The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online.

Instructions

Use the companies’ financial information to answer the following questions.

a. What is the amount of inventory reported by Coca-Cola at December 31, 2017, and by PepsiCo at December 31, 2017? What percent of total assets is invested in inventory by each company?

b. What inventory costing methods are used by Coca-Cola and PepsiCo? How does each company value its inventories?

c. In the notes, what classifications (description) are used by Coca-Cola and PepsiCo to categorize their inventories?

d. Compute and compare the inventory turnovers and days to sell inventory for Coca-Cola and PepsiCo for 2017. Indicate why there might be a significant difference between the two companies.