The current items, listed in alphabetical order, are taken from the consolidated balance sheets of The Coca-Cola Company as of December 31, 2010, and PepsiCo as of December 25, 2010. (All amounts are in millions of dollars.)

The Coca-Cola Company

Accounts payable and accrued expenses...........................................$ 8,859

Accrued income taxes.....................................................................273

Cash and cash equivalents.............................................................8,517

Current maturities of long-term debt.................................................1,276

Inventories...............................................................................2,650

Loans and notes payable...............................................................8,100

Marketable securities......................................................................138

Prepaid expenses and other assets.....................................................3,162

Short-term investments.................................................................2,682

Trade accounts receivable, less allowance of$48...................................4,430

PepsiCo

Accounts and notes receivable, net..................................................$ 6,323

Accounts payable and other current liabilities .....................................10,923

Cash and cash equivalents...............................................................5,943

Income taxes payable.........................................................................71

Inventories..................................................................................3,372

Prepaid expenses and other current assets..............................................1,505

Short-term investments......................................................................426

Short-term obligations....................................................................4,898

Required

1. Compute working capital and the current ratio for both companies.

2. On the basis of your answers to (1), which company appears to be more liquid?

3. Other factors affect a company's liquidity besides working capital and current ratio. Comment on the composition of each company's current assets and ways this composition affects liquidity.