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Coca-Cola Co.

, economic profit calculation


USD $ in millions

12 months ended Dec 31, 2018


Net operating profit after taxes (NOPAT) 6,685
Cost of capital 6.92%
Invested capital 68,598

Economic profit 1,937


Source: Based on data from Coca-Cola Co. Annual Reports

Source: https://www.stock-analysis-on.net
Copyright © 2019 Stock Analysis on Net

Economic profit = NOPAT – Cost of capital × Invested capital


= 6,685 – 6.92% × 68,598 = 1,937
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
-18 5,782 7,572 7,253
6.66% 6.62% 6.72% 6.71%
72,598 79,169 77,538 76,173

-4,851 541 2,358 2,139


Yea
Plant 1 Plant 2
r
1 $7,000 ###
2 $12,000 ###
3 $12,000 $7,000
4 $5,000 $5,000
5 $4,000 $4,000
Plant 1
Year 0 1 2 3 4 5 6
II ($30,000)
Positive CF $7,000 $12,000 $12,000 $5,000 $4,000 $2,000
Net CF ($30,000) $7,000 $12,000 $12,000 $5,000 $4,000 $2,000
Discount Rate 0 0.909 0.826 0.751 0.683 0.621 0.54
Present Value ($30,000) $6,363 $9,912 $9,012 $3,415 $2,484 $1,080
Discount Rate = 10%
NPV = $2,266
IRR = 2.80%

Payback Period - Plant 1


0 1 2 3 4 5 6
Cash Flow ($30,000) $7,000 $12,000 $12,000 $5,000 $4,000 $2,000
Cummulative CF ($30,000) ($23,000) ($11,000) $1,000 $6,000 $10,000 $12,000
Plant 2
Year 0 1 2 3 4 5 6
II ($40,000)
Positive CF $22,000 $12,000 $7,000 $5,000 $4,000 $3,000
Net CF ($40,000) $22,000 $12,000 $7,000 $5,000 $4,000 $3,000
Discount Rate 0 0.909 0.826 0.751 0.683 0.621 0.54
Present Value ($40,000) $19,998 $9,912 $5,257 $3,415 $2,484 $1,620
Discount Rate = 10%
NPV = $2,686
IRR = 3.13%

Payback Period - Plant 2


0 1 2 3 4 5 6
Cash Flow ($40,000) $22,000 $12,000 $7,000 $5,000 $4,000 $3,000
Cummulative CF ($40,000) ($18,000) ($6,000) $1,000 $6,000 $10,000 $13,000