Q1

a.Consider the income statement given below and perform Percentage Change Analysis for the entire Income Statement.

b.Comment on what changes PepsiCo has observed as they move from the year 2009 to the year 2010.

PepsiCo, Inc. Income Statement Years Ended December 25, 2010 and December 26, 2009 (in millions) 2010 2009 Net sales $57,838 $ 43,232 Cost of goods sold 26,575 20,099 Gross margin $31,263 $ 23, 133 Selling and administrative expenses 22,814 15,026 Other operating expenses 117 63 Operating income $ 8,332 $ 8,044 Interest expense 903 397 Other income (expense; net) 785 399 Income before taxes $ 8,214 $ 8,046 Income tax expense 1,894 2, 100 Net income $ 6,320 5,946