ACC 502 GCU Nursing 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.
Hi Beena,
Analyzing PepsiCo’s receivables turnover ratio and average collection period is fascinating. The company’s performance in receivables management has deteriorated since the last quarter, with the average collection period increasing from 39 to 45 days. This suggests that PepsiCo is taking longer to collect customer payments, which could challenge its cash flow.
Since PepsiCo operates in the fast-moving consumer goods (FMCG) industry, where products typically have lower prices and immediate cash demands may not be as high, a 39-day average collection period was previously considered reasonable. However, the current increase to 45 days could indicate a potential issue in managing receivables effectively.
Additionally, the comparison within the Consumer Non-Cyclical sector shows that PepsiCo’s ranking in terms of receivables turnover has worsened relative to other companies in the same sector. This suggests that PepsiCo may face more difficulties in collecting its receivables than its sector peers.
It’s worth noting that while PepsiCo’s revenue has experienced a gradual change, the receivable turnover has increased by about 20.61% since 2022. This indicates that despite the challenges in receivables management, PepsiCo has still improved its efficiency in collecting cash from credit sales to some extent.
In light of PepsiCo’s deteriorating receivables turnover ratio and longer average collection period, what potential strategies or actions could PepsiCo consider implementing to improve its receivables management and expedite the collection of customer payments?
Dr. B.
https://investors.coca-colacompany.com/filings-reports/annual-filings-10-k.
https://www.pepsico.com/investors/financial-information/sec-filings
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