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The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies

Question:

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. How much working capital do each of these companies have at the end of 2017?

b. Compute each company’s (a) current cash debt coverage, (b) cash debt coverage, (c) current ratio, (d) acid-test ratio, (e) accounts receivable turnover, and (f) inventory turnover for 2017. Comment on each company’s overall liquidity.

c. What types of loss or gain contingencies do these two companies have at the end of 2017?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... 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...
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a The working capital position of the two companies is as follows millions PepsiCo Inc Current assets 31027 Current liabilities 20502 Working capital 10525 The CocaCola Company Current assets 36545 Cu...View the full answer


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Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.

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