The annual reports of the Coca-Cola Co. and PepsiCo. Inc., indicate the following for the year ended
Question:
The annual reports of the Coca-Cola Co. and PepsiCo. Inc., indicate the following for the year ended December 31.2014 (amounts in millions):
Required:
a. Calculate ROI and ROE for each company for 2014.
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 2014.
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 your answer.
Coca-Cola Co. PepsiCo, Inc. Net revenues Net income Total assets, Jaruary 1, 2014 Total liabilities, January 1,2014 Total liabilities. December 31 , 2014 Total stockholders' equity., December 31,2014 $45,998 7,124 90,055 56,615 61,462 30,561 $66,683 6,558 77.478 53,089 52,961 17,548
Step by Step Answer:
a ROI Net income Average total assets Note Total assets at the end of the year is equal to ending liabilities plus ending stockholders equity For Coca Cola 61462 30561 92023 million For PepsiCo 52961 ...View the full answer
Accounting What the Numbers Mean
ISBN: 978-1259535314
11th edition
Authors: David Marshall, Wayne McManus, Daniel Viele
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
Students also viewed these Cost Accounting questions
-
Question 1 1. With the aid of a suitable supporting diagram, outline the purpose and key components of a Decision Support System (DSS). 2. With reference to the diagram you provided in your answer to...
-
Do you believe that either Olivia or Eli acted unprofessionally or unethically? Defend your answer
-
Question 6 The government of Jonovia seizes all assets of Refresh, a world-famous, soft-drink brand in Jonovia, and offers compensation to the company. This action by the government of Jonovia is an...
-
Goods 1 and 2 are available at dollar prices of p1 per unit of Good 1 and p2 per unit of Good 2. A utility function U(x 1 , x 2 ) is a function representing the utility or benefit of consuming xj...
-
What four criteria has the SEC issued as further guidance for revenue recognition?
-
U. S. Supreme Court Justice Antonin Scalia was asked if the judicial system had gone off in error by applying the equal protection requirements of the 14th Amendment to sex discrimination and sexual...
-
Ortiz Automotive ended December 2009 with Accounts Receivable of $20,000 and Allowance for Uncollectible Accounts of $5,900. During January 2010, Ortiz Automotive completed the following...
-
A scale is constructed using the 10-kg mass, the 2-kg pan P, and the pulley and cord arrangement. Cord BCA is 2 m long. If s = 0.75 m, determine the mass D in the pan. Neglect the size of thepulley....
-
Steven and Carol, who file a joint tax return, have taxable income of $135,000 before the following sales of stock: Purchase Date Sale Date Cost Sales Proceeds 02/14/Year 10 07/14/Year 10 $2,120...
-
Transfer Pricing Case AMP Industries is a multi-national firm built around batteries and the use of batteries in the automotive industry. AMP Industries is made up of two divisions, a Battery...
-
This problem is based on the 2014 annual report of Campbell Soup Company in the appendix. Required: a. Compute the following profitability measures for the year ended August 3.2014: 1. Return on...
-
Partially completed financial statements for Whittaker. Inc. follow: WHITTAKER, INC. Income Statement For the Year Ended December 31, 2017...
-
A traffic light at a certain intersection is green 50% of the time, yellow 10% of the time, and red 40% of the time. A car approaches this intersection once each day. Let X represent the number of...
-
what ways do subcultures emerge within organizations, and how do they influence organizational dynamics and the alignment of individual and collective behaviors with overarching cultural frameworks ?
-
Write a java program for below loop pattern? 1 2 # 1 1 # 2 # 3 4 # 3 # 2 # 1
-
A group of four young adults have been traveling from town to down committing various acts while they are together. They are good at what they do and have not been caught yet. Their luck is about to...
-
Write a java program for below code? 1 1 12 21 123 12344321 321
-
Reflect on your learning from the course and identify what you consider to be the 10 most critical learning points for leaders to know about what is required to lead organizational change efforts...
-
Eye Deal Optometry leased vision-testing equipment from Insight Machines on January 1, 2024. Insight Machines manufactured the equipment at a cost of $200,000 and lists a cash selling price of...
-
Evaluate the function at the given value(s) of the independent variable. Simplify the results. (x) = cos 2x (a) (0) (b) (- /4) (c) (/3) (d) ()
-
National Chemical Company manufactures a chemical compound that is sold for $58 per gallon. A new variant of the chemical has been discovered, and if the basic compound were processed into the new...
-
Mizzou Mining Company mines an iron ore called Alpha. During the month of December, 400,000 tons of Alpha were mined and processed at a cost of $742,500. As the Alpha ore is mined, it is processed...
-
Circuit Masters, Inc. (CMI), is presently operating at 80% of capacity and manufacturing 120,000 units of a patented electronic component. The cost structure of the component is as follows: Raw...
-
What happens when the data you use to monitor progress, indicate that change is not happening or that the outcomes will not be met? (This response does not have to be related to your issue/action...
-
11. List 5 food safety responsibilities of a manager: 1. 2. 3. 4. 5. 12. Marketing Food Safety - List 4 ways to show staff and guest that a manager takes food safety seriously 1. 2. 3. 4.
-
As of Monday morning, the ledger balance and the availablebalance for a firm was $3,000. During the day, the firm wrote threechecks in the amounts of $750, $225, and $452. The firm deposited acheck...
Study smarter with the SolutionInn App