Coke and Pepsi are well-known international brands. Coca-Cola Co. sells more than $34.5 billion each year while annual sales ofPepsiCo products exceed $66 billion. Compare the two companies as a potential investment based on the following ratios as reportedby csimarket.com for the twelve months ended September 27, 2019:RatioPepsiCoa. Gross profit percentageCoca-Cola61.30%22.70%b. Net profit margin55.00%18.00%e. EPS$ 1.66$ 8.82d. Inventory turnover ratio4.208.30e. Current ratio0.620.95f. Debt-to-assets0.760.829. P/E ratio32.5015.50Required:1. For each ratio listed, indicate whether it would be used to compare profitability, liquidity, or solvency, or whether it is not applicable(NA) to comparing companies.a. Gross profit percentageb. Net profit marginC. EPSd. Inventory turnover ratioe. Current ratiof. Debt-to-assets9. P/E ratio

The profitability ratio represents the profit of the company relative to the balance sheet, income,…

Answered: Coke and Pepsi are well-known…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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a) Prepare a projected income statement for the year to 31 October Year 8. b) Calculate for Year 7 and Year 8 i) Earnings per Share ii) Degree of operating gearing iii) Degree of financial gearing iv) Degree of combined gearing c) Briefly evaluate the information produced in a & b d) Calculate the sales revenue required in Year 8 to maintain existing earnings per share
Krogen Grocer’s 2016 financial statements show net income of $1,680 million, sales of $153,466 million, and average total assets of $46,350 million.How much is Krogen Grocer’s return on sales for the year? Question 22 options: A) 1.09% B) 30.20% C) 3.62% D) 6.42%
Assume that a firm has sales of $11,700,000, total assets of $4,500,000 total common equity of $2,000,000 and an ROE of 37.4985 percent. Using DuPont equation, determine the profit margin for this firm.
The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2023. The tax rate will remain constant. Income Statement Sales Costs $ 4,550 2,050 Pretax income Taxes (at 30.0%) $ 2,500 750 Net income $ 1,750 Balance Sheet, Year-End 2022 Net assets $ 6,600 2021 $ 6,300 Total $ 6,600 $ 6,300 Debt Equity Total 2022 $ 2,800 3,800 2021 $ 2,700 3,600 $ 6,600 $ 6,300 a. Assume that the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Internal growth rate b. Sustainable growth rate % %
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(DuPont analysis) Dearborn Supplies has total sales of $197 million, assets of $109 million, a return on equity of 34 percent, and a net profit margin of 7.2 percent. What is the firm's debt ratio? The company's debt ratio is %. (Round to one decimal place.)
Some parts of the balance sheet and income statement of PaintsWorld Enterprises is given below. You know that the effective tax rate is 23.0% and the interest rate the company pays on its long-term debt is 11.0%. You also know that the outstanding debt has been constant over the past few years. 1.Find the leverage ratio in 2022: 2. Find the asset turnover for 2022:
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(Using common-size financial statements) The S&H Construction Company expects to have total sales next year totaling $14,500,000. In addition, the firm pays taxes at 35 percent and will owe $306,000 in interest expense. Based on last year's operations the firm's management predicts that its cost of goods sold will be 60 percent of sales and operating expenses will total 26 percent. What is your estimate of the firm's net income (after taxes) for the coming year? Pro-Forma Income Statement Sales Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Taxes Net income $ $ $ $ $
Coke and Pepsi are well-known international brands. Coca-Cola Co. sells more than $34.5 billion each year while annual sales of PepsiCo products exceed $66 billion. Compare the two companies as a potential investment based on the following ratios as reported by csimarket.com for the twelve months ended September 27, 2019: Ratio a. Gross profit percentage b. Net profit margin c. EPS d. Inventory turnover ratio e. Current ratio. f. Debt-to-assets g. P/E ratio a. Gross profit percentage b. Net profit margin c. EPS Coca-Cola 61.30% 22.70% $ 1.66 4.20 0.62 0.76 32.50 d. Inventory turnover ratio e. Current ratio f. Debt-to-assets g. P/E ratio PepsiCo 55.00% 18.80% $ 8.82 8.30 Required: 1. For each ratio listed, indicate whether it would be used to compare profitability, liquidity, or solvency, or whether it is not applicable (NA) to comparing companies. 0.95 0.82 15.50

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