Coca-Cola Reported Net Sales Revenues of $18

question 98

Multiple Choice

Coca-Cola reported net sales revenues of $18.8 billion and cost of goods sold of $5.6 billion,while PepsiCo reported revenues of $22.3 billion and cost of goods sold of $9.3 billion.Which of the following statements is correct?

• A)While PepsiCo generated more revenues than Coca-Cola,PepsiCo generated a lower gross profit percentage.
• B)Coca-Cola generated a lower gross profit percentage because its sales revenue was lower.
• C)PepsiCo did a better job of controlling product costs as a percentage of sales than did Coca-Cola.
• D)The selling price of Coca-Cola products must have been higher than the price of Pepsi Co products.

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Definitions:

Standard Deviation

A statistical measure that quantifies the variability or dispersion of a set of data points or returns of an investment.

Annual Returns

The percentage change in the value of an investment over a one-year period.

Risk Premium

The extra return expected by an investor for holding a risky asset, compared to a risk-free asset.

Corporate Bonds

Debt securities issued by corporations to finance their operations, expansion, or other spending needs, paying fixed or variable interest rates to investors.