Accounts Receivable Turnover for Coca-Cola and PepsiCo The following information was summarized from the 2008 annual report

Question:

Turnover for Coca-Cola and PepsiCo The following information was summarized from the 2008 annual report of The Coca-Cola Company:
(In millions)
Trade less allowances of $51 and $56, respectively
December 31, 2008 ........................$ 3,090
December 31, 2007 ...........................3,317
Net operating revenues for the year ended December 31:
2008 ..............................31,944
2007 ..............................28,857
The following information was summarized from the 2008 annual report of PepsiCo:
(In millions)
Accounts and notes receivable, net
December 27, 2008 ........................$ 4,683
December 29, 2007 ...........................4,389
Net revenue for the year ended:
December 27, 2008 .........................43,251
December 29, 2007 .........................39,474

Required
1. Calculate the turnover ratios for Coca-Cola and PepsiCo for 2008.
2. Calculate the average collection period, in days, for both companies for 2008. Comment on the reasonableness of the collection periods for these companies considering the nature of their business.
3. Which company appears to be performing better? What other information should you consider in determining how these companies are performing?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...