Q1. Prepare the common-size statements for the Coca-Cola (KO) and the Starbucks (SBUX) companies listed below. To compute, divide each amount on the income statement by sales revenue. Record the resulting common-size percent in the shaded area provided.
Q2. (________ / KO / SBUX) is the largest company above, reporting sales revenue of approximately $57.8 (trillion / ________ / million / thousand). ROS for Pepsi Co. is ______or _______ in decimal form, which indicates ________ cents of every dollar of sales revenue resulted in profit. ROS = NI / Revenue
Q3. On the common-size income statement, every amount is compared to or divided by total (assets / liabilities / ________ / net income).
Q4. Common-size statements are helpful when comparing companies of different size. (________ / False)
Q5. Based only on the information provided above, which company would be your choice of investment? (PEP / ________ / SBUX) Why?
The COMMON-SIZE BALANCE SHEET compares all amounts within one year to total assets of that same year. The analysis measures each balance sheet amount as a percentage of total assets.
Q6. Prepare the common-size statements for the Coca-Cola (KO) and Starbucks (SBUX) companies listed below. To compute, divide each amount on the balance sheet by total assets. Record the resulting common-size percent in the shaded area provided.
Q7. Starbucks primarily finances assets with (liabilities / ________). The debt ratio for Starbucks is ________, which indicates debt (liabilities) is used to finance ________ of assets and equity (stockholders’ equity) is used to finance ________of assets. On the common-size balance sheet, every amount is compared to or divided by total (________ / liabilities). Debt Ratio = Liabilities / Assets