Comparative Analysis Case
The Coca Cola Company and PepsiCo, Inc.
Instructions
(a) What were the cash and cash equivalents reported by Coca Cola and PepsiCo at the end of 2009? What does each company classify as cash equivalents?
(b) What were the accounts receivable (net) for Coca Cola and PepsiCo at the end of 2009? Which company reports the greater allowance for doubtful accounts receivable (amount and percentage of gross receivable) at the end of 2009?
(c) Assuming that all “net operating revenues” (Coca Cola) and all “net sales” (PepsiCo) were net credit sales, compute the accounts receivable turnover ratio for 2009 for Coca Cola and PepsiCo; also compute the days outstanding for receivables. What is your evaluation of the difference?