Use the Excel file "PepsiCo Financial Statements" to answer the following questions. For full credit: a) You must show your work; and b) Your responses should be supported by empirical analysis (i.e. hard numbers). 1) Why was PepsiCo's Diluted EPS lower than its Basic EPS in each year? 2) How much did PepsiCo's revenues grow in 2018? What about 2019? 3) PepsiCo's revenues were higher in 2019 than 2018, but its EPS was lower. Why? 4) Did Pepsico use its assets more efficiently in 2018 or 2019 ? 5) Based on the year-end financial statements, do you think PepsiCo had liquidity problems in 2018? What about 2019? \begin{tabular}{|c|c|c|c|} \hline \multirow{3}{*}{ Consolidated Statement of Income - USD (\$) shares in Millions, \$ in Millions } & B & c & D \\ \hline & \multicolumn{3}{|c|}{12 Months Ended } \\ \hline & Dec. 28,2019 & Dec. 29,2018 & Dec. 30,2017 \\ \hline \multicolumn{4}{|l|}{ Income Statement [Abstract] } \\ \hline Net Revenue & $67,161 & $64,661 & $63,525 \\ \hline Cost of sales & 30,132 & 29,381 & 28,796 \\ \hline Gross profit & 37,029 & 35,280 & 34,729 \\ \hline Selling, general and administrative expenses & 26,738 & 25,170 & 24,453 \\ \hline Operating Profit & 10,291 & 10,110 & 10,276 \\ \hline Other pension and retiree medical benefits (expense)/income & (44) & 298 & 233 \\ \hline Interest expense & (1,135) & (1,525) & (1,151) \\ \hline Interest income and other & 200 & 306 & 244 \\ \hline Income before income taxes & 9,312 & 9,189 & 9,602 \\ \hline Provision for/(benefit from) income taxes (See Note 5) & 1,959 & (3,370) & 4,694 \\ \hline Net income & 7,353 & 12,559 & 4,908 \\ \hline Net Income Attributable to Pepsico & $7,314 & $12,515 & $4,857 \\ \hline \multicolumn{4}{|l|}{ Net Income Attributable to PepsiCo per Common Share } \\ \hline Basic & $5.23 & $8.84 & $3.40 \\ \hline Diluted & $5.20 & $8.78 & $3.38 \\ \hline \multicolumn{4}{|l|}{ Weighted-average common shares outstanding } \\ \hline Basic & 1,399 & 1,415 & 1,425 \\ \hline Diluted & 1,407 & 1,425 & 1,438 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline (4) & A & B & c & D \\ \hline 1 & \multirow{2}{*}{ Consolidated Statement of Comprehensive Income - USD (\$)\$ in Millions } & \multicolumn{3}{|c|}{12 Months Ended } \\ \hline 2 & & Dec. 28,2019 & Dec. 29,2018 & Dec. 30,2017 \\ \hline 3 & Net income & $7,353 & $12,559 & $4,908 \\ \hline 4 & \begin{tabular}{l} Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising \\ During Period, Net of Tax \end{tabular} & 628 & (1,641) & 1,109 \\ \hline 5 & Other comprehensive loss & & & \\ \hline 6 & Other Comprehensive income (Loss), Derivatives Qualifying as Hedges, Net of Tax & (90) & 40 & (36) \\ \hline 7 & Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax & 283 & (467) & (159) \\ \hline 8 & \begin{tabular}{l} Other Comprehensive income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising \\ During Period, after Tax \end{tabular} & (2) & 6 & (68) \\ \hline 9 & Pension and retiree medical: & & & \\ \hline 10 & Other Comprehensive income, Other, Net of Tax & 0 & 0 & 16 \\ \hline 11 & Other Comprehensive income/(Loss), after-tax amount & 819 & (2,062) & 862 \\ \hline 12 & Comprehensive income & 8,172 & 10,497 & 5,770 \\ \hline 13 & Comprehensive income attributable to noncontrolling interests & (39) & (44) & (51) \\ \hline 14 & Comprehensive Income Attributable to PepsiCo & $8,133 & $10,453 & $5,719 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline A & B & c & 0 \\ \hline \multirow{2}{*}{ Consolidated Statement of Cash Flaws - uSD (\$) $ in Millions } & \multicolumn{3}{|c|}{12 Months Ended } \\ \hline & Dex. 28, 2019 & Dec. 29,2018 & Dec. 30,2017 \\ \hline \multicolumn{4}{|l|}{ Operating Activities } \\ \hline Net income & $7,353 & $12,559 & $4,908 \\ \hline Depreciation and amortization & 2,432 & 2,399 & 2,369 \\ \hline Share-based compensation expense & 237 & 256 & 292 \\ \hline Restructuring and impairment charges & 370 & 308 & 295 \\ \hline Cash payments for restructuring charges & (350) & {[255]} & (113) \\ \hline Pension and retiree medical plan expenses & 519 & 221 & 221 \\ \hline Pension and retiree medical plan contributions. & (716) & (1,708) & (220) \\ \hline Deferred income taxes and other tax charges and credits & 453 & [531] & 619 \\ \hline Oaher net tax benefits related to international reorganizations & (2) & (4,347) & 0 \\ \hline Net tax (benefit)/expense related to the TCI Act & (8) & (28) & 2,451 \\ \hline Tax payments related to the TCI Act & (423) & [115] & 0 \\ \hline \multicolumn{4}{|l|}{ Change in assets and liabilities [Abstract] } \\ \hline Accounts and notes recelvable & (650) & {[253]} & (202) \\ \hline Inventories & (190) & {[174]} & [168] \\ \hline Prepaid expenses and other current assets & (87) & 9 & 20 \\ \hline Accounts payable and other current liabilities & 735 & 382 & 201 \\ \hline Income taxes payable & (287) & 448 & [338] \\ \hline Othes, net & 263 & [256) & (305) \\ \hline Net Cash Provided by (Used in) Operating Activities & 9,649 & 9,415 & 10,030 \\ \hline \multicolumn{4}{|l|}{ Investing Activities } \\ \hline Capital spending & (4,232) & (3,282) & (2,969) \\ \hline Sales of property, plant and equlpment & 170 & 134 & 180 \\ \hline Acquisition of Sodastream, net of cash and cash equivalents acquired & (1,939) & (1,197) & 0 \\ \hline Other acquisitions and investments in noncontrolled affiliates & (778) & {[299]} & (61) \\ \hline Divestitures & 253 & sos & 267 \\ \hline \multicolumn{4}{|l|}{ Short-term investments, by oripinal maturity: } \\ \hline More than three months - purchases & 0 & (5,637) & (18,385) \\ \hline More than three months - maturities & 16 & 12,824 & 15,744 \\ \hline More than three months - sales & 62 & 1,498 & 790 \\ \hline Three months or less, net & 19 & 16 & 2 \\ \hline Other investing net & (8) & 2 & 29 \\ \hline Net Cash (Used for)/Provided by Investing Activities & (6,437) & 4,564 & (4,403) \\ \hline \multicolumn{4}{|l|}{ Financing Activities } \\ \hline Proceeds from issuances of long-term debt & 4,621 & 0 & 7,509 \\ \hline Payments of long-term debt & (3,970) & (4,007) & {[4,406]} \\ \hline Cash tender and exchange offers/debt redemptions & (1,007) & (1,589) & 0 \\ \hline \multicolumn{4}{|l|}{ Short-term borrowings, by original maturity } \\ \hline More than three months - proceeds & 6 & 3 & 91 \\ \hline More than three months - payments & (2) & (17) & (128) \\ \hline Three months or less, net & (3) & (1,352) & (1,016) \\ \hline Cash dlvidends paild & (5,304) & (4,930) & (4,472] \\ \hline Share repurchases - common & (3,000) & (2,000) & (2,000) \\ \hline Share repurchases - preferred & 0 & (2) & (S) \\ \hline Proceeds from exercises of stock options & 329 & 281 & 462 \\ \hline Withholding tax payments on RSUs, PSUs and PEPunits converted & (114) & {[103)} & (145) \\ \hline Othes financine & (45) & (53) & (76) \\ \hline Net Cash Used for Financing Activities & (B,4B9) & (13,769) & (4,186} \\ \hline Effect of exchange rate changes on cash and cash equivalents and restricted cash & 78 & (98) & 47 \\ \hline Cash and Cash Equivalents and Restricted Cash, Period Increase (Decrease) & (5,199) & 112 & 1,488 \\ \hline Cash and cash equivalents and restricted cash & $5,570 & $10,769 & $10,657 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline Consolidated Balance Sheet - USD (\$) \$ in Millions & Dec. 28, 2019 & Dec. 29,2018 \\ \hline \multicolumn{3}{|l|}{ ASSETS } \\ \hline Cash and cash equivalents & $5,$09 & $8,721 \\ \hline Short-term investments & 229 & 272 \\ \hline Restricted Cash & 0 & 1,997 \\ \hline Accounts and notes receivable, net & 7,822 & 7,142 \\ \hline Inventories & 3,338 & 3,128 \\ \hline Prepaid expenses and other current assets & 747 & 633 \\ \hline Assets, Current & 17,645 & 21,893 \\ \hline Property, Plant and Equipment, net & 19,305 & 17.589 \\ \hline Amortizable Intangible Assets, net & 1,433 & 1,644 \\ \hline Goodwill & 15,501 & 14,808 \\ \hline Indefinite-lived Intangible Assets (Excluding Goodwill) & 14,510 & 14,181 \\ \hline Indefinite-tived Intangible Assets & 30,111 & 28,989 \\ \hline Equity Method Irvestments & 2,683 & 2,409 \\ \hline Deferred Income Tax Assets, Net & 4,359 & 4,364 \\ \hline Other Assets & 3.011 & 760 \\ \hline Total Assets & 78,547 & 7,548 \\ \hline \multicolumn{3}{|l|}{ UABIUTIES AND EQUITY } \\ \hline Short-term debt obligations & 2,920 & 4,026 \\ \hline Accounts payable and other current liablities & 17,541 & 18,112 \\ \hline Llabilities, Current & 20,461 & 22,138 \\ \hline Long-Term Debt Obligations & 29,148 & 28,295 \\ \hline Deferred Income Tax Liabilities, Net & 4,091 & 3,499 \\ \hline Other Liabilities, Noncurrent & 9,979 & 9,114 \\ \hline Liablities & 63,679 & 63,046 \\ \hline \multicolumn{3}{|l|}{ Commitments and contingencies } \\ \hline \multicolumn{3}{|l|}{ PepsiCo Common Sharehoiders' Equilty } \\ \hline \begin{tabular}{l} Common stock, par value 12/3C per share (authorized 3,600 shares, issued, net of repurchased common \\ stock at par value: 1,391 and 1,409 shares, respectively) \end{tabular} & 23 & 23 \\ \hline Additional Paid in Capital, Common Stock & 3,886 & 3,953 \\ \hline Retained Eamines (Accumulated Deficit) & 61,946 & 59,947 \\ \hline Accumulated Other Comprehensive Income (Loss), Net of Tax & (14,300) & (15,119) \\ \hline Treasury Stock, Value & (36,769) & \\ \hline Stockholders' Equity Attributable to Parent & 14,786 & 14,518 \\ \hline Stockholders" Equity Attributable to Noncontrolling Interest & 82 & 84 \\ \hline Total Equity & 14,868 & 14,502 \\ \hline Liabilities and Equity & 78,547 & n,548 \\ \hline \multicolumn{3}{|l|}{ Additional Paid-in Capital [Member] } \\ \hline \multicolumn{3}{|l|}{ Pepsico Common Shareholders' Equity } \\ \hline Stockholders" Equity Attributable to Parent & 3,886 & 3,953 \\ \hline \multicolumn{3}{|l|}{ Retained Eamings [Member] } \\ \hline \multicolumn{3}{|l|}{ Pepsico Common Shareholders' Equity } \\ \hline Stockholders' Equity Attributable to Parent & 61,946 & 59,947 \\ \hline \multicolumn{3}{|l|}{ AOCI Attributable to Parent (Member] } \\ \hline \multicolumn{3}{|l|}{ Pepsico Common Shareholders' Equity } \\ \hline Stockholders' Equity Attributable to Parent & (14,300) & (15,119) \\ \hline \multicolumn{3}{|l|}{ Treasury Stock [Member] } \\ \hline \multicolumn{3}{|l|}{ Pepsico Common Shareholders' Equity } \\ \hline Stockholders' Equity Attributable to Parent & (36,769) & (34,286) \\ \hline \multicolumn{3}{|l|}{ Common Stock } \\ \hline \multicolumn{3}{|l|}{ Pepsico Common Sharehoiders' Equily } \\ \hline Stockholders' Equity Attributable to Parent & $23 & $23 \\ \hline \end{tabular}