Please answer questions Q1, Q2, Q3, Q4.

ACTIVITY 8 ANALYSIS: TREND Purpose: Prepare a trend analysis and understand the information provided A trend analysis compares amounts of a more recent vear to a base year. The base vear is the earliest year being studied. The analysis measures the percentage of change from the base year. 01 Use the amounts listed below to complete the trend indexes for Total expenses and Ner income Divide each amount by the amount of the base year and multiply by 100. Record the resulting trend index in the shaded area. Use 2005 as the base year. 2008 2007 2006 PEPSICO (S in millions) Sales revenue Total expenses Net income 133 $39,474 121 108 $43,251 $38,109 $ 5,142 Base Year 2005 $32,562 100 $28,484 $ 4,078 $35,137 $29,495 $ 5,642 $33,816 $ 5,658 Q2 From 2005 to 2008 sales growth for PepsiCo was 33%. During the same period, total expenses ___%. When net sales increase, expenses would be expected to increase / stay the same / decrease). It is favorable when sales increase by 33% and expenses increase at a (greater / lesser) rate than 33%. From 2005 to 2008 (revenues / expenses) of PepsiCo increased at a greater rate, which is (favorable / unfavorable). Assume PepsiCo had a goal of increasing profits by 5% each year. This goal was (metot met), The best year financially for PepsiCo was (2008/2007 / 2006). Why? Q3 Q4 The worst year financially for PepsiCo was (2008 / 2007/2006). Why? 05 Use the amounts listed below to complete the trend indexes for Liabilities and Stockholders' Equity. Divide each amount by the amount for the base year and multiply by 100. Record the resulting trend index in the shaded area. Use 2005 as the base year. PEPSICO ($ in millions) Assets 12/29/2007 12/27/2008 $35,994 113 $23,888 $12,106 $34,628 109 12/30/2006 $29,930 94 $14,562 $15,368 Base Year 12/31/2005 $31,727 100 $17,476 Liabilities $17,394 SEquity $17,234 $14,251 06 27 The assets of PepsiCo increased by 13% from 12/31/2005 to 12/27/2008, indicating PepsiCo is (growing / shrinking). From 12/31/2005 to 12/27/2008, (assets/ liabilities) increased at a greater rate, indicating the corporation is relying (more/less) on debt to finance assets. Stockholders' equity amounts are greater than the base year on (12-27-2008 / 12-29-2007 / 12-30- 2006) when the trend index is (greater / less) than 100. Stockholders' equity amounts are less than the base year on (12-27-2008 / 12-29-2007 / 12-30-2006) when the trend index is (greater / less) than 100. 08 it is easier to analyze PepsiCo (before / after) preparing the trend analysis