The following information is from the 2007 annual reports of The Coca-Cola Company and of PepsiCo (all amounts are in millions of U.S. dollars). The information for PepsiCo is separated into overall results and results for just the beverage segments. Coca-Cola reports that substantially all of its operations are beverage-related.
1. Using the overall data, compute return on equity, return on sales, asset turnover, and assets-to-equity ratio for both PepsiCo and Coca-Cola.

2. Using the Beverages segment data for PepsiCo, compute return on beverage sales, beverage asset turnover, and return on beverage assets for both PepsiCo and Coca-Cola. Because Coca-Cola has only one operating segment, the overall results are the same as the beverage segment results. Use operating income and identifiable operating assets in your calculations (in place of net income and total assets, respectively).
3. Some writers have claimed that Coca-Cola has outperformed PepsiCo historically because Coke has concentrated on the profitable soft drink business, whereas PepsiCo has diversified into snack foods. Evaluate this claim in light of your calculations in (1) and(2).

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PepsiCo Coca-Cola Sales Operating income Net income ldentifiable operating assets Total assets Total equity Overall Beverages Overall 2,188 7,130 $39,474 7,170 5,658 29,149 34,628 7,325 $10.230 $28,857 7.252 5.981 35,492 43,269 21,744