The annual reports of the Coca- Cola Co. and PepsiCo Inc. indicate the following for the year ended December 31, 2020 (amounts in millions):

Required:
a. Calculate ROI and ROE for each company for 2020.

b. Based on the results of your ROI and ROE analysis in 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 2020.
d. Compare the results of your analysis in c to your expectations concerning the relative use of financial leverage in b. Do the debt and debt/equity ratios calculated in c make sense relative to your expectations? Explain your answer.

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Net revenues Net income Total assets, January 1, 2020 Total liabilities, January 1, 2020 Total liabilities, December 31, 2020 Total equity, December 31, 2020 Coca-Cola Co. $33,014 7,747 86,381 65,283 66,012 21,284 PepsiCo Inc. $70,372 7,120 78,547 63,679 79,366 13,552