The Coca-Cola Company and PepsiCo, Inc.

Instructions Go to the Take Action! CD and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc.

(a) How much working capital do each of these companies have at the end of 2001? Comment on the appropriateness of the working capital they maintain.

(b) Compute both company’s

(a) current cash debt coverage ratio,

(b) cash debt coverage ratio,

(c) current ratio,

(d) acid-test ratio,

(e) receivable turnover ratio and

(f) inventory turnover ratio for 2001.

Comment on each company’s overall liquidity.

(c) In PepsiCo’s financial statements, it reports in the long-term debt section “short-term borrowings, reclassified.” How can short-term borrowings be classified as long-term debt?

(d) What types of loss or gain contingencies do these two companies have at December 31, 2001?