KO — Coca-Cola Co.

Will it survive?

• Can it pay its interest? 8.3×
  Comfortable
  Operating income $13.8B ÷ interest expense $1.7B

  Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient — it says solvent, not cheap.

• How heavy is the debt? 2.7×
  Moderate
  Total debt $37.5B ÷ operating income $13.8B

  Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.

• How long is cash tied up? —
  Not enough data

  The filing data didn't include the inputs for this check.

Is it a good business?

• Return on invested capital 19%
  High
  NOPAT $11.3B ÷ invested capital $59.4B (debt + equity − cash)

  The rate the business earns on the money tied up in it — Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high — pair this with Owner Earnings.

• Owner Earnings (free cash) margin 11%
  Solid
  Owner Earnings $5.3B = operating cash $7.4B − capex $2.1B

  What an owner could take out without starving the business. That's 11% of revenue. Treating stock comp as the real expense it is (less $279M of SBC) leaves $5.0B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).

• Are earnings backed by cash? 0.57×
  Thinly cash-backed
  Cash from ops $7.4B ÷ net income $13.1B

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy — growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 180%
  Returns most of it
  Dividends + buybacks $9.5B ÷ Owner Earnings $5.3B

  Of $5.3B Owner Earnings, $9.5B (180%) went back to shareholders — $8.8B dividends, $746M buybacks. Net of $279M stock comp, the real buyback was about $467M. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway — or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 2.01×
  Expanding
  Capex $2.1B ÷ depreciation $1.1B

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth — or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency — or a melting asset base). The ratio won't tell you which; the filings will.

Durability — 2018–2025

A moat is high return that doesn’t fade. Here are the quality metrics across a full cycle — judge the consistency, not the latest dot.

• Return on invested capital ≥15% in 5 of 6 years
  17%
• Operating margin
  29%
• Owner Earnings margin
  11%