PepsiCo, Inc., the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets
Question:
PepsiCo, Inc., the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years:
a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.b. ?What conclusions can you draw from these data?
Dec. 26, 2009 (in millions) Dec. 27, 2008 (in millions) Cash and cash equivalents $3,943 $2,064 Short-term investments, at cost 192 213 Accounts and notes receivable, net 4,624 4,683 Inventories 2,618 2,522 Prepaid expenses and other current assets Short-term obligations Accounts payable 1,194 1,324 464 369 8,292 6,494 Other current liabilities 1,924
Step by Step Answer:
a b The liquidity of PepsiCo has increased some over this time period Both the current and quick r...View the full answer
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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