Accounts Receivable Turnover for Coca-Cola and PepsiCo The following information was summarized from the 2008 annual report of The Coca-Cola Company:

(In millions)

Trade accounts receivable, less allowances of $51 and $56, respectively December 31, 2008 $ 3,090 December 31, 2007 3,317 Net operating revenues for the year ended December 31:

2008 31,944 2007 28,857 The following information was summarized from the 2008 annual report of PepsiCo:

(In millions)

Accounts and notes receivable, net December 27, 2008 $ 4,683 December 29, 2007 4,389 Net revenue for the year ended:

December 27, 2008 43,251 December 29, 2007 39,474 Required 1. Calculate the accounts receivable turnover ratios for Coca-Cola and PepsiCo for 2008.

2. Calculate the average collection period, in days, for both companies for 2008. Comment on the reasonableness of the collection periods for these companies considering the nature of their business.

3. Which company appears to be performing better? What other information should you consider in determining how these companies are performing?

AppendixLO1