Acct 3120 External Financial Reporting II
Acct 3120 External Financial Reporting II
Chapter 14 Debt
This quiz is based on the 10-K for the year ended December 28, 2013 for PepsiCo, Inc. You can obtain Pepsi’s financial statements from the firm’s corporate web site at http://www.pepsico.com/Investors.html. Unless otherwise indicated, all questions relate to the current period’s financial statements.
1. How much is the current maturity of Pepsi’s long-term debt that was shown as a current liability? 5306millions
2. Compute the average interest rate for Pepsi’s debt. You can do this by dividing interest expense by the average balance sheet amount for debt incurring interest (so exclude current liabilities and deferred taxes). Interest expense 2013= 911 millions Debt incurring interest 2013 = 53089-17839-5986=29264 millions Debt incurring interest 2012= 52239-17089-5063=30087 millions Average = (29264+30087)/2=29675.5 millions Average interest rate = 911/29675.5=3.07%
3. Compute the following ratios for 2013 and 2012. Please indicate both the amounts that you used to compute the ratio and the final ratio.
Ratio:
2013
2012
Debt to Equity
Total liability =53089 Shareholders’ equity =24389
Debt to Equity= 53089/24389=2.18
Total Liability = 52239 Shareholders’ Equity = 22399
Debt to Equity = 52239/22399=2.33
Return on Assets
Net Income=6787 Total Asset =77478
Return on Asset= 6787/77478=8.76%
Net Income=6214 Total Asset =74638
Return on Asset= 6214/74638=8.33%
Return on Equity
Net Income=6787 Total Equity=24389
Return on Equity= 6787/24389=27.83%
Net Income=6214 Total Equity= 22399
Return on Asset= 6214/22399=27.75%
Times Interest Earned
EBIT=9705+97=9802 Interest Expense =911
Times Interest Earned= 9802/911=10.76
EBIT=9112+91=9203 Interest Expense =899
Times Interest Earned= 9203/899=10.24
4. Based on your
Chapter 14 Debt
This quiz is based on the 10-K for the year ended December 28, 2013 for PepsiCo, Inc. You can obtain Pepsi’s financial statements from the firm’s corporate web site at http://www.pepsico.com/Investors.html. Unless otherwise indicated, all questions relate to the current period’s financial statements.
1. How much is the current maturity of Pepsi’s long-term debt that was shown as a current liability? 5306millions
2. Compute the average interest rate for Pepsi’s debt. You can do this by dividing interest expense by the average balance sheet amount for debt incurring interest (so exclude current liabilities and deferred taxes). Interest expense 2013= 911 millions Debt incurring interest 2013 = 53089-17839-5986=29264 millions Debt incurring interest 2012= 52239-17089-5063=30087 millions Average = (29264+30087)/2=29675.5 millions Average interest rate = 911/29675.5=3.07%
3. Compute the following ratios for 2013 and 2012. Please indicate both the amounts that you used to compute the ratio and the final ratio.
Ratio:
2013
2012
Debt to Equity
Total liability =53089 Shareholders’ equity =24389
Debt to Equity= 53089/24389=2.18
Total Liability = 52239 Shareholders’ Equity = 22399
Debt to Equity = 52239/22399=2.33
Return on Assets
Net Income=6787 Total Asset =77478
Return on Asset= 6787/77478=8.76%
Net Income=6214 Total Asset =74638
Return on Asset= 6214/74638=8.33%
Return on Equity
Net Income=6787 Total Equity=24389
Return on Equity= 6787/24389=27.83%
Net Income=6214 Total Equity= 22399
Return on Asset= 6214/22399=27.75%
Times Interest Earned
EBIT=9705+97=9802 Interest Expense =911
Times Interest Earned= 9802/911=10.76
EBIT=9112+91=9203 Interest Expense =899
Times Interest Earned= 9203/899=10.24
4. Based on your