a.?ROI = Net income / Average total assets

                     Coca Cola                                                                   PepsiCo

    = $5,807 / (($43,269 + $40,519) / 2)                     =$5,142 / (($34,628 + $36,091) /2)

    = $5,807 / $41,894 = 13.9%                                  = $5,142 / $35,359.5 = 14.5%

Note:Total assets at the end of the year is equal to ending liabilities plus ending stockholders’ equity.  For Coca Cola, $20,047 + $20,472 = $40,519 million.  For PepsiCo, $23,888 + $12,203 = $36,091 million.

ROE = Net income / Average stockholders’ equity

                    

Coca Cola	PepsiCo
= $5,807 / (($21,744 + $20,472) / 2)	=$5,142 / (($17,234 + $12,203) /2)
= $5,807 / $21,108 = 27.5%	= $5,142/$14,718.5 = 34.9%

Note:Total stockholders’ equity at the beginning of the year is equal to beginning assets minus beginning liabilities. For Coca Cola, $43,269 - $21,525 = $21,744 million.  For PepsiCo, $34,628 - $17,394 = $17,234 million.

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