Need help with the following exercise 13-3:

Accounts Receivable and Inventory Analyses for Coca-Cola and PepsiCo

The following information was obtained from teh 2008 and 2007 financial stattements of Coca-Cola Company and Subsidiaries and PepsiCo Inc. and Subsidiaries. (Year-ends for PepsiCo are December 27, 2008, and Decembe 29, 2007.) Assume all sales are on credit for both companies.

(in millions) Coca-Cola PepsiCo

Accounts and notes 12/31/08 $3,090 $4,683

receivable, net*

12/31/07 3,317 4,389

Inventories 12/31/08 2,187 2,522

12/31/07 2,220 2,290

Net revenue** 2008 31,944 43,251

2007 28,857 39,474

Cost of goods sold*** 2008 11,374 20,351

2007 10,406 18,038

*Described as "trade accounts receivable, less allowances" by Coca-Cola.

**Described as "net operating revenues" by Coca-Cola.

***Described as "cost of sales" by PepsiCo.

REQUIRED

1. Using the information provided, compute the following for each company for 2008:

a. Accounts receivable turnover ratio

b. Number of days' sales in receivables

c. Inventory turnover ratio

d. Number of days' sales in inventory

e. Cash-to-cash operating cycle

2. Comment briefly on the liquidity of each of these two companies.