Note the following financial information from PepsiCo, Inc. for 2009 and 2010 (note the column headers): Perform
Question:
Note the following financial information from PepsiCo, Inc. for 2009 and 2010 (note the column headers): Perform trend analysis of net sales to net income for the two years of data and comment on the trend.
a. Net sales increased by 6.3%, and net income increased by 33.8% over the period. This is of little concern because net income is increasing far quicker than net sales, meaning that some expense categories must be growing slower than net sales.
b. Net sales increased by 33.8%, and net income increased by 6.3% over the period. This is of concern because net income is increasing far slower than net sales, meaning that some expense categories must be growing faster than net sales.
c. Net sales increased by 46%, and net income increased by 34% over the period. This is of concern because net income is increasing far slower than net sales, meaning that some expense categories must be growing faster than net sales.
d. Net sales increased by 74.7%, and net income increased by 94.4% over the period. This is of little concern because net income is increasing faster than net sales, meaning that some expense categories must be growing slower than net sales.
Accounting Principles Part 3
ISBN: 978-1118306802
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow