Coca Cola

Over the past five year's Coca-Cola company has had a current ratio hovering around .9 – 1.3. This ratio gives us an idea of the company's ability to pay back its short-term liabilities with its short term assets. A higher current ratio means that a company is more capable of paying its obligations. In 2009 Coca- Cola had a current ratio of 1.3, compared to Pepsi with a current ratio of 1.4 and the industry average of 1.26. Coca-Cola grew financially and became more financially stable in 2009, from its past years, and indicates that they made solid investments and were able to increase their current assets. Pepsi is able to meet its near term operating needs slightly more easily then Coca Cola. When compared to the industry standard of 1.26, Coca Cola is doing slightly better; they are more able to pay back their current debts then the rest of the industry. Coca-Cola is slightly more aggressive then Pepsi, but slightly more conservative than the rest of the industry.

Coca-Cola turnover their inventory every 63 to 75 days, compared to Pepsi who turns over inventory every 36 days and the industry who turns over inventory every 49 days. Coca Cola has lower inventory turnover than, Pepsi and the industry indicating that, Coca-Cola should look into improving their inventory management system and coming up with better inventory management processes to remain competitive with Pepsi and other firms in the industry. Coca Cola has accounts payable turnover ranging from 198 to 213 days, while Pepsi has accounts payable turnover of 148 days. While it is appears to be normal for accounts payable turnover to be lower, Coca Cola is significantly lower when compared to Pepsi, they could benefit improving this process.

Coca-Cola Company values their inventories at the lower of cost or market, which is a more conservative method and determines its cost of goods sold using the first-in, first-out (FIFO) method. This is a more aggressive decision because in...