Pepsico Auditors Subsequent Acts Trends Assets Liabilities Essay

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PepsiCo

Auditors

Subsequent Acts

Trends

Assets

Liabilities

Stock

Income Statement Presentation

Income Statement Items

Net Income Trend

Comprehensive Income

Cash Flow Statement

Cash Flow from Operations

Cash Flow from Investing Activities

The annual report of a company contains the information required for outsiders to assess the company's financial condition. In order that this is possible, a substantial amount of information must be gathered and presented in a format common to all companies. The official annual report document, the 10-K, must be filed by all public American companies, and many also include an informal annual report along with this document. This report will analyze the annual report of PepsiCo in order to better understand the company.

Auditors

PepsiCo's auditor is KPMG. They provide their opinion on page 81 of the 2011 Annual Report. The opinion of KPMG with respect to the financial statements is as follows: "In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of PepsiCo, Inc., as of December 31, 2011 and December 25, 2010, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles."

Subsequent Acts

There have not been any subsequent acts, irregularities or errors that have had a material effect on the financial statements. A Google search revealed nothing of this sort, and there have not been any material restatements of the financial statements according to MSN Moneycentral.

Trends

The 2011 Annual Report contains information for the 2011 and 2010 fiscal years. The trend for assets at PepsiCo over these two years is upward for total assets, which increased by 6.9% from $68,153 million to $72,882 million. The current assets showed a slight decrease of 0.7% in the year, but the company increased its goodwill considerably (14.5%) and made improvements to property, plant and equipment (+3.3%) and "other nonamortizable intangible assets" (+23.5%).

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The trend in the liabilities for PepsiCo over the fiscal years 2010 and 2011 is towards an increase in liabilities. Total liabilities increased 11.3% from $46,677 million to $51,983 million. The company's current liabilities increased significantly over the year, from $15,892 million to $18,154 million, which represents an increase of 14.2%. There was a modest increase in the company's long-term debt obligations of 2.8%. Aggregate categories such as "other liabilities" and "deferred income taxes" showed the strongest increases, of 22.8% and 23.1% respectively. These figures, along with the increase in the current liabilities, accounted for almost all of the total increase in liabilities (89.3% of the total increase).

Assets

The company's three largest categories of assets for the 2011 fiscal year were "property, plant and equipment, net" at $19,698 million; goodwill at $16,800 million and "other nonamortizable intangible assets" at $14,557 million. According to the notes to the financial statements, the largest category of plant, property and equipment in gross terms was "machinery and equipment, including fleet and software." No net figure for this category is given. The bulk of the goodwill value came from the packaging and bottling unit ($9,932 million) and likely pertains to the recent purchase of the company's American bottlers. Another large portion of goodwill comes from the European operations, with goodwill there valued at $4,900 million. The other nonamortizable intangible assets include the company's brands which are valued in Europe at $4,178 million. Reacquired franchise rights in North America, again pertaining to the purchase of the bottlers, are valued at $7,342 million.

Liabilities

The three largest liabilities for the years presented are long-term debt, valued at $20,568 million; accounts payable and other current liabilities at $11,757 million; and "other liabilities" at $8,266 million. PepsiCo has six long-term debt issues valued at over $1 billion, the largest of which by far is $10,806 million for notes due 2017-2040, which are payable at.....

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