- Click here to refer the question information. Making Business Decisions: Analy
ID: 2492390 • Letter: #
Question
- Click here to refer the question information.
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):
Use the calculations from Step 4 to complete the statements below.
Coca-Cola accounts receivable turnover in 2011 has - Select your answer -declined had no change improved Item 1 from its 2010 turnover ratio.
PepsiCo's 2011 number of days' sales in receivables was days - Select your answer -less than more than the same as Item 3 the number of days in 2010.
Looking at 2010, the difference in turnover rate reveals that it took Coca-Cola almost days longer to collect its receivables that it took PepsiCo to collect theirs. Looking at 2011, Coca Cola's turnover rate is - Select your answer -higherlowerthe sameItem 5 as PepsiCo's 2011 ratio.
Instructions: Use the tabs above to navigate back and forth between steps.- Click here to refer the question information.
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):
Use the calculations from Step 4 to complete the statements below.
Coca-Cola accounts receivable turnover in 2011 has - Select your answer -declined had no change improved Item 1 from its 2010 turnover ratio.
PepsiCo's 2011 number of days' sales in receivables was days - Select your answer -less than more than the same as Item 3 the number of days in 2010.
Looking at 2010, the difference in turnover rate reveals that it took Coca-Cola almost days longer to collect its receivables that it took PepsiCo to collect theirs. Looking at 2011, Coca Cola's turnover rate is - Select your answer -higherlowerthe sameItem 5 as PepsiCo's 2011 ratio.
Explanation / Answer
Accounts receivable turnover = Net credit sales /average accounts receivable Coca Cola 2011 Accounts receivable turnpver = 46542 /( 4920 + 4430)/2 = 46542 / 4675 = 9.96 days number of days sales in receivable = 365/ Accounts receivable days = 365 / 9.96 = 36.65 2010 Accounts receivable turnpver = 35119 /( 4430 + 3758)/2 = 35119 / 4094 = 8.58 days number of days sales in receivable = 365/ Accounts receivable days = 365 / 8.58 = 42.54 Coca Cola accounts receivable turnover in 2011 has improved from its 2010 turnover ratio PepsiCo Inc 2011 Accounts receivable turnpver = 66504 /( 6912+ 6323)/2 = 66504/6617.5 = 10.05 days number of days sales in receivable = 365/ Accounts receivable days = 365 / 10.05 = 36.32 2010 Accounts receivable turnpver = 57838/( 6323 + 4624)/2 = 57838/5473.5 = 10.57 number of days sales in receivable = 365/ Accounts receivable days = 365 / 10.57 = 34.54 Pepsico 2011 number of days sales in receivables was days was more than number of days in 2010 Looking at 2010 , the the difference in turnover rate reveals that it took Coca Cola almost 8 days longer to collect its receivables than it took PepsiCo Looking at 2011 , the Cocacola 's turnover rate is lower than PepsiCo's 2011 ratio
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.