Coca-Cola and Pepsi reported the following selected ratios: ...........................................Coke.................. Pepsi Return on assets............ 10.9%................ 8.4% Asset turnover................
Question:
Coca-Cola and Pepsi reported the following selected ratios:
...........................................Coke.................. Pepsi
Return on assets............ 10.9%................ 8.4%
Asset turnover................ 0.6 times.......... 0.9 times
(a) Identify which company has the better
(1) Return on assets ratio
(2) Asset turnover ratio.
(b) Based on these two ratios, which company would you expect to have the better profit margin?
Asset TurnoverAsset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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a 1 Coke has a better return on assets ratio 2 Pepsi has a better a...View the full answer
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