Question

Expand Your Critical Thinking 9-3 (Part Level Submission) The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Suppose selected data from recent consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc. are presented here (in millions). Coca-Cola PepsiCo Total current assets $17,551 $12,571 Total current liabilities 13,721 8,756 Net sales 30,990 43,232 Cost of goods sold 11,088 20,099 Net income 6,824 5,946 Average (net) accounts receivable for the year 3,424 4,654 Average inventories for the year 2,271 2,570 Average total assets 44,595 37,921 Average common stockholders’ equity 22,636 14,556 Average current liabilities 13,355 8,772 Average total liabilities 21,960 23,466 Total assets 48,671 39,848 Total liabilities 23,872 23,044 Income taxes 2,040 2,100 Interest expense 355 397 Net cash provided by operating activities 8,186 6,796 Capital expenditures 1,993 2,128 Cash dividends 3,800 2,732

(a1) Compute the following liquidity ratios for Coca-Cola and for PepsiCo. (Round current ratio to 2 decimal places, e.g. 6.25 and all other answers to 1 decimal place, e.g. 15.1.) Coca-Cola PepsiCo (1) Current ratio : 1 : 1 (2) Accounts receivable turnover times times (3) Average collection period days days (4) Inventory turnover times times (5) Days in inventory days days Click if you would like to Show Work for this question:

Answer 1

(a1)

Compute the following liquidity ratios for Coca-Cola and for PepsiCo. (Round current ratio to 2 decimal places, e.g. 6.25 and all other answers to 1 decimal place, e.g. 15.1.)

				Coca-Cola			PepsiCo
(1)		Current ratio		17551/13721	1.28: 1		12571/8756	1.44: 1
(2)		Accounts receivable turnover		30990/3424	9.1 times		43232/4654	9.3 times
(3)		Average collection period		365/9.1	40.1 days		365/9.3	39.2 days
(4)		Inventory turnover		11088/2271	4.9 times		20099/2570	7.8 times
(5)		Days in inventory		365/4.9	74.5 days		365/7.8	46.8 days

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