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Making Business Decisions: Analyzing The Coca-Cola Company's Accounts Receivable Turnover Ratio
You are considering making a loan to The Coca-Cola Company. The following information is from the financial statements included in Form 10-K for fiscal years 2011 and 2010 (in millions of dollars):
The following information is from the financial statements included in Form 10-K for fiscal years 2011 and 2010 for PepsiCo, Inc. (in millions of dollars):
The following information is from the financial statements included in Form 10-K for fiscal years 2011 and 2010 for The Coca-Cola Company and PepsiCo, Inc.:
Compute the average accounts receivable, accounts receivable turnover ratio and number of days' sales in receivables for Coca Cola and PepsiCo for the fiscal years 2011 and 2010. (Assume that all sales are credit sales. Enter amounts in millions of dollars. Assume a 360-day year in your computations. Round average accounts receivable to the nearest whole dollar and the ratios and days to one decimal place.)
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Making Business Decisions: Analyzing The Coca-Cola Company's Accounts Receivable Turnover Ratio
You are considering making a loan to The Coca-Cola Company. The following information is from the financial statements included in Form 10-K for fiscal years 2011 and 2010 (in millions of dollars):
The following information is from the financial statements included in Form 10-K for fiscal years 2011 and 2010 for PepsiCo, Inc. (in millions of dollars):
The following information is from the financial statements included in Form 10-K for fiscal years 2011 and 2010 for The Coca-Cola Company and PepsiCo, Inc.:
The Coca-Cola Company PepsiCo, Inc. 2011 Income Statement 2011 Income Statement 2011 Balance Sheet 2011 Balance Sheet 2010 Income Statement 2010 Income Statement 2010 Balance Sheet 2010 Balance SheetCompute the average accounts receivable, accounts receivable turnover ratio and number of days' sales in receivables for Coca Cola and PepsiCo for the fiscal years 2011 and 2010. (Assume that all sales are credit sales. Enter amounts in millions of dollars. Assume a 360-day year in your computations. Round average accounts receivable to the nearest whole dollar and the ratios and days to one decimal place.)
Coca Cola PepsiCo 2011 2010 2011 2010 Average accounts receivable $ $ $ $ Accounts receivable turnover ratio times times times times Number of days' sales in receivables days days days daysExplanation / Answer
Coca cola
Average Accounts Receivble =( beginning accounts receivsble + ending Accounts receivalbe ) /2
2010 = (3758+4430)/2 = $4094
2011 = (4430+4920)/2 = $4675
Accounts Receivable turover ratio 2010 =( Nt sales/Average accounts receivable) = 35119/4094 = 8.58%
Accounts Receivable turover ratio 2011 = 46542/4675 = 9.95%
Number of days sales in receivalbes = 360/AR turover ratio
2010 = 360/8.58 = 41.96 days
2011 = 360/9.95 = 36.18 days
Pepsico
Average Accounts Receivble =( beginning accounts receivsble + ending Accounts receivalbe ) /2
2010 = (4624+6323)/2 = $5474
2011 = (6323+6912)/2 = $6618
Accounts Receivalve turnover ratio = ( Nt sales/Average accounts receivable)
2010 = 57838/5474 = 10.57%
2011 = 66504/6618 = 10.05%
Number of days sales in receivable = 2010 = 360/10.57 = 34.06 day
2011 = 360/10.05 = 35.82 days
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