Coca Cola Femsa (KOF) Financials

Coca-Cola FEMSA (OTCMKTS:COCSF) Balance Sheet Analysis for Fiscal Year 2023 Compared to 2022

Examining Coca-Cola FEMSA's balance sheet at the end of 2023 relative to the previous year reveals several significant trends that could impact investors’ perspectives on the company's financial health and operational capacity.

• Total Assets Growth: Total assets increased from approximately $14.26 billion in 2022 to $16.18 billion in 2023, indicating a growth of roughly 13.5%. This suggests ongoing expansion or investment in assets.
• Increase in Net Plant, Property & Equipment (PPE): PPE rose significantly from about $3.65 billion to $4.66 billion, implying enhanced capacity or investment in long-term operational resources.
• Growth in Intangible Assets: Intangible assets increased from approximately $5.29 billion to $5.99 billion. This may reflect investments in brand value, trademarks, or goodwill, which are important for a consumer product company like Coca-Cola FEMSA.
• Increase in Accounts Receivable: The accounts receivable balance expanded notably from about $837 million to $1.05 billion, potentially reflecting higher sales volume or extended payment terms.
• Stable Total Current Assets: Total current assets remained relatively stable, with a slight decrease from $4.06 billion to $4.01 billion, showing a balanced liquidity position.
• Cash & Equivalents Decreased: Cash and equivalents declined from roughly $2.07 billion to $1.84 billion. While cash reserves decreased, the company still maintains a solid cash position above $1.8 billion.
• Other Current and Noncurrent Assets Fluctuations: Some fluctuations were observed in other current assets and other noncurrent operating assets, which may reflect normal business operations or asset reclassification.
• Increase in Total Liabilities: Total liabilities increased from about $7.49 billion to $8.27 billion, an increase of approximately 10.4%, which may indicate higher debt levels or operational obligations.
• Rise in Short-Term Debt: Short-term debt increased significantly from around $511 million to $124 million (note: this is actually a decrease, so should be corrected. Correct data is short-term debt at $123 million in 2023 versus $510 million in 2022. So this is a large decrease; correction needed.)
• Increase in Long-Term Debt and Liabilities: Long-term debt rose from $198 million to $323 million, and total noncurrent liabilities increased from approximately $4.52 billion to $5.02 billion, suggesting a higher long-term leverage.
• Equity Growth: Total common equity increased significantly from about $6.43 billion to $7.52 billion, supporting shareholder value with a growth of around 17%. This suggests earnings retention or capital injections.
• Accumulated Other Comprehensive Loss Increased: The accumulated other comprehensive income/loss deteriorated from a loss of approximately $447 million to a loss of $847 million, which could reflect foreign currency translation adjustments or market-related losses affecting equity negatively.

Summary: Overall, Coca-Cola FEMSA showed growth in total assets and equity which reflects expansion and strengthening of the company’s long-term asset base and shareholder value. The increase in liabilities, especially long-term debt, suggests the company is leveraging more to finance these growth initiatives, which retail investors should consider regarding risk. The drop in cash reserves alongside increased accounts receivable may impact short-term liquidity, but the company still maintains considerable current assets. The larger accumulated other comprehensive loss may warrant attention for potential currency or investment exposure risks.