Question

The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Selected data from the 2007 consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc., are presented here (in millions).


Instructions
(a) Compute the following liquidity ratios for 2007 for Coca-Cola and for PepsiCo and comment on the relative liquidity of the two competitors.
(1) Current ratio.
(2) Receivables turnover.
(3) Average collection period.
(4) Inventory turnover.
(5) Days in inventory.
(6) Current cash debt coverage.
(b) Compute the following solvency ratios for the two companies and comment on the relative solvency of the two competitors.
(1) Debt to total assets ratio.
(2) Times interest earned.
(3) Cash debt coverage ratio.
(4) Free cash flow.
(c) Compute the following profitability ratios for the two companies and comment on the relative profitability of the two competitors.
(1) Profit margin.
(2) Asset turnover.
(3) Return on assets.
(4) Return on common stockholders’equity.


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  • CreatedApril 21, 2012
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