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 these data?objs. 2, 3

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Dec. 31, 2005 (in millions) Dec. 25, 2004 (in millions) $1,280 Cash and cash equivalents Short-term investments, at cost Accounts and notes receivable, net Inventories $1,716 3,166 2,165 3,261 2,999 1,693 1,541 Prepaid expenses and other current assets 618 654 Short term obligations 2,889 1,054 Accounts payable and other current liabilities 5,971 5,999 Income taxes payable 546 99