CCK Beverage Company and Cola Incorporated are two of the largest and most successful beverage companies in
Question:
CCK Beverage Company and Cola Incorporated are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions).
CCK Beverage Company Cola Incorporated
Fiscal Year Ended: 2018 2017 2016 2018 2017 2016
Net Sales $ 44,600 $ 49,470 $ 50,080 $ 90,789 $ 91,300 $ 75,110
Accounts Receivable 4,630 4,960 5,180 8,650 8,550 8,170
Allowance for Doubtful Accounts 670 660 650 100 130 140
Accounts Receivable, Net of Allowance 3,960 4,300 4,530 8,550 8,420 8,030
Required:
1. Calculate the receivables turnover ratios and days to collect for CCK Beverage Company and Cola Incorporated for 2018 and 2017.
2-a. Which of the companies was quicker to convert its receivables into cash in 2018?
2-b. Which of the companies was quicker to convert its receivables into cash in 2017?
Fundamentals of Financial Accounting
ISBN: 978-0078025372
4th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby