Exhibit 5.16 presents risk ratios for Coca-Cola for Year 1 through Year 3.

REQUIRED
a. Assess the changes in the short-term liquidity risk of Coca-Cola between Year 1 and Year 3.
b. Assess the changes in the long-term solvency risk of Coca-Cola between Year 1 and Year 3.

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Exhibit 5.16 Risk Ratios for Coca-Cola (Problem 5.15) Year 3 Year 1 Year 2 0.9 0.6 Current ratio 0.9 0.9 Quick ratio 0.6 0.6 Operating cash flow to current liabilities ratio Days accounts receivable outstanding Days inventory held Days accounts payable outstanding Net days of working capital financing needed 0.578 0.647 0.636 37 37 37 71 68 68 44 38 40 64 67 65 Liabilities to assets ratio 0.495 0.497 0.435 Liabilities to shareholders' equity ratio Long-term debt to long-term capital ratio Long-term debt to shareholders' equity ratio Operating cash flow to average total liabilities ratio Interest coverage ratio 0.979 0.990 0.771 0.120 0.131 0.072 0.136 0.151 0.078 0.364 0.414 0.456 17.0 17.3 29.9