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 about PepsiCo’s liquidity?

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Current Year Previous Year (in millions) $ 9,158 6,967 (in millions) $ 9,096 2,913 6,437 2,720 Cash and cash equivalents Short-term investments, at cost Accounts and notes receivable, net 6,694 2,723 1,547 6,892 14,243 Inventories Prepaid expenses and other current assets 1,865 4,071 13,507 Short-term obligations Accounts payable