PepsiCo Inc (PEP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.87 | 7.85 | 7.77 | 8.53 | 7.62 |
| Receivables turnover | 8.89 | 8.46 | 8.50 | 9.16 | 8.37 |
| Payables turnover | 3.80 | 3.60 | 3.78 | 3.77 | 3.59 |
| Working capital turnover | — | — | — | — | — |
PepsiCo Inc's activity ratios provide insights into the company's efficiency in managing its assets and liabilities.
1. Inventory Turnover: PepsiCo's inventory turnover has shown a generally increasing trend from 7.62 in 2020 to 7.87 in 2024. This indicates that PepsiCo is selling its inventory more frequently over the years, which is positive as it minimizes the risk of obsolete inventory and boosts cash flow.
2. Receivables Turnover: The receivables turnover ratio has fluctuated but overall maintained a stable range between 8.37 to 9.16 over the years. This suggests that PepsiCo is efficient in collecting payments from customers, leading to a quicker conversion of accounts receivable into cash.
3. Payables Turnover: PepsiCo's payables turnover has remained relatively steady, ranging from 3.59 to 3.80. A stable payables turnover indicates that PepsiCo is effectively managing its trade credit obligations and maintaining good relationships with suppliers.
4. Working Capital Turnover: The data shows that the working capital turnover is not provided, which indicates that PepsiCo's efficiency in utilizing its working capital relative to sales is not available for analysis.
Overall, based on the available activity ratios, PepsiCo appears to be effectively managing its inventory, receivables, and payables, which reflects positively on its operational efficiency and cash flow management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 46.39 | 46.49 | 46.97 | 42.80 | 47.89 |
| Days of sales outstanding (DSO) | days | 41.06 | 43.16 | 42.94 | 39.86 | 43.59 |
| Number of days of payables | days | 96.16 | 101.40 | 96.54 | 96.81 | 101.62 |
PepsiCo Inc's activity ratios provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH): The company's inventory turnover improved over the past five years, decreasing from 47.89 days as of December 31, 2020, to 46.39 days as of December 31, 2024. A lower DOH indicates that PepsiCo is selling its inventory more quickly, which is a positive sign of efficient inventory management.
2. Days of Sales Outstanding (DSO): PepsiCo's DSO also decreased over the period, from 43.59 days at the end of 2020 to 41.06 days at the end of 2024. A declining trend in DSO suggests that the company is collecting receivables more promptly, improving its cash flow and liquidity position.
3. Number of Days of Payables: The number of days PepsiCo takes to pay its suppliers remained relatively stable, fluctuating between 96.16 days and 101.62 days over the five-year period. A consistent payables period indicates that the company has maintained a balanced approach to managing its payment obligations to suppliers.
Overall, the trend of decreasing DOH and DSO, along with stable payables days, suggests that PepsiCo has been effectively managing its working capital components to enhance operational efficiency and financial performance.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.28 | 3.38 | 3.56 | 3.55 | 3.29 |
| Total asset turnover | 0.92 | 0.91 | 0.94 | 0.86 | 0.76 |
The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. PepsiCo Inc's fixed asset turnover has shown a consistent improvement from 3.29 in 2020 to 3.28 in 2024, with slight fluctuations in between. This indicates that PepsiCo has been effectively utilizing its fixed assets to generate revenues.
Additionally, the total asset turnover ratio reflects how well a company utilizes its total assets to generate revenue. PepsiCo's total asset turnover has increased steadily from 0.76 in 2020 to 0.92 in 2024, indicating an improvement in the company's efficiency in generating sales from its total assets over the years.
Overall, both fixed asset turnover and total asset turnover ratios suggest that PepsiCo Inc has been effectively managing and utilizing its assets to drive revenue growth and improve operational efficiency during the period under review.