Analytical casecomparative analysis of profitability and financial leverage measures. The annual reports of the Coca-Cola Co. and PepsiCo, Inc., indicate the following for the year

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.

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