-5- Evaluate Return on Equity for PepsiCo for the last three years using the DuPont analysis. (15% of the project grade).
You can find these ratios in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.
a. Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for the last three years (2017 to 2019) for PepsiCo. You also may use debt/equity ratio in your analysis. Present the ratios as the table(s) in your project.
b. Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for the last year (2019) for its major peer competitor Coca Cola. You also may use debt/equity ratio of peer competitor in your analysis. Present the ratios as the table(s) in your project.
c. Has PepsiCo’s ROE changed over the last three years? What was the main factor that influenced this change?
d. Compare the ratios of PepsiCo to the peer competitor (Coca Cola). If the management of the company would like to improve their return on equity, what should the management of the company do?
Write about 1 page of analysis to answer the questions (c) and (d).
–6- Develop a specific recommendation, with supporting rationale, as to whether PepsiCo’s s recent trends and results in financial performance is of sufficient financial strength, will PepsiCo be financially sustainable over the next two to three years, and which steps should be done to improve its financial stability? (about 1 page) (15% of the project grade).