Question

Trend Analysis. The following data pertain to PepsiCo, Inc.:

(in millions) Year 2 Year 1

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $39,474 $35,137

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,658 5,642

Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,389 3,725

Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,290 1,926

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,151 9,130

Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,628 29,930

Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,753 6,860

Total long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 9,641 7,702

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 18,000

For each item, calculate both the amount in dollars and the percentage change in

Year 2 using trend analysis and Year 1 as the base year.

Answer 1

Trend analysis

	Year 2	Year 1	Change in Dollar	Change in percentage
Revenue	39474	35137	4337	4337/35137 = 12.34%
Net income	5658	5642	16	16/5642 = 0.28%
Accounts receivable	4389	3725	664	664/3725 = 17.83%
Inventory	2290	1926	364	364/1926 = 18.90%
Total Current assets	10151	9130	1021	1021/9130 = 11.18%
Total assets	34628	29930	4698	4698/29930 = 15.70%
Total Current liabilities	7753	6860	893	893/6860 = 13.02%
Total long term liabilities	9641	7702	1939	1939/7702 = 25.18%
Total Stockholder's equity	20000	18000	2000	2000/18000 = 11.11%