1. What is trend analysis? Explain how the percent change from one period to the next is calculated.
2. Explain the difference between trend analysis and common-size analysis.
3. Coca-Cola’s return on assets was 19.4 percent, and return on common shareholders’ equity was 41.7 percent. Briefly explain why these two percentages are different.
4. Coca-Cola had earnings per share of $5.12, andPepsiCo had earnings per share of $3.97. Is it accurate to conclude PepsiCo was more profitable? Explain your reasoning.
5. Coca-Cola had an inventory turnover ratio of 5.07 times (every 71.99 days), and PepsiCo had an inventory turnover ratio of 8.87 times (every 41.15 days). Which company had the best inventory turnover? Explain your reasoning.
6. Name the ratios used to evaluate long-term solvency. Explain what the term “long-term solvency” means.
7. What is the balanced scorecard? Briefly describe the four perspectives of the balanced scorecard.