Question

An annual report for PepsiCo contained the following information (in millions of U. S. dollars):
Net earnings ..................... $ 6,214
Depreciation and amortization ............. 2,689
Decrease in trade receivables ............. 250
Decrease in inventories ................ 144
Decrease in prepayments ............... 89
Increase in trade payables .............. 548
Decrease in taxes payable .............. 97
Cash dividends paid .................. 3,305
Repurchase of shares ................ 3,226
Required:
1. Compute the cash flows from operating activities for PepsiCo by using the indirect method.
2. Compute the quality of earnings ratio.
3. What were the major reasons that Pepsi’s quality of earnings ratio did not equal 1.0?


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  • CreatedAugust 04, 2015
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