Coke and Pepsi are well-known international brands. Coca-Cola sells more than $35 billion worth of beverages each year while annual sales of Pepsi products exceed $43 billion. Compare the two companies as a potential investment based on the following ratios:

Ratio	Coca-Cola			PepsiCo
Gross profit percentage		63.9	%		54.1	%
Net profit margin		33.6	%		10.9	%
Return on equity		37.7	%		29.4	%
EPS	$	5.06		$	3.91
Receivables turnover ratio		8.6			10.6
Inventory turnover ratio		5.1			8.9
Current ratio		1.17			1.11
Debt-to-assets		0.57			0.68
P/E ratio		12.6			16.2

Required:

1-a. Which company appears more profitable? Coca-Cola or PepsiCo?

1-b. Describe the ratio(s) that you used to reach this decision. (Select all that apply.)

- Gross Profit Percentage

Net Profit Margin

Return on Equity

Earnings per share

Asset turnover

Fixed asset turnover

2-a. Which company appears more liquid? Coca Cola or PepsiCo

Describe the ratio(s) that you used to reach this decision. (Select all that apply.)

Receivable turnover

Price/earnings ratio

Inventory turnover ratio

Accounts receivable turnover ratio

Current ratio

Quick ratio

3-a. Which company appears more solvent? Coca Cola or PepsiCo

3-b. Describe the ratio(s) that you used to reach this decision. (Select all that apply.)

Debt to assets ratio

Price earnings ratio

Current ratio

Inventory turnover ratio

Receivable turnover ratio