PepsiCo, Inc., is a dominant player in the beverage, snack food, and restaurant businesses. A recent PepsiCo annual report included the following note:
At year-end, $3.5 billion of short-term borrowings were reclassified as long-term, reflecting PepsiCo's intent and ability to refinance these borrowings on a long-term basis....
As a result of this reclassification, PepsiCo's working capital improved. Do you think the reclassification was appropriate? As a financial analyst, would you use the working capital amount before the reclassification or after the reclassification to evaluate PepsiCo's liquidity?