You are considering making a loan to The Coca-Cola Company. The following information is from the financial

Question:

You are considering making a loan to The Coca-Cola Company. The following information is from the included in Form 10-K for fiscal years 2013 and 2012 (in millions of dollars):
Net operating revenues for the year ended:
December 31, 2013 ...................................... $46,854
December 31, 2012 ..................................... 48,017
Trade less allowances
of $61, $53, and $83, respectively:
December 31, 2013 ...................................... 4,873
December 31, 2012 ..................................... 4,759
December 31, 2011 ..................................... 4,920
The following information is from the included in Form 10-K for fiscal years 2013 and 2012 for PepsiCo, Inc. (in millions of dollars):
Net revenue for the year ended:
December 28, 2013 .............................. $66,415
December 29, 2012 .............................. 65,492
Accounts and notes receivable, net:
December 28, 2013 ............................... 6,954
December 29, 2012 ............................... 7,041
December 31, 2011 ............................... 6,912
Part A. The Ratio Analysis Model
A lender must assess how well a company is managing its before making a loan. The turnover ratio tells us how many times in a year a company collects its receivables. Replicate the five steps in the Ratio Analysis Model on pages 332-333 to analyze the turnover ratios for The Coca-Cola Company and PepsiCo:
1. Formulate the Question
2. Gather the Information from the Calculate the Ratio
4. Compare the Ratio with Other Ratios
5. Interpret the Ratios
Part B. The Business Decision Model
A lender must consider a variety of factors, including financial ratios, before making a loan. Replicate the five steps in the Business Decision Model on page 333 to decide whether to loan money to The Coca-Cola Company:
1. Formulate the Question
2. Gather Information from the and Other Sources
3. Analyze the Information Gathered
4. Make the Decision
5. Monitor Your Decision
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