Company’s Overall Leverage Position

Combined response to Instructions (a), (b), and (c) must be 425-600 words. In addition, you must include comparative data ( already added on this sheet ) on the two companies in an appendix.
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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.
Note: Round your answer to 2 decimal places.
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 $21,783
Current Liabilities $19,950 $26,220
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

Answer based on the calculation I did above.
a. In 100-125 words, based on your calculations in (a), contrast and compare each company’s overall liquidity position in relation to each other and to the industry overall. Assume the following industry averages: current ratio = 1.5; acid-test ratio = .75. Also address what these ratios might tell a short-term creditor in terms of their risk in extending credit to each company.

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Skip to question
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.
Note: Round your answer to 2 decimal places.
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 $21,783
Current Liabilities $19,950 $26,220
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

Answer based on the calculation I did above.

In 100-125 words, based on your calculations in (a) and (b), contrast and compare each company’s profitability in relation to each other and to the industry, including a brief discussion of why evaluating a company’s profitability requires more than just comparing net incomes. Assume the following industry averages: ROI = 5.4%; ROE = 12.9%. Also explain why an investor might be particularly interested in a company’s ROE.
Required information
Skip to question
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.
Note: Round your answer to 2 decimal places.
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 $21,783
Current Liabilities $19,950 $26,220
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

Answer based on the calculation I did above.
In 100-125 words, based on your calculations in (a) and (b), contrast and compare each company’s overall leverage position in relation to each other and to the industry. Assume the following industry averages: Debt ratio = .51; Debt to Equity ratio = 1.02. Also, explain why a higher leverage ratio would be considered a risk to stockholders and creditors.
Assume that you have $10,000 to invest in a single company and have narrowed it down to Coca-Cola and Pepsi. In 100-125 words and based upon your assessment of liquidity, profitability and financial leverage of both companies, discuss which company you would decide to invest your money in. Explain your reasoning based on the ratios.