Coca-Cola's gross profit margin for the second quarter of its fiscal year 2012 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. Coca-Cola has weak liquidity. Currently, the Quick Ratio is 0.84 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.
During the same period, stockholders' equity ("net worth") has decreased by 8.17% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
The current P/E ratio indicates a discount compared to an average of 21.97 for the Beverages industry and a premium compared to the S&P 500 average of 16.49. For additional comparison, its price-to-book ratio of 5.35 indicates a significant premium versus the S&P 500 average of 2.28 and a discount versus the industry average of 5.75. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, Coca-Cola proves to trade at a discount to investment alternatives within the industry.