As chief lending officer for a bank, you need to decide whether to make a loan to The Coca-Cola…

As chief lending officer for a bank, you need to decide whether to make a loan to The Coca-Cola Company. The current items, listed in alphabetical order, are taken from the consolidated balance sheets of The Coca-Cola Company and its competitor PepsiCo at the end of 2015 and 2014 (included in the companies’ Form 10-Ks for the year ended December 31, 2015 for Coca-Cola and December 26, 2015 for PepsiCo; all amounts are in millions of dollars):

Required Part A. The Ratio Analysis Model A banker must be able to assess a company’s liquidity before loaning it money. Liquidity is the ability of a company to pay its debts as they come due. Replicate the five steps in the Ratio Analysis Model on pages 73–74 to analyze the current ratios for The Coca-Cola Company and PepsiCo: 1. Formulate the Question 2. Gather the Information from the Financial Statements 3. Calculate the Ratio 4. Compare the Ratio with Other Ratios 5. Interpret the Ratios Part B. The Business Decision Model A banker must consider a variety of factors, including financial ratios, before making a loan. Replicate the five steps in the Business Decision Model on page 74 to decide whether to make a loan to The Coca-Cola Company: 1. Formulate the Question 2. Gather Information from the Financial Statements and Other Sources 3. Analyze the Information Gathered 4. Make the Decision 5. Monitor Your Decision