The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Selected data...
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The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Selected data from hypothetical consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc. are presented here (in millions). Total current assets Total current liabilities Net sales Cost of goods sold Net income Average (net) accounts receivable for the year Average inventories for the year Average total assets Average common stockholders' equity Average current liabilities Average total liabilities Total assets Total liabilities Coca-Cola $17,551 13,721 30,990 11,088 6,824 3,424 44,595 22,636 13,355 21,960 48,671 PepsiCo $12,571 23,872 8,756 Coca-Cola PepsiCo $2,271 $2,570 43,232 20,099 5,946 4,654 37,921 14,556 8,772 23,466 39,848 23,044 Compute the following liquidity ratios for Coca-Cola and for PepsiCo and comment on the relative liquidity of the two competitors. Assume all sales were on credit. (Round Current ratio to 2 decimal places, e.g. 1.67. Round all other 1 decimal place, e.g. 1.6, or 1.6%. Use 365 days for calculation.) (1) (2) (4) Liquidity Ratios (5) Current ratio (3) Average collection period Accounts receivable turnover Inventory turnover Days in inventory Coca-Cola :1 times days times days PepsiCo ti ti The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Selected data from hypothetical consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc. are presented here (in millions). Total current assets Total current liabilities Net sales Cost of goods sold Net income Average (net) accounts receivable for the year Average inventories for the year Average total assets Average common stockholders' equity Average current liabilities Average total liabilities Total assets Total liabilities Coca-Cola $17,551 13,721 30,990 11,088 6,824 3,424 44,595 22,636 13,355 21,960 48,671 PepsiCo $12,571 23,872 8,756 Coca-Cola PepsiCo $2,271 $2,570 43,232 20,099 5,946 4,654 37,921 14,556 8,772 23,466 39,848 23,044 Compute the following liquidity ratios for Coca-Cola and for PepsiCo and comment on the relative liquidity of the two competitors. Assume all sales were on credit. (Round Current ratio to 2 decimal places, e.g. 1.67. Round all other 1 decimal place, e.g. 1.6, or 1.6%. Use 365 days for calculation.) (1) (2) (4) Liquidity Ratios (5) Current ratio (3) Average collection period Accounts receivable turnover Inventory turnover Days in inventory Coca-Cola :1 times days times days PepsiCo ti ti
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Answer rating: 100% (QA)
To compute the liquidity ratios for CocaCola and PepsiCo we will use the following formulas 1 Current Ratio Current Ratio Total Current Assets Total Current Liabilities 2 Accounts Receivable Turnover ... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119493631
9th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Posted Date:
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