PepsiCo Inc (PEP)

Short-term

Turnover ratios

- Inventory Turnover: PepsiCo's inventory turnover has been fairly stable over the past five years, ranging between 6.82 and 8.53 times per year. A higher inventory turnover ratio indicates that PepsiCo is effectively managing its inventory levels and selling through its products efficiently.

- Receivables Turnover: The data shows that receivables turnover was not available for most periods, indicating that PepsiCo does not provide this information publicly. However, in the available years, the receivables turnover ranged between 7.60 and 9.16, suggesting that PepsiCo collects its receivables in a timely manner.

- Payables Turnover: Similar to receivables turnover, data on payables turnover was mostly not available. However, in the years where data is provided, payables turnover ranged between 3.60 and 3.80. A higher payables turnover ratio indicates that PepsiCo is paying its suppliers more quickly, which may have implications for cash flow management.

- Working Capital Turnover: The data shows that working capital turnover was available for the first period only, with a ratio of 29.49. This ratio measures how efficiently a company is using its working capital to generate sales. As the data is not available for subsequent periods, it is difficult to assess changes in this ratio over time for PepsiCo.

Overall, based on the available data, PepsiCo has shown stable inventory turnover and efficient management of receivables. However, more information is needed to analyze payables turnover and working capital turnover trends in order to draw comprehensive conclusions about the company's activity ratios.

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Average number of days

Based on the provided data on PepsiCo Inc's activity ratios:

1. Days of Inventory on Hand (DOH):
- PepsiCo's days of inventory on hand have fluctuated over the years, ranging from a low of 42.80 days to a high of 53.53 days.
- The general trend shows some variability but overall staying within a relatively stable range, indicating efficient management of inventory levels.
- Maintaining inventory levels around 45-50 days suggests effective inventory management practices by PepsiCo, ensuring optimal balance between supply and demand.

2. Days of Sales Outstanding (DSO):
- The data for days of sales outstanding is incomplete, with significant gaps represented by "— days" entries.
- However, for the available data points, PepsiCo's DSO ranged from 39.86 days to 48.00 days, indicating the average number of days it takes the company to collect revenue from its sales.
- Lower DSO values are generally favorable as they indicate quicker collection of accounts receivable, which may reflect efficient credit policies and effective collection processes.

3. Number of Days of Payables:
- Similar to DSO, the data for the number of days of payables also contains gaps denoted by "— days" entries.
- Notably, PepsiCo's payables days ranged from 96.16 days to 101.62 days, representing the average number of days it takes the company to pay its suppliers.
- Longer payables days suggest that PepsiCo takes more time to pay its suppliers, potentially indicating favorable payment terms negotiated with vendors or effective cash flow management strategies.

In conclusion, PepsiCo's activity ratios suggest efficient inventory management practices alongside reasonably effective accounts receivable and accounts payable management. Monitoring and optimizing these ratios can help PepsiCo maintain its financial health and operational efficiency.

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See also:

PepsiCo Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

PepsiCo Inc's long-term activity ratios provide insights into the efficiency with which the company is utilizing its assets to generate revenue over time.

1. Fixed Asset Turnover: This ratio measures how effectively the company is using its fixed assets to generate sales. From March 2020 to December 2024, PepsiCo's fixed asset turnover ratio ranged from 3.28 to 3.69, with an average of approximately 3.50. The trend shows some fluctuations over time but generally remains at a relatively high level. A higher fixed asset turnover ratio indicates more efficient utilization of fixed assets to generate sales revenue.

2. Total Asset Turnover: This ratio reflects the company's overall efficiency in using all its assets to generate revenue. From March 2020 to December 2024, PepsiCo's total asset turnover ratio ranged from 0.74 to 0.95, with an average of around 0.86. The trend demonstrates a gradual improvement over the period. A higher total asset turnover ratio indicates effective utilization of all assets, including fixed and current assets, to generate sales.

Both ratios suggest that PepsiCo Inc has been effectively leveraging its assets to generate revenue. The increasing trend in total asset turnover indicates continuous improvement in overall asset efficiency, while the steady performance of the fixed asset turnover ratio implies consistent utilization of fixed assets. Overall, these ratios reflect positive operational performance in terms of asset utilization and revenue generation for PepsiCo Inc.

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See also:

PepsiCo Inc Long-term (Investment) Activity Ratios (Quarterly Data)