ACC 502 GCU Analyzing Accounts Receivable for Efficiency Discussion – Description
Using the first letter of your last name, answer the question below for which the letter of your name falls in the range. Use your own words to summarize the information from the textbook. Provide proper citations for sources used, including the textbook. Review the resources provided to assist with completion.
A – M: Calculate the accounts receivable turnover and the average collection period ratio for The Coca-Cola Company for the most current year presented. Explain what the results indicate about the company. Summarize how well Coca-Cola is collecting on its receivables based upon the type(s) of products it sells and the industry in which it competes. Justify your speculation by using supporting facts from the income statement, balance sheet, or other resources.
N – Z: Calculate the accounts receivable turnover and the average collection period ratios for PepsiCo for the most current year presented. Explain what the results indicate about the company. Summarize how well PepsiCo is collecting on its receivables based upon the type(s) of products it sells and the industry in which it competes. Justify your speculation by using supporting facts from the income statement, balance sheet, or other resources
Participate in follow-up discussion by comparing the ratios for both companies and explaining what they mean in relation to each other. Also, discuss what specific actions each company should take to improve its ratios. Consider if there are any other ratios that can be looked at to analyze accounts receivable.
Jerin Jose Answer
Jul 2, 2023, 12:59 AM
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The accounts receivable turnover ratio is a financial metric that measures how efficiently a company collects its accounts receivable during a specific period.
Accounts receivable turnover ratio of Coca-Cola for 2022: Net Credit Sales / Average Account Receivable.
Net Credit Sales: 43 billion or 43,004 million.
Average account receivable: (3487 + 3512) / 2 = 3449.5
Accounts Receivable Turnover Ratio: 43,004 / 3449.5 = 12.48
When comaparing to the last year the turnover ratio were dropped almost 1% and the analyses proved that it cause due to the recent credit avalibality. The forecast perdicted that next year also it will result more decline to the fear of the recession in current retail market .
Reference:
Washington, D. (n.d.). UNITED STATES SECURITIES AND EXCHANGE COMMISSION. https://investors.coca-colacompany.com/filings-rep…
Beaver, S. (2020, August 24). Why Accounts Receivable Turnover Ratio Matters. Oracle NetSuite. https://www.netsuite.com/portal/resource/articles/…
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