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 thesedata?

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Dec. 31, 2005 (in millions) Dec. 25, 2004 (in millions) Cash and cash equivalents Short-term investments, at cost Accounts and notes receivable, net Inventories Prepaid expenses and other current assets Short-term obligations Accounts payable and other current liabilities Income taxes payable $1,716 3,166 3,261 1,693 618 2,889 5,971 546 $1,280 2,165 2,999 1,541 654 1,054 5,999