Analytical casecomparative analysis of profitability and financial leverage measures. The annual reports of the Coca-Cola Co. and

Analytical case—comparative analysis of profitability and financial leverage measures. The annual reports of the Coca-Cola Co. and PepsiCo, Inc., indicate the following for the year ended December 31, 2011 (amounts in millions):

a. Calculate ROI and ROE for each company for 2011.
b. Based on the results of your ROI and ROE analysis in part a , do you believe that either firm uses financial leverage more effectively than the other? Explain your answer.
c. Calculate the debt ratio and debt/equity ratio for each firm at the end of 2011.
d. Compare the results of your analysis in part c to your expectations concerning the relative use of financial leverage in part b. Do the debt and debt/equity ratios calculated in part c make sense relative to your expectations? Explain youranswer.

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Net revenues Net incomee Total assets, January 1, 2011 Total liabilities, January 1, 2011 Total liabilities, December 31, 2011 Total stockholders' equity, December 31, 2011... Coca-Cola Co. $46,452 8,634 72,921 41,607 48.053 PepsiCo, Inc. S66,504 6,462 68,153 46,667 51,983 20,899 31,921