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) Compute earnings per share and return on common stockholders’ equity for both companies for the year ending December 31, 2007. Assume PepsiCo’s weighted average shares were 1,625 million and Coca-Cola’s weighted average shares were 2,313 million. Can these measures be used to compare the profitability of the two companies? Why or why not?

(b) What was the total amount of dividends paid by each company in 2007?

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...