To see the current ratio, you use the formula Current Ratio = Current Assets divided by

Current Liabilities. After examining the PepsiCo, Inc. consolidated balance sheet data provided in Appendix A (pg. A6), I found that the current ratio of the company is:

Current Ratio = 10,554 (current assets) / 9,406 (current liabilities) = 1.11

So PepsiCo’s 2005 current ratio is 1.11:1. Their 2004 current ratio is calculated as

follows:

Current Ratio = 8639 (current assets) / 6752 (current liabilities) = 1.28

PepsiCo, Inc. has a current ratio of 1.28:1 for 2004.

% = 1716 (cash and cash equivalents) / 31727 (total assets) = 0.054

So, during 2005, PepsiCo, Inc. cash and cash equivalents were a total of 5.4%. Their

2004 figures yield the following equation.

% = 1280 (cash and cash equivalents) / 27987 (total assets) = 4.6% cash and cash equivalents for 2004.

So in 2005, Pepsi Co. had:

% = 10454 (current assets) / 31727 (total assets) = or 32.95%

In 2004, the company showed:

% = 8639 (current assets) / 27987 (total assets) = or 30.87%

So, now we can figure whether there were increases or decreases between the years 2004 and 2005.

10454 (total current assets 2005) / 8639 (total current assets 2004) = 21.01% increase

This shows that there was an increase in assets which...