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Profitability analysis The table shows total revenues, cost of goods sold, earnings available for common stockholders, total assets, and stockholders' equity for three companies competing in the bottle drinks market: The Coca-Cola Company, Pepsico Inc., and Keurig D Pepper. a. Use the information given to analyze each firm's profitability in as many different ways as you can. Which company is most profitable? Why is this question difficult to answer? b. For each company, ROE >ROA. Why is that so? Look at the difference between ROE and ROA for each company. Does that difference help you determine which firm uses the highest percentage of debt to finance its activities?

Profitability analysis The table shows total revenues, cost of goods sold, earnings available for common stockholders, total assets, and stockholders' equity for three companies competing in the bottle drinks market: The Coca-Cola Company, Pepsico Inc., and Keurig D Pepper. a. Use the information given to analyze each firm's profitability in as many different ways as you can. Which company is most profitable? Why is this question difficult to answer? b. For each company, ROE >ROA. Why is that so? Look at the difference between ROE and ROA for each company. Does that difference help you determine which firm uses the highest percentage of debt to finance its activities?

FINANCIAL ACCOUNTING
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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Revenues Cost of goods sold Earnings Total assets Shareholders equity Coca-Cola $41,866 16,456 6,536 87,274 23,050 Pepsico $62,806 28,211 6,324 74,140 11,252 Keurig Dr Pepper $6,435 2,591 849 9,800 2,130
Transcribed Image Text:Revenues Cost of goods sold Earnings Total assets Shareholders equity Coca-Cola $41,866 16,456 6,536 87,274 23,050 Pepsico $62,806 28,211 6,324 74,140 11,252 Keurig Dr Pepper $6,435 2,591 849 9,800 2,130
Profitability analysis The table shows total revenues, cost of goods sold, earnings available for common stockholders, total assets, and stockholders' equity for three companies competing in the bottle drinks market: The Coca-Cola Company, Pepsico Inc., and Keurig Dr Pepper. a. Use the information given to analyze each firm's profitability in as many different ways as you can. Which company is most profitable? Why is this question difficult to answer? b. For each company, ROE >ROA. Why is that so? Look at the difference between ROE and ROA for each company. Does that difference help you determine which firm uses the highest percentage of debt to finance its activities? a. For the three companies, the gross profit margin is: (Round to three decimal places.) Keurig Dr. Pepper Coca-Cola Pepsico Gross profit margin
Transcribed Image Text:Profitability analysis The table shows total revenues, cost of goods sold, earnings available for common stockholders, total assets, and stockholders' equity for three companies competing in the bottle drinks market: The Coca-Cola Company, Pepsico Inc., and Keurig Dr Pepper. a. Use the information given to analyze each firm's profitability in as many different ways as you can. Which company is most profitable? Why is this question difficult to answer? b. For each company, ROE >ROA. Why is that so? Look at the difference between ROE and ROA for each company. Does that difference help you determine which firm uses the highest percentage of debt to finance its activities? a. For the three companies, the gross profit margin is: (Round to three decimal places.) Keurig Dr. Pepper Coca-Cola Pepsico Gross profit margin
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