PepsiCos financial statements are presented in Appendix A. Financial statements of The Coca-Cola Company are presented in

Question:

PepsiCo’s financial statements are presented in Appendix A. Financial statements of The Coca-Cola Company are presented in Appendix B.

Instructions

(a) Based on the information contained in these financial statements, compute the following 2007 ratios for each company.

(1) Debt to total assets.

(2) Times interest earned.

(b) What conclusions concerning the companies’ long-run solvency can be drawn from these ratios?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...