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  • The Following Information Is Available For Pepsico Inc in U S

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    Miroslav Gegoski
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    PepsiCo disclosed that it uses the FIFO and average cost formulas to account for 90% of its inventory. It uses another method similar to FIFO for the remaining inventory. The document provides PepsiCo's financial information for 2010 and 2009, as well as industry averages for inventory turnover, days in inventory, and current ratios. It asks to calculate these metrics for PepsiCo and comment on its liquidity compared to the industry averages. It also asks why PepsiCo may use multiple inventory costing methods.

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    The Following Information is Available for Pepsico Inc in u s

    Original Title

    The Following Information is Available for Pepsico Inc in u s

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    PepsiCo disclosed that it uses the FIFO and average cost formulas to account for 90% of its inventory. It uses another method similar to FIFO for the remaining inventory. The document provides PepsiCo's financial information for 2010 and 2009, as well as industry averages for inventory turnover, days in inventory, and current ratios. It asks to calculate these metrics for PepsiCo and comment on its liquidity compared to the industry averages. It also asks why PepsiCo may use multiple inventory costing methods.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    5 views2 pages

    The Following Information Is Available For Pepsico Inc in U S

    Uploaded by

    Miroslav Gegoski
    PepsiCo disclosed that it uses the FIFO and average cost formulas to account for 90% of its inventory. It uses another method similar to FIFO for the remaining inventory. The document provides PepsiCo's financial information for 2010 and 2009, as well as industry averages for inventory turnover, days in inventory, and current ratios. It asks to calculate these metrics for PepsiCo and comment on its liquidity compared to the industry averages. It also asks why PepsiCo may use multiple inventory costing methods.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    The following information is available for PepsiCo Inc in U

    S #8614
    The following information is available for PepsiCo Inc in U S

    The following information is available for PepsiCo, Inc. (in U.S. millions):

    In the notes to its financial statements, PepsiCo disclosed that it uses the FIFO and average
    cost formulas to determine the cost of 90% of its inventory, and another method that is not
    materially different from FIFO to account for the remainder.

    The industry averages for the inventory turnover, days in inventory, and current ratios are as
    follows:

    Instructions

    (a) Calculate PepsiCo's inventory turnover, days in inventory, and current ratios for 2010 and
    2009. Comment on the company's liquidity over the two years, and in comparison with the
    industry.

    (b) What might be the reason that PepsiCo uses more than one cost formula to determine the
    cost of its inventory?

    The following information is available for PepsiCo Inc in U S

    ANSWER

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