The following information was taken from the financial statements of Coca-Cola and PepsiCo (dollar amounts in millions). Tax rates for Coca-Cola and Pepsi were 24 percent and 25 percent, respectively.

a. Compute return on equity, return on assets, common equity leverage, capital structure leverage, profit margin, and asset turnover for each company for 2014. Discuss the comparison.
b. For each company, what number results from the following: return on assets × common equity leverage × capital structure leverage?

c. For each company, what number results from the following: profit margin × asset turnover?
d. Compare Coca-Cola to PepsiCo. Which company has the higher return on equity and why? Which company has the higher return on assets and why? Discuss whether the two companies are creating shareholder value.

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Coca-Cola 2014 2013 Income Statement $45,998 $46,854 Sales 483 Interest expense 463 Net income 7,098 8,584 Balance Sheet $92,023 $90,055 Assets Shareholders' equity 30,561 33,440 Pepsico 2014 2013 Income Statement $66,683 $66,415 Sales Interest expense 909 911 Net income 6,558 6,787 Balance Sheet $70,509 $77,478 Assets Shareholders' equity 17,548 24,389