	2,283)	3,541)	1,689)
Net operating revenues	47,061)	45,754)	43,004)	38,655)	33,014)
Performance Ratio
Economic profit margin²	4.91%	5.79%	5.31%	9.16%	5.12%
Benchmarks
Economic Profit Margin, Competitors³
Mondelēz International Inc.	0.09%	-0.18%	-7.93%	-1.94%	-4.75%
PepsiCo Inc.	4.61%	3.65%	3.56%	4.37%	3.63%
Philip Morris International Inc.	10.43%	12.87%	17.56%	24.16%	21.83%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Net operating revenues
= 100 × 2,313 ÷ 47,061 = 4.91%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Coca-Cola Co. economic profit margin improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Coca-Cola Co. (NYSE:KO)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin