British

American Tobacco
1. Short-Term Solvency

LIQUIDITY RATIOS
0.78
0.80 0.71
0.70
0.60
0.50
0.38 0.41
0.40
0.30
0.20 0.14 0.16
0.10
0.00
Current Ratio Quick Ratios Cash Ratios
2019 0.71 0.38 0.14
2018 0.78 0.41 0.16
Column1

2019 2018

Current Ratio:
The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its
short-term obligations. So we can see company losses its ability in 2019 than 2018 to meet its short
term obligations. 2019 current ratio is 0.71 while in 2018 that was 0.78 times.

Quick Ratio:
It measures the ability of a company to use its near cash or quick assets to extinguish or retire its
current liabilities immediately. Company’s quick ratio in 2019 is 0.38 which less than 2018 and that
was 0.41 times.

Cash Ratio:
The cash ratio is a measurement of a company's liquidity, specifically the ratio of a company's total
cash and cash equivalents to its current liabilities. The cash ratio is almost like an indicator of a firm’s
value under the worst-case scenario. Company’s cash ratio in 2019 is 0.14 which is less than 2018
and it was 0.16.

2. Long-term Solvency
Total debt ratio:
The debt ratio is a financial ratio that measures the extent of a company’s leverage. The higher the
debt ratio, the more leveraged a company is, implying greater financial risk. At the same time,
leverage is an important tool that companies use to grow, and many businesses find sustainable uses
for debt. In British American Tobacco company has same debt ratio in both year 2019 and 2018. So
the leverage ratio is same.


Long Term Ratio

10.00

9.00

8.00
6.75
7.00
6.20
6.00
5.11
5.00 4.37

4.00

3.00
2.212.24
2.00
1.211.24
1.00 0.550.55

0.00
Total Debt Debt-equity Equity Time interest cash coverage
Ratio ratio multiplier earned ratio ratio
2019 0.55 1.21 2.21 4.37 6.20
2018 0.55 1.24 2.24 5.11 6.75
Column1

Debt-equity ratio:
The debt to equity ratio is a measure of a company's financial leverage, and it represents the amount
of debt and equity being used to finance a company's assets. We can see in 2018 which was 1.24 in
2019 it becomes 1.21. so, we can say that company may not be able to generate enough cash to
satisfy its debt obligations.

Equity multiplier:
The equity multiplier is a financial leverage ratio that measures the portion of company’s assets that
are financed by stockholder's equity. A higher equity multiplier number indicates that the debt
portion of total assets is increasing which translates to more financial leverage for the company.
Companies with a higher debt burden will have higher debt servicing costs which means that they
will have to generate more cash flows to sustain optimal operating conditions. Here we can see 2019
has 2.21 equity multiplier that’s less than 2018 2.24.

Time Interest earned ratio:

It measures how well a company has its interest obligations covered. So we can see in graph that
company lose its ability to cover its interest obligations in 2019 than 2018. In 2018 they have the
ratio 5.11 times which become 4.37 times in 2019.
Cash Coverage Ratio:
Coverage ratios come in several forms and can be used to help identify companies in a potentially
troubled financial situation, though low ratios are not necessarily an indication that a company is in
financial difficulty. Many factors go into determining these ratios and a deeper dive into a company's
financial statements is often recommended to ascertain a business's health. In 2019 they have 6.20

Turnover Ratios
2018 2019 Linear (2019) 2 per. Mov. Avg. (2018)

Capital intensity 5.98

5.45

Total Assets Turnover 0.17

0.18

Avg. Day sales A/R 52.74

56.94

A/R Turnover 6.83

6.32

Avg. Day sales inventory 477.02

494.44

Inventory Turnover 0.75

0.73
-100.00 0.00 100.00 200.00 300.00 400.00 500.00 600.00

Inventory Avg. Day sales Avg. Day sales Total Assets

A/R Turnover Capital intensity
Turnover inventory A/R Turnover
Column1
2018 0.75 477.02 6.83 52.74 0.17 5.98
2019 0.73 494.44 6.32 56.94 0.18 5.45

times while 2018 had 6.75 times.

3. Asset Utilization Ratios

Inventory Turnover:
The Inventory turnover is a measure of the number of times inventory is sold or used in a time
period such as a year. In 2019 inventory turnover is 0.73 times which is less than 2018 inventories
that was 0.73.

Average Day sales in inventory:

Number of days that elapsed between sale and cash collection has in increase in 2019 than 2018. In
2018 that was 477 days which is now 494 days.
Accounts Receivable Turnover:
They collect their outstanding credit accounts and lent the money again 6.32 times in 2019 which is
less than 2018 because in 2018 that was 6.83 times.

Average day sales in Receivable:

Number of days that elapsed between sale and cash collection has in increase in 2019 than 2018. In
2018 that was 52 days which is now 56 days.

Total Assets Turnover:

It measures the efficiency of a company's use of its assets in generating sales revenue. In this graph
we can see company is using its asset more in 2019 to generate sales which is 0.18 times and its
higher than 2018 which is 0.17 times.

Capital intensity:

Profitability Ratios
35.00%

30.00%

25.00% Profit Margin, 24.63%

Profit Margin, 22.04%
20.00%

15.00%

10.00% ROE, 9.22%

ROE, 8.93%

5.00%
4.12%
ROA, 4.05%
ROA,

0.00%

-5.00%
Profit Margin ROA ROE
2019 22.04% 4.05% 8.93%
2018 24.63% 4.12% 9.22%
Column1

2019 2018

The term "capital intensive" refers to business processes or industries that require large amounts of
investment to produce a good or service and thus have a high percentage of fixed assets, such as
property, plant, and equipment (PP&E). Companies in capital-intensive industries are often marked
by high levels of depreciation. Here capital intensity of the company is 2019 is 5.45 which is less than
2018 is 5.98.

4. Profitability Ratios



Profit Margin:
In 2019 British American Tobacco had less than 22.04% in net income for every dollar in sales which
is less than 2018. In 2018 they earn less than 24.63% in net income for every dollar in sales.

Return on Assets (ROA)

British American Tobacco earn more money on its investment than it payout to its creditors which is
4.05% in 2019 and it is less than 2018 which is 4.12%.

Liquidity Ratio
1.40

1.20 1.14
1.03
1.00
0.76
0.80
0.63
0.59
0.60
0.41
0.40

0.20

0.00
Current Ratio Quick Ratio Cash Ratio
2019 0.76 0.63 0.41
2018 1.14 1.03 0.59
Column1

2019 2018 Linear (2019) 2 per. Mov. Avg. (2018)

Return on Equity:
Stockholders are fared less in 2019 than 2018. In 2018 their ROE was 8.93% which decreases to
9.22% in 2019.

The Coca-Cola Company

5. Short-Term Solvency

Current Ratio:
The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its
short-term obligations. So we can see company losses its ability in 2019 than 2018 to meet its short
term obligations. 2019 current ratio is 0.76 while in 2018 that was 1.14 times.
Quick Ratio:

Financial Leverage

13.84
14.00

12.00 11.40
11.27
10.00 9.09
8.00
4.90
6.00 3.90 4.55
3.55
4.00
0.80
2.00 0.78

0.00
TOTAL DEBT DEBT-EQUITY EQUITY TIME INTEREST CASH COVERAGE
RATIO RATIO MULTIPLIER EARNED RATIO RATIO

Time Interest
Total Debt Ratio Debt-Equity ratio Equity multiplier Cash coverage ratio
earned ratio
2019 0.78 3.55 4.55 11.40 13.84
2018 0.80 3.90 4.90 9.09 11.27
Column1

2019 2018

It measures the ability of a company to use its near cash or quick assets to extinguish or retire its
current liabilities immediately. Company’s quick ratio in 2019 is 0.63 which less than 2018 and that
was 1.03times.

Cash Ratio:
The cash ratio is a measurement of a company's liquidity, specifically the ratio of a company's total
cash and cash equivalents to its current liabilities. The cash ratio is almost like an indicator of a firm’s
value under the worst-case scenario. Company’s cash ratio in 2019 is 0.41 which is less than 2018
and it was 0.59.

6. Long Term Solvency

Total debt ratio:

The debt ratio is a financial ratio that measures the extent of a company’s leverage. The higher the
debt ratio, the more leveraged a company is, implying greater financial risk. At the same time,
leverage is an important tool that companies use to grow, and many businesses find sustainable uses
for debt. In Coca-Cola company has less debt ratio in year 2019 than 2018. In 2019 they had 0.78 and
2018 had 0.80 ratio.
Debt-equity ratio:
The debt to equity ratio is a measure of a company's financial leverage, and it represents the amount
of debt and equity being used to finance a company's assets. We can see in 2018 which was 3.90in
2019 it becomes 3.55. so, we can say that company may not be able to generate enough cash to
satisfy its debt obligations.

Equity multiplier:
The equity multiplier is a financial leverage ratio that measures the portion of company’s assets that
are financed by stockholder's equity. A higher equity multiplier number indicates that the debt
portion of total assets is increasing which translates to more financial leverage for the company.
Companies with a higher debt burden will have higher debt servicing costs which means that they
will have to generate more cash flows to sustain optimal operating conditions. Here we can see 2019
has 4.55 equity multiplier that’s less than 2018 4.90.

Time Interest earned ratio:

It measures how well a company has its interest obligations covered. So we can see in graph that
company lose its ability to cover its interest obligations in 2019 than 2018. In 2018 they have the
ratio 9.09 times which become 11.40 times in 2019.

Cash Coverage Ratio:

Coverage ratios come in several forms and can be used to help identify companies in a potentially
troubled financial situation, though low ratios are not necessarily an indication that a company is in
financial difficulty. Many factors go into determining these ratios and a deeper dive into a company's
financial statements is often recommended to ascertain a business's health. In 2019 they have 13.84
times while 2018 had 11.27 times.
 7. Assets Utilization

Inventory Turnover:
The Inventory turnover is a measure of the number of times inventory is sold or used in a time
period such as a year. In 2019 inventory turnover is 4.33 times which is less than 2018 inventories
that was 4.26.

Average Day sales in inventory:

Number of days that elapsed between sale and cash collection has in increase in 2019 than 2018. In
2018 that was 83 days which is now 84 days.

Accounts Receivable Turnover:

They collect their outstanding credit accounts and lent the money again 9.38 times in 2019 which is
as same than 2018 because in 2018 that was 9.38 times.

Turnover Ratios
90.00
83.2184.60
80.00

70.00

60.00

50.00
38.3638.38
40.00

30.00

20.00
9.38 9.38
10.00 4.33 4.26
0.43 0.38 2.32 2.61

0.00
INVENTORY DAYS SALES ACCOUNTS DAYS SALES TOTAL CAPITAL
TURNOVER IN RECEIVABLE IN ASSETS INTENSITY
INVENTORY TURNOVER RECEIVABLE TURNOVER

Accounts
Inventory Days sales in Days sales in Total assets
receivable Capital intensity
Turnover inventory receivable turnover
Turnover
2019 4.33 83.21 9.38 38.36 0.43 2.32
2018 4.26 84.60 9.38 38.38 0.38 2.61
Column1

2019 2018
Average day sales in Receivable:
Number of days that elapsed between sale and cash collection has same in 2019 than 2018. In 2018

Chart Title
46.99%
50.00%
40.00% 37.89%
23.94% 20.20%
30.00% 7.73%
10.33%
20.00%
10.00%
0.00%
PROFIT MARGIN ROA ROE

Profit Margin ROA ROE

2019 23.94% 10.33% 46.99%
2018 20.20% 7.73% 37.89%
Column1

2019 2018

that was 38 days which is now 38 days.

Total Assets Turnover:

It measures the efficiency of a company's use of its assets in generating sales revenue. In this graph
we can see company is using its asset more in 2019 to generate sales which is 0.43 times and its
higher than 2018 which is 0.38 times.

Capital intensity:
The term "capital intensive" refers to business processes or industries that require large amounts of
investment to produce a good or service and thus have a high percentage of fixed assets, such as
property, plant, and equipment (PP&E). Companies in capital-intensive industries are often marked
by high levels of depreciation. Here capital intensity of the company is 2019 is 2.32 which is less than
2018 is 2.61.

8. Profitability Ratios

Profit Margin:
In 2019 The Coca-Cola Company had less than 23.94% in net income for every dollar in sales which is
higher than 2018. In 2018 they earn less than 20.20% in net income for every dollar in sales.

Return on Assets (ROA)

Coca-Cola Company earn more money on its investment than it payout to its creditors which is
10.33% in 2019 and it is higher than 2018 which is 7.73%.
Return on Equity:
Stockholders are fared higher in 2019 than 2018. In 2018 their ROE was 37.89% which increases to
46.99% in 2019.