Financial Reporting Problem Part 1

Topics: Balance sheet, Financial statements, Asset Pages: 3 (975 words) Published: April 13, 2014


Financial Reporting Problem Part 1

XACC/290C
April 13, 2014
Bobbie Turner
Financial Reporting Problem Part 1

The company’s annual report is important because it gives the shareholders a clear picture and understanding about how the company is doing financially. The annual reports provide thorough information on very significant section of the accounts, such as the balance sheet, the income statement, and the cash flow statement. The information presented in the annual report would also be essential to potential investor, employee, and any other people that may have interest in financial aspect of the business.  The company’s total assets at the end of December 2013 were $77,478,000 (PepsiCo, n.d.). Although, for the reporting period at the end of December 2012, the total was $74,638,000. This information is important because it demonstrate what the company owns and how the company has grown over the years. It gives an understanding of the financial condition of the company, and how well they are doing, or have not done over the time frame. The current assets are the first thing on the balance. These are listed by the company so they have a tangible list of what it may convert into cash in a short period of time if the situation calls for that. This can usually be done in less than a year. Because these assets can easily be turned to cash by the company, they are referred to as “liquid” assets. Cash and cash equivalents are the most liquid assets found on the company’s balance sheet. PepsiCo’s cash and cash equivalents for the year end of December 28, 2013 were $9,375,000 and in December 2012 the company had $6,297,000 in cash and cash equivalents (PepsiCo, n.d.). This includes short-term investments, accounts and notes receivable, inventories and prepaid expenses, and other current assets. This represents the company’s liquidity. The more of the above that the company has access to what gives them a high risk of success because...

References: Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Financial accounting: Tools for business decision making (6th ed.). Hoboken, NJ: John Wiley & Sons.
PepsiCo. (n.d.). Investors. Retrieved from http://www.pepsico.com/Investors/Annual-Reports.html
Yahoo Finance. (2014, April). http://finance.yahoo.com/q/hp?s=PEP+Historical+Prices
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