Question

A recent annual report for PepsiCo contained the following information for the period (dollars in millions):

Net income ............ $6,462
Depreciation and amortization ..... 2,737
Increase in accounts receivable ...... 666
Increase in inventory .......... 331
Increase in prepaid expense ........ 27
Increase in accounts payable ....... 520
Decrease in taxes payable ....... 340
Increase in other current liabilities ..... 589
Cash dividends paid ......... 3,157
Treasury stock purchased ....... 2,489

Required 1. Compute cash flows from operating activities for PepsiCo using the indirect method.
2. Compute the quality of income ratio.
3. What were the major reasons that PepsiCo’s quality of income ratio did not equal 1.0?




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  • CreatedJuly 01, 2014
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