Question

Select a company in your pathway that maintains an inventory. Don't use a company that someone has already used. Please put the company's name as the subject of your post. (No posting the company name only to hold it. You must make a full post or I will delete it.) Access a recent (less than 12 months) annual 10-K report for the company using the SEC Edgar search tool or Yahoo or Google finance. Review the report and in and in a minimum of three paragraphs, tell us the following: 1. When the report was filed and the time period it covers, indicating specific dates. 2. What are the company's major product lines? 3. What inventory methods do they use? (Hint: see the Notes of the financial statements) 4. List the major components of the inventory and their values. 5. Include two other items that you found interesting about the financial statements. Examples of businesses in pathways could be: • AHCD: Dance, Theater, Film production, Social media, Graphics design or architecture business • Business: Accounting office, caterer, advertising firm, dry cleaner, restaurant, any business is acceptable • Education: K-12 tutoring, Child care, Charter schools • Health Sciences: Dr. or Dentist office, PT office, Hospital, Insurance co, • IMCT: Engineering Co., Aviation maintenance, Aviation distribution, Supply Chain Management • Public Safety: Law office, PI, Equipment providers for the industry • STEM: Engineering Co., Vet. Office, Computer Services co. • SGSHS: Psychology office, Non-profit agencies, Social Media

Answer 1

The company which is being selected is Pepsico.

1. The report was filed on February 2019 and the time period it covers is the fiscal year ended on December 2018.
2. Product lines can be broadly categorized as Beverages, Food, Everyday nutrition. They can be further classified as:

• Aquafina
• Pepsi
• Gatorade
• Mirinda
• Mountain Dew
• Slice
• Tropicana
• Doritos
• Lays
• Cheetos
• Quaker oatmeal

3. Inventory methods used by Pepsico are FIFO & LIFO

• FIFO (First in first out) - It assumes the first goods purchased are the goods sold. This is relevant for Pepsico since they have perishable items and are subject to seasonal variations.
• LIFO (Last in first out) - It assumes the last goods that were purchased are sold first.

4. Major components of inventory are:

• Raw materials and packaging
• Work in process
• Finished goods

Values are shown as per financial statement:

Inventory increased in 2018 as compared to previous year 2017.

	2018	2017
Raw materials and packaging	$1312	$1344
Work in process	$178	$167
Finished goods	$1638	$1436

5. Financial instruments like derivatives that are used for hedging risks like commodity risk, foreign currency risk, interest rates.

Acquisitions:

On December 5, 2018, Pepsico acquired all of the outstanding shares of SodaStream, a manufacturer and distributor of sparkling water makers, for $144.00 per share in cash, in a transaction valued at approximately $3.3 billion.