The Red Soda Company (Red Soda) and The Blue Soda Company (Blue Soda) provide refreshments to every corner of the world. Selected data from the 20X6 consolidated financial statements for Red Soda and Blue Soda are presented here (in millions). Red Soda Blue Soda Total current assets $12,551 $12,571 Total current liabilities 13,721 8,756 Net Sales 30,990 43,332 Cost of Goods Sold 11,088 20,099 Net income 6,824 5,946 Average (net) accounts receivable for the year 3,424 4,654 Average inventories for the year 2,271 2,570 Average total assets 44,595 37,921 Average common stockholders' equity 22,636 14,556 Average current liabilities 13,335 8,772 Average total liabilities 21,960 23,466 Total assets 48,671 39,848 Total liabilities 23,872 23,044 Income taxes 2,040 2,100 Interest expense 355 397 Net cash provided by operating activities 8,186 6,796 Capital expenditures 1,993 2,128 Cash dividends 3,800 2,732 Compute the following liquidity ratios for 20X6 for Red Soda and Blue Soda, comment on the relative liquidity of two competitors. a. Current ratio b. Accounts receivable turnover c. Average collection period d. Inventory turnover
The Red Soda Company (Red Soda) and The Blue Soda Company (Blue Soda) provide refreshments to every corner of the world. Selected data from the 20X6 consolidated financial statements for Red Soda and Blue Soda are presented here (in millions).
Red Soda Blue Soda
Total current assets $12,551 $12,571
Total current liabilities 13,721 8,756
Net Sales 30,990 43,332
Cost of Goods Sold 11,088 20,099
Net income 6,824 5,946
Average (net)
Average inventories for the year 2,271 2,570
Average total assets 44,595 37,921
Average common
Average current liabilities 13,335 8,772
Average total liabilities 21,960 23,466
Total assets 48,671 39,848
Total liabilities 23,872 23,044
Income taxes 2,040 2,100
Interest expense 355 397
Net cash provided by operating activities 8,186 6,796
Capital expenditures 1,993 2,128
Cash dividends 3,800 2,732
Compute the following
a.
b. Accounts receivable turnover
c. Average collection period
d. Inventory turnover
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