PA13-5 Interpreting Profitability, Liquidity, Solvency, and P/E Ratlos [LO4, L05] 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: Coca PepsiCo Cola Pepsico Ratio Gross profit percentage Net profit margin Return on equity EPS Receivables turnover ratio Inventory turnover ratio Current ratio Debt-to-assets P/E ratio 63.9% 33.6% 37.7% $5.06 8.6 5.1 1.17 0.57 54.1% 10.9% 29.4% $ 3.91 10.6 8.9 1.11 0.68 16.2 12.6 Required: 1-a. Which company appears more profitable? Coca-Cola 1R 10 Required: 1-a. Which company appears more profitable? Coca-Cola 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 tumover 2-a. Which company appears more liquid? Saved 2-a. Which company appears more liquid? Help Coca-Cola PepsiCo 2-b. Describe the ratio(s) that you used to reach this decision. (Select all that apply.) Receivable turnover Pricelearnings ratio Inventory turnover ratio Accounts receivable turnover ratio Current ratio Quick ratio 3-a. Which company appears more solvent? Coca-Cola PepsiCo 3-b. Describe the ratio(s) that you used to reach this decision. (Select all that apply.) Debt-to-assets ratio Pricelearnings ratio Current ratio Inventory turnover ratio Receivables turnover ratio 4. Not Available in connect