Total Assets (12/31/21) Total Assets (12/31/20) Total Liabilities (12/31/21) Stockholders Equity (12/31/21) Stockholders Equity (12/31/20) $94,354 $87,296 $69.494 $23,000 $19,300 $92,377 $92,918 $76,226 $16.043 $13,454

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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### Required Information

**Benchmark Assignment - Coca-Cola Co. & PepsiCo Inc.**

You will need to use the data below from the two companies to calculate problems and answer the following questions:

|                       | Coca-Cola Co. (In millions) | PepsiCo Inc. (In millions) |
|-----------------------|-----------------------------|----------------------------|
| **Net Revenue (Sales)**       | $38,655                     | $79,474                    |
| **Net Income**                | $9,771                      | $7,618                     |
| **Current Assets**            | $22,545                     | $21,763                    |
| **Current Liabilities**       | $19,950                     | $25,220                    |
| **Cash & Cash Equivalents**   | $12,625                     | $5,988                     |
| **Accounts (Trade) Receivables** | $3,512                      | $8,680                     |
| **Total Assets (12/31/21)**   | $94,354                     | $92,377                    |
| **Total Assets (12/31/20)**   | $87,296                     | $92,918                    |
| **Total Liabilities (12/31/21)** | $69,494                     | $76,226                    |
| **Stockholders Equity (12/31/21)** | $23,000                     | $16,043                    |
| **Stockholders Equity (12/31/20)** | $19,300                     | $13,454                    |

---

### Calculate the debt ratio and debt/equity ratio for each company.

**Table: Debt Ratio and Debt/Equity Ratio Calculation**

|                         | **A**            | **B**         | **C**        |
|-------------------------|------------------|---------------|--------------|
|                         | Coca-Cola Co.    | PepsiCo Inc.  |
| **1. Debt Ratio**       | 0.739            | 0.825         |
| **2. Debt/Equity Ratio**| 3.021            | 4.751         |

Explanation:
- **Debt Ratio**: Measures a company's leverage by dividing total liabilities by total assets. It indicates the proportion of a company’s assets that are financed by debt.
- **Debt/Equity Ratio**: A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets
Transcribed Image Text:### Required Information **Benchmark Assignment - Coca-Cola Co. & PepsiCo Inc.** You will need to use the data below from the two companies to calculate problems and answer the following questions: | | Coca-Cola Co. (In millions) | PepsiCo Inc. (In millions) | |-----------------------|-----------------------------|----------------------------| | **Net Revenue (Sales)** | $38,655 | $79,474 | | **Net Income** | $9,771 | $7,618 | | **Current Assets** | $22,545 | $21,763 | | **Current Liabilities** | $19,950 | $25,220 | | **Cash & Cash Equivalents** | $12,625 | $5,988 | | **Accounts (Trade) Receivables** | $3,512 | $8,680 | | **Total Assets (12/31/21)** | $94,354 | $92,377 | | **Total Assets (12/31/20)** | $87,296 | $92,918 | | **Total Liabilities (12/31/21)** | $69,494 | $76,226 | | **Stockholders Equity (12/31/21)** | $23,000 | $16,043 | | **Stockholders Equity (12/31/20)** | $19,300 | $13,454 | --- ### Calculate the debt ratio and debt/equity ratio for each company. **Table: Debt Ratio and Debt/Equity Ratio Calculation** | | **A** | **B** | **C** | |-------------------------|------------------|---------------|--------------| | | Coca-Cola Co. | PepsiCo Inc. | | **1. Debt Ratio** | 0.739 | 0.825 | | **2. Debt/Equity Ratio**| 3.021 | 4.751 | Explanation: - **Debt Ratio**: Measures a company's leverage by dividing total liabilities by total assets. It indicates the proportion of a company’s assets that are financed by debt. - **Debt/Equity Ratio**: A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets
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