Current Position Analysis

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:

Current Year (in millions)

Previous Year (in millions)

Cash and cash equivalents

$6,297

$4,067

Short-term investments, at cost

322

358

Accounts and notes receivable, net

7,041

6,912

Inventories

3,581

3,827

Prepaid expenses and other current assets

1,479

2,277

Short-term obligations

4,815

6,205

Accounts payable 12,274 11,949

a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.

	Current Year	Previous Year
1. Current ratio	________	_____________
2. Quick ratio	___________	_____________

b. The solvency of PepsiCo has ________slightly over this time period. The current ratio has _______ and the quick ratio has _______. PEPSICO appears to have_____ resources to meet its short term obligations, and these resources have remained______ during this time period.