The Coca-Cola Company and PepsiCo, Inc. provide refreshments to everycorner of the world. Selected data from the consolidated financial statements for TheCoca-Cola Company and for PepsiCo, Inc., are presented here:

Instructions

(a) Compute the following liquidity ratios for Coca-Cola and for PepsiCo. and commenton the relative liquidity of the two competitors:(1) Current(5) Inventory turnover(2) Acid-test(6) Average days in inventory(3) Receivables turnover(7) Current cash debt coverage(4) Average collection period

(b) Compute the following solvency ratios for the two companies and comment on therelative solvency of the two competitors:(1) Debt to total assets ratio(3) Cash debt coverage ratio(2) Times interest earned

(c) Compute the following profitability ratios for the two companies and comment onthe relative profitability of the two competitors:(1) Profit margin(4) Return on assets(2) Cash return on sales(5) Return on common stockholders' equity(3) Asset turnover

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Coca-Cola PepsiCo Total current assets (including cash, accounts receivable, and marketable securities totaling $3,056 and $3,539, respectively) Total current liabilities Net sales $ 5,205 $ 5,546 6,177 5,230 16,172 30,421 Cost of goods sold Net income 6,167 14,886 2,554 1,606 Average receivables for the year 1,384 2,229 Average inventories for the year 1,048 1,011 Average total assets 12,947 25,112 Average common stockholders' equity 4,910 7,085 Net cash provided by operating activities 3,115 3,742 Average current liabilities 6,763 5,250 Total assets 13,873 25,432 Total liabilities 8.638 18.119 Income before income taxes 3,728 2,432 Interest expense 199 682 Cash provided by operating activities 3,115 3,742