Problem 6-11A The following information is available for The Coca-Cola Company (

Question

Problem 6-11A The following information is available for The Coca-Cola Company (in U.S. millions): 2015 2014 2013 Cost of goods sold $17,482 $17,889 $18,421 Inventories 3,100 33,395 32,986 31,304 26,930 32,37427,811 2,902 3,277 Current assets Current liabilities In the notes to its financial statements, Coca-Cola disclosed that it uses the FIFO and average cost formulas to determine the cost of its inventory The industry averages for the inventory turnover, days in inventory, and current ratios are as follows: Inventory turnover Days in inventory Current ratio 2015 8.7 times 42 days 2014 9.1 times 40 days 1.3:1 (ai) Calculate Coca-Cola's inventory turnover, days in inventory, and current ratios for 2015 and 2014. (Round inventory turnover and current ratio to 1 decimal place, e.g. 15.2. Round days in inventory to nearest day. Inventory Turnover Days In Inventory days days Current Ratio 2015 mes 2014 mes

Explanation / Answer

2015 2014 COGS 17482 17889 Inventory 2902 3100 Current Assets 33395 32986 Current Liabilities 26930 32374 Average Inventory 3001 3189 (Ending inventory+Beginning Inventory)/2 Inventory Turnover 5.83 5.61 (COGS /Average inventory) Days in inventory 62.61 days 65.06 days (Number of days / Inventory turnover) Current ratio 1.24 1.02 (current assets/ current liabilities) Inventory turnover Days in inventory Current ratio 2015 5.8 63 days 1.2 2014 5.6 65 days 1

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