Current Position Analysis PepsiCo, Inc. (PEP), the parent company of Frito-LayTM snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: Year 2 Year 1 (in millions) (in millions) Cash and cash equivalents Short-term investments, at cost $ 10,610 $9,158 8,900 6,967 Accounts and notes receivable, net 7,024 6,694 Inventories 2,947 2,723 Prepaid expenses and other current assets 1,546 908 Short-term obligations (liabilities) 5,485 6,892 Accounts payable and other current liabilities 15,017 14,243 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Year 2 Current ratio Quick ratio Year 1 b. What conclusion can be drawn from these data?
Current Position Analysis PepsiCo, Inc. (PEP), the parent company of Frito-LayTM snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: Year 2 Year 1 (in millions) (in millions) Cash and cash equivalents Short-term investments, at cost $ 10,610 $9,158 8,900 6,967 Accounts and notes receivable, net 7,024 6,694 Inventories 2,947 2,723 Prepaid expenses and other current assets 1,546 908 Short-term obligations (liabilities) 5,485 6,892 Accounts payable and other current liabilities 15,017 14,243 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Year 2 Current ratio Quick ratio Year 1 b. What conclusion can be drawn from these data?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Current Position Analysis
PepsiCo, Inc. (PEP), the parent company of Frito-LayTM snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years:
Year 2
Year 1
(in millions)
(in millions)
Cash and cash equivalents
Short-term investments, at cost
$ 10,610
$9,158
8,900
6,967
Accounts and notes receivable, net
7,024
6,694
Inventories
2,947
2,723
Prepaid expenses and other current assets
1,546
908
Short-term obligations (liabilities)
5,485
6,892
Accounts payable and other current liabilities
15,017
14,243
a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.
Year 2
Current ratio
Quick ratio
Year 1
b. What conclusion can be drawn from these data?
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