PepsiCo’s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. Instructions for accessing and using the complete annual reports of PepsiCo and Coca-Cola, including the notes to the financial statements, are also provided in Appendices B and C, respectively.

Instructions

(a) Based on the information contained in these financial statements, determine each of the following for each company.

(1) Gross profit for 2013.

(2) Gross profit rate for 2013.

(3) Operating income for 2013.

(4) Percentage change in operating income from 2012 to 2013.

(b) What conclusions concerning the relative profitability of the two companies can you draw from these data?