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