I need help with giving feedback to my classmate post.

Here is the question:

Find ROE, Net profit margin (listed as net margin), debt/equity ratio for the last three years for your company.

Find ROE, Net profit margin (listed as net margin), debt-equity ratio for the last year for its major peer competitor.

Has the companys ROE changed over the last three years? What was the main factor that influenced this change?

Compare the ratios of you company to the peer competitor. If the management of the company would like to improve their return on equity, what could the management of the company do?

Here is what my classmate posted

Company: Monster Beverage Corp, Stock Symbol: MNST

Monster Beverage Corp, MNST, note: on the Key Ratios tab as well as under "Financial Health" on MorningStar.com debt/equity was listed as "-".

Monster Bev MNST	2016	2015	2014
ROE	17.51%	17.29%	38.54%
Net Profit Margin	23.92%	23.37%	20.08%
Debt/Equity	-	-	-

2.Competitor: PepsiCo Inc, PEP

PepsiCo Inc.	2016
ROE	54.68%
Net Profit Margin	10.07%
Debt/Equity	2.67%

3.Monster Bev Cos ROE has increased since 2015, but decreased by over half since 2014. Even at the peak in 2014, the ROE was far below that of PepsiCo. To find out what was going on at the company, I went to their website and read through their Annual Reports for 2016, 2015, and 2014. Per the 2014 report, in that year, Monster Bev did essentially a trade with Coca-Cola where Monster bought Coca-Colas energy drink business and then Monster sold Coca-Cola their (Monsters) non-energy drink businesses. In 2016 (per the report), Monster started an expansion to cover more regions, specifically targeting China. So, the reason why I think that the ROE for Monster is so low compared to PepsiCo is that instead of being focused on giving wealth to shareholders, the company has been pursuing growth and expansion opportunities. This is in contrast to the large and expansive coverage that PepsiCo already has established.

4. I think if the management of Monster Beverage Company wanted to increase their ROE, they would need to slow their long-term expansion in exchange for short-term financial gains. Expansion requires capital to put in place the infrastructure to cover new areas.

Despite being listed as competitors, I do not think that is entirely accurate based off of the brand holdings of the two companies. For instance, Monster Beverage Company is focused exclusively on the energy drink segment, where they operate seven different brands all within that segment. In contrast, PepsiCo ventures into other segments including: Soda (Pepsi), Potato Chips (Lays), Sports-Drinks (Gatorade), Cold Cereal (Quaker Oats), and Juice (Tropicana).

Monster Beverage Company Annual Reports Link: http://investors.monsterbevcorp.com/annuals.cfm

PepsiCo Inc Global Brands Link: http://www.pepsico.com/Company/Global-Brands