Question

 The ​table, shows 2016 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 Dr Pepper Snapple Group.

TABLE:

    Coca-Cola   Pepsico   Dr. Pepper
Revenues   $41,862   $62,803   $6,436
Cost of goods sold   16,464   28,205   2,586
Earnings   6,540   6,329   837
Total assets   87,268   74,120   9,789
Shareholders equity   23,057   11,241   2,145

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? (Round three decimal places for the percentages)

Gross profit margin- 0.607      0.551     0.598 (I have this for the first set as my answer)

Net profit Margin-

ROA-

ROE-

(Please show formulas for how you calculated the 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?

Answer 1

Net profit margin show earning as a percentage of sale.

Return on assets show earning as a percentage of total assets.

Return on equity show earning as a percentage of shareholder's equity.