PepsiCo, inc. (PEP), 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?

Transcribed Image Text:

Year 2 (in millions) Year 1 (in millions) Cash and cash equivalents $10,610 $ 9,158 Short-term investments, at cost 8,900 6,967 Accounts and notes receivable, net 7,024 6,694 Inventories 2,947 2,723 Prepaid expenses and other current assets Short-term obligations (liabilities) 1,546 908 5,485 6,892 Accounts payable and other current liabilities 15,017 14,243