PROBLEM 7-3: ACCOUNTS RECEIVABLE TURNOVER FOR COCA-COLA AND PEPSICO
	Instructions: Refer to your textbook if necessary to complete to this problem.
	The following information was summarized from the 2010 annual report of The Coca-Cola Company:
		(in Millions)
	Trade accounts receivable, less allowances of $48 and $55, respectively
	December 31, 2010	4,430	212,640
	December 31, 2009	3,758	206,690
	Net operating revenues for the year ended December 31:		419,330
	2010	35,119	209,665
	2009	30,990
	The following information was summarized from the 2010 annual report of PepsiCo:
		(in Millions)
	Accounts and notes receivable, net
	December 25, 2010	6,323
	December 26, 2009	4,624
	Net revenue for the year ended:
	December 25, 2010	57,838
	December 26, 2009	43,232
Required:
1. Calculate the accounts receivable turnover ratios for Coca-Cola and PepsiCo for 2010.
	Formula	Calculation
Coca-Cola	Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable	C
Pepsi	Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable	C
2. Calculate the average collection period, in days, for both companies for 2010. Comment on the reasonableness of the collection periods for these companies considering the nature of their business.
Coca-Cola	T	C	TIP: Use 360 days
Pepsi	T	C
T
3. Which company appears to be performing better? What other information should you consider in determining how these companies are performing?
T