Determine higher operating leverage

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Reference no: EM1357208

In its 2006 annual report, The Coca- Cola Company reported sales of $ 24.09 billion for fiscal year 2006 and $ 23.10 billion for fiscal year 2005. The company also reported operating income (roughly equivalent to EBIT) of $ 6.31 billion, and $ 6.09 billion in 2005 and 2006, respectively. Meanwhile, arch- rival PepsiCo, Inc. reported sales of $ 35.14 billion in 2006 and $ 32.56 billion in 2005. PepsiCos operating profit t was $ 6.44 billion in 2006 and $ 5.92 billion in 2005. Based on these figures, which company had higher operating leverage?

Reference no: EM1357208

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