Liquidity Analyses for Coca-Cola and PepsiCo The following information was summarized from the balance sheets of the Coca-Cola Company and Subsidiaries at December 31, 2006, and PepsiCo Inc. and Subsidiaries at December 30, 2006:

Required 1. Using the information provided, compute the following for each company at the end of 2006:

a. Current ratio

b. Quick ratio 2. Comment briefly on the liquidity of each of these two companies. Which appears to be more liquid?
3. What other ratios would help you more fully assess the liquidity of these companies?

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(in millions) Coca-Cola PepsiCo Cash and cash equivalents $2,440 $1,651 Short-term investments/marketable securities 150 1,171 Accounts and notes receivables, net* 2,587 3,725 Inventories 1,641 1,926 Prepaid expenses and other current assets 1,623 657 Total current assets $8,441 $9,130 Current liabilities $8,890 $6,860 *Described as "trade accounts receivable, less allowances" by Coca-Cola.