The Coca-Cola Company and PepsiCo, Inc. The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies complete annual reports, including the notes to the financial statements, are available online. Instructions Use the companies financial information to answer the following questions.

a. What were the cash and cash equivalents reported by Coca-Cola and PepsiCo at the end of 2017? What does each company classify as cash equivalents?

b. What were the accounts receivable (net) for Coca-Cola and PepsiCo at the end of 2017? Which company reports the greater allowance for doubtful accounts (amount and percentage of gross receivable) at the end of 2017?

c. Assuming that all net operating revenues (Coca-Cola) and all net revenues (PepsiCo) were net credit sales, compute the accounts receivable turnover for 2017 for Coca-Cola and PepsiCo; also compute the days outstanding for receivables. What is your evaluation of the difference?

Please show all computations.

Specimen Financial Statements: The Coca-Cola Company The Coca-Cola Company is the world's largest beverage company. It owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages, but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready to-drink teas and coffees, and energy and sports drinks. Finished beverage products bearing Coca-Cola trademarks sold in the United States since 1886, are now available in more than 200 countries. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME 2017 2016 2015 $41,863 16 465 25.198 15.262 1,510 8.626 Year Ended December 11, (En millions except per share data) NET OPERATING REVENUES Cost of goods told GROSS PROFIT Selling general and administrative expenses Other operating charges OPERATING INCOME Interest income Interest expense Equity income (loss-net Other income (los) et INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Income taxes from continuing operations NET INCOME FROM CONTINUING OPERATIONS Income from discontinued operations (net of income taxes of $4750 and Sorespectively CONSOLIDATED NET INCOME Less: Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY $35.410 13.256 22.154 12.49 2,157 7.501 677 841 1,071 (1.666) 6.742 5.560 -1,183 101 1,283 35 544.294 17.482 26,812 16,427 1.657 8,725 613 856 89 631 9,605 2.239 7,366 733 835 (12) W.136 1,586 6.550 6.550 7366 15 $ 1.34s 56.517 57.151 Basic net income per share from continuing operations! $ 35 $ 1.53 5 1.09 Basie net income per share from discontinued operations 0.02 BASIC NET INCOME PER SHARE $ 0.29 5 1:51 5 1.69 Diluted net income per share from continuing operations $ 0.27 $ 149 $ 0.67 Diluted net income per share from discontinued operations! 0.02 DILUTED NET INCOME PER SHARE 50.29 $ 149 5 1.67 AVERAGE SHARES OUTSTANDING - BASIC 4272 4317 4,352 Effect of dilutive securities 52 50 53 AVERAGE SHARES OUTSTANDING - DILUTED 4.324 167 4405 Calculated based co net income from coming operatione income truperture to trolling interests Calculated based on nel come from discontinued operations is set income from desperate with able to coming interest Per share or add der to runding Refer to Notes to Consolidated Financial Statements DIGIENA THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2013 US $1.306 Year Ended December da mi CONSOLIDATED NET INCOME Other comprehensive income Net foreign currency translation met Net saindow) onderratives Necu realized (losa) on available for sale securities Net change in pension and other benefit liabilities TOTAL COMPREHENSIVE INCOME (LOSS) Les Comprehensive income dow) butable to no controlling interests TOTAL COMPREHENSIVE INCOME (OSS) ATTRIBUTABLE TO SHARE OWNERS OF THE COCA-COLA COMPANY 6690 14 19 302 531 306 10 73 5214854955 2054 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS 16 5355 15.15 5.317 ISO 4,051 3.56 2675 2655 219 7.329 36545 20.656 1.07 4.560 34.010 16.200 90 10.635 BOUT 6,720 136 1,401 36 19 726 STO December 31 Inmiw ASSETS CURRUNT ASSETS Cash and casheets Short-term investments TOTAL CASH CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Marketable securities Trades receivable, ten allowances of 5477 and 5466. respectively Inventories Prepaid expenses and other net Awes before Assets held for discontideperations TOTAL CURRENT ASSETS EQUITY METROD INVESTMENTS OTHER INVESTMENTS OTHER ASSETS PROPERTY,PLANT AND EQUIPMENT - net TRADEMARKS WITH INDEFINITE LIVES TOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES GOODWILL OTHER INTANGIBLE ASSETS TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses Loans and notes pagable Current mattis of long-term deb Accrued income Liabilities held for sale Labrities held for sale - discontinued operations TOTAL CURRENT LIABILITIES LONG-TERM DEBT OTHER LIABILITIES DEFERRED INCOME TAXES THE COCA-COLA COMPANY SHAREOWNERS EQUITY Com ock, 0.33 par value. Authorised - 11.200 shares Issued-1000 and 70 shares respectively Capital plus Reisesed earnings Accumulated other comprehensive scene om Treasurystock.co -2.781 and 2.252 shares. Lespectives EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY EQUITY ATTRIBUTARILE TO NONCONTROLLING INTERESTS TOTAL EQUITY TOTAL LIABILITIES AND EQUITY 51745 13.205 59,490 12/495 3327 307 710 410 37 1. 26 3.1KB 021 401 3,255 1.760 15.8654 0.430 10.305 150,677) 17.072 1.05 1.760 14.99 fi (11.30 (873 21.06 15 2330 51220 IR TT $ THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS 2017 2016 2015 $ 6,550 $ 7,366 $ 1,283 (101) 1,182 1.260 219 (1.256) (628) 281 1,459 1,218 (269) 3.529 6,995 6.550 1,787 258 (856) (449) 158 1,146 647 (224) (221) 8,796 7,366 1,970 236 73 (122) (137) (374) 929 744 (157) 10.528 (16,520) 15.911 (3.900) (15,499) 16,624 (838) (15.831) 14.079 (2.491 1,035 Year Ended December 31, (In millions) OPERATING ACTIVITIES Consolidated net income (Income) loss from discontinued operations Net income from continuing operations Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss-net of dividends Foreign currency adjustments Significant (gains) losses on sales of assets-net Other operating charges Other items Net change in operating assets and liabilities Net cash provided by operating activities INVESTING ACTIVITIES Purchases of investments Proceeds from disposals of investments Acquisitions or businesses, equity method investments and nonmarketable securities Proceeds from disposals of businesses, equity method investments and nonmarketable securities Purchases of property, plant and equipment Proceeds from disposals of property, plant and equipment Other investing activities Net cash provided by (used in) investing activities FINANCING ACTIVITIES Issuances of debt Payments of debt Issuances of stock Purchases of stock for treasury Dividends Other financing activities Net cash provided by (used in financing activities CASH FLOWS FROM DISCONTINUED OPERATIONS Net cash provided by used in operating activities from discontinued operations Net cash provided by (used in) investing activities from discontinued operations Net cash provided by used in) financing activities from discontinued operations Net cash provided by (used in) discontinued operations EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS Net increase (decrease) during the year Balance at beginning of year Balance at end of year (2.262) 3,821 (1.675) 104 (126) (2,385) 150 565 (2.553) 85 (40) (6.186 (209) (999) 29,857 (28,768) 1,595 (3,682) (6.320) (91) (7.409) 27.281 (25,615) 1,434 (3.681) (6.043) 79 (6.545) 40.434 (37.738) 1.245 (3.564) (5.741) 251 (5.113) (65) (38) 8 242 (6) (878) (2,549) 8,555 $ 6,006 1.246 7,309 $ 8.555 (1,649) 8958 $ 7.309 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY 2015 2017 2016 4.288 4,124 53 50 (82) (86) 4,259 4.288 $ 1.760 1.760 4.366 44 (86) 4.324 S 1.760 14,993 655 13.154 532 14,016 589 130 258 236 219 (3) 15.864 14,993 14,016 Year Ended December 31 (In millions except per share data) EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY NUMBER OF COMMON SHARES OUTSTANDING Balance at beginning of year Treasury stock issued to employees related to stock compensation plans Purchases of stock for treasury Balance at end of year COMMON STOCK CAPITAL SURPLUS Balance at beginning of year Stock issued to employees related to stock compensation plans Tax benefit (charge) from stock compensation plans Stock-based compensation expense Other activities Balance at end of year REINVESTED EARNINGS Balance at beginning of year Nel income attributable to shareowners of The Coca-Cola Company Dividends (per share-148, S1.40 and 81 32 in 2017. 2016 and 2015, respectively Balance at end of year ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Balance at beginning of year Net other comprehensive income (box) Balance at end of year TREASURY STOCK Balance at beginning of year Treasury stock issued to employees related to stock compensation plans Purchases of stock for treasury Balance at end of year TOTAL EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS Balance at beginning of year Nel income attributable to noncontrolling interests Net foreign currency translation adjustment Dividends paid to noncontrolling interest Contributions by noncontrolling interests Business combinations Deconsolidation of certain entities Other activities TOTAL EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS 65,502 1.248 (6,320) 60,430 65,018 6,527 (6,043) 65.502 63.408 7,351 5.741) 65.018 (11,205) 200 (10,405) (10.174) (1.031) (11.205) (5.777) (4,397) (10.174) (47.988) (45.066) 209 811 (3.598) (3.733) (50,677) (47.988) $ 17,072 S 23/2 (42.225 696 13.537 (45,066) 5 25,554 5 158 $ 35 38 (15) 210 21 (13) (25) 1 241 15 (18) 15 1,805 (157) 41 $ 1,905 (4) 158 S 210 Specimen Financial Statements: PepsiCo, Inc. Pepsico, Inc. is a leading global food and beverage company with a complementary portfolio of enjoyable brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker, and Tropicana. Through its operations, authorized bottlers, contract manufacturers, and other third parties, PepsiCo makes, markets, distributes, and sells a wide variety of convenient and enjoyable beverages, foods, and snacks, serving customers and consumers in more than 200 countries and territories. Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 27, 2017 December 28, 2016 and December 29, 2015 in millions except per share amounts) $ 2017 63.5255 28,785 34,740 34.231 2016 62.7995 28,209 34.590 24.805 Net Revenge Cost of sales Gross profit Selling general and administrative expenses Vencruela pairment charges Operating Profit Interest expense Interest income and other Income before income taxes Provision for Income taxes (See Note 5) Net income Less: Net income attributable to doncontrolling interests Net Income Attributable to lepsiCo Net Income Attributable to PepsiCo per Common Share Basic Diluted Weighted average common shares outstanding Basic Diluted Cash dividends declared per common share 10.509 11.151) 244 9,602 4,694 4,90 51 4.8375 9.785 (1342) 110 8.553 2.174 6,379 50 6,3295 2015 63,056 28.731 34 325 24,613 1.359 8.353 (070) 59 7,442 1.941 5.501 49 3,452 $ 4.95 3.71 s $ 3.40 $ 3.38 S 4.36 $ 3.67 1.425 1.43 3.1675 1.439 1.452 1,469 1485 2.7625 2.96 S Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 2017 December 31, 2016 and December 26, 2015 (in millions 2017 4,908 5 2016 6.3795 2015 5.501 Net income Other comprehensive income/loss), net of taxes Net currency translation adjustment Net change on cash flow hedges Net pension and retiree medical adjustments Nel change on securities Other (302) 46 (316) (24) 2.827) 3 171 1 1.109 (M) (159) (68) 16 862 5,770 (51) 5,719 $ Comprehensive income Comprehensive income attributable to noncontrolling interests Comprehensive Income Attributable to PepsiCo (596) 5,783 (54) 5,7295 12,652 2,849 447) 2.802 See accompanying notes to the consolidated financial statements D Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 2017 December 31, 2016 and December 26, 2015 (in millions) $ 501 205 500 1:39 461 200) 03 04 34 30 Operating Acties Net Deput Sharpen peme Recurg dipament des Cahay caring Charpeetto Tips Veendamment charge Pemical pilipe Pin and retiremedical placebom Iedere comes i durende PropheTOSA Chain and A se ev Prepaileander Ayable and earli Income espe Othere Nd Coh Proided by Operating Achien Investing Adivities Capital pending Sales property, plant Aagaai niruren in tam Refcash darso Verde demolidon Divers Shore by mily Martnershurthaas More that the mom More than three monteales Three months Oueriment Net Cash Used for foresting Active 35 10:56 56 $12 CS 14 411 1 3 a. 7.30 7 A 40 15 1503 (449 Financing Activities Prends from now of item.de Payment of indebe Debrations Shes borowing, by originality Morten e proced More than one month Three month or Canh didendapat Share purchases.com Share purchwefered Proceeds from emises of socks Witholling to pay ORSOL PSU and PEP covered Other facing Net Cu for loancing Activities Elletof exchange rate changes chances Net Income in Cash and Cash Equivalents Caband Cash Equivalents, Beginning of Year Cash and Cash Equales, End of Year 5 (T) 55 30 440 .. 15 SO4 (131 533 (145 2 5134 Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries December 30, 2017 and December 31, 2016 (in millions except per share amounts) finalista medie de tikai 2017 2016 S ASSETS Current Assets Cash and cash equivalents Short-term investments Accounts and notes receivable, et Inventories Prepaid expenses and other current assets Total Current Assets Property, Plant and Equipment, net Amortizable Intangible Assets.net Goodwill Other nonamortizable intangible assets Nonamortizable Intangible Assets Investments in Noncontrolled Amates Other Assets Total Assets 10,610 8.900 7,024 2.947 1.546 31.027 17.240 1.268 14,744 12.570 27.314 2.042 913 79,804 9.158 6,967 6,694 2.723 908 26,450 16.391 1.237 14430 12.196 26,626 1.950 636 73.490 S 5,485 15,017 20,502 33.796 11,283 3.242 68,823 6,892 14.245 21.135 30.053 6.669 4,434 62.291 LIABILITIES AND EQUITY Current Liabilities Short-term debt obligations Accounts payable and other current liabilities Total Current Liabilities Long-Term Debt Obligations Other Liabilities Deferred Income Taxes Total Liabilities Commitments and contingencies Preferred Stock, no par value Repurchased Preferred Stock PepsiCo Common Shareholders' Equity Common stock, par value 1% per share (authorized 3.600 shares, issued, net of repurchased common stock at par value. 1.420 and 1,428 shares, respectively) Capital in excess of par value Retained camings Accumulated other comprehensive loss Repurchased common stock, in excess of par valuc (446 and 438 shares, respectively) Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity 41 (197) 41 (192) 24 24 3.996 52.839 (13,057) (32.757) 11,045 92 10,981 79.804 4,091 52,518 (13.919) (31.468) 11.246 104 11.199 73.490 $ S See accompanying notes to the consolidated financial statements, Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 2017 December 31, 2016 and December 26, 2015 (in millions JOT 2015 2016 A Wh Am 5 41 Shares 35 TI 41 03 073 1071 (1981 15 13 10 1971 10.71 (13) 1428 1 15 24 1203 1431 1420 24 33 1. 4.01 190 16 1 299 12 1150 3.96 40 53.518 4.ANT 44.31 10.473 61 19.099 3.453 Preferred stack ce Hades cy CS law, IM vet I t Change in repurchase Baby Capital in Excel Par Valur Maltese She hul yapmas expen SSP covered WASUL discovered Oher deye Rewarnings gy Netcombo Cavid Ces de decored-prafered Bado et Manaland Other : 1 Boy Cherpesvete Halendar powder Maa Shtephe SARSUP Ch alunos do you Total Cum Shreddersy Neuroglu Huliny Mritis interest Duarte Othe Malinow 41 32.518 32.00 30.472 33199 113,919 361 113.9371 3.60 03.19 1836 31.461 . 70 1618 2 129S 0.000 712 1513 24.95 14. TH re 1846 (438) 4183 32,797) 11.045 D146) 11.36 12AME 307 164 51 110 155 TEL. 104 10,931 107 12.00 biofilo 2016 $107 mei 2015