PepsiCo Inc (PEP)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.82 | 0.85 | 0.80 | 0.83 | 0.98 |
| Quick ratio | 0.62 | 0.66 | 0.58 | 0.56 | 0.77 |
| Cash ratio | 0.29 | 0.32 | 0.20 | 0.23 | 0.41 |
PepsiCo Inc's liquidity ratios have shown a declining trend over the years. The current ratio, which measures the company's ability to pay its short-term obligations with its current assets, decreased from 0.98 in 2020 to 0.82 in 2024. This indicates that PepsiCo may have slightly more liabilities than assets that can be readily converted to cash within the next year.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also decreased from 0.77 in 2020 to 0.62 in 2024. This suggests that PepsiCo's ability to meet its short-term obligations without relying on inventory has weakened.
Furthermore, the cash ratio, which indicates the proportion of current liabilities that can be covered by cash and cash equivalents, declined from 0.41 in 2020 to 0.29 in 2024. This implies that PepsiCo may have less cash available to cover its short-term obligations compared to previous years.
Overall, the decreasing trend in PepsiCo's liquidity ratios raises some concerns about its ability to meet its upcoming financial obligations, which may require the company to closely monitor and manage its cash flow and liquidity position in the future.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -8.70 | -11.76 | -6.63 | -14.15 | -10.14 |
The cash conversion cycle of PepsiCo Inc has shown some fluctuation over the years based on the provided data.
- As of December 31, 2020, PepsiCo Inc had a negative cash conversion cycle of -10.14 days, indicating that the company was able to convert its resources into cash quickly during that period.
- By December 31, 2021, the cash conversion cycle decreased further to -14.15 days, suggesting an improvement in efficiency in managing its working capital.
- However, by the end of December 31, 2022, the cash conversion cycle reduced to -6.63 days, showing that PepsiCo Inc was able to convert its resources into cash even faster compared to the previous year.
- Subsequently, on December 31, 2023, the cash conversion cycle increased slightly to -11.76 days, indicating a slower conversion of resources into cash compared to the previous year.
- Lastly, as of December 31, 2024, the cash conversion cycle showed a slight improvement to -8.70 days, suggesting a better efficiency in managing working capital compared to the previous year.
Overall, while the cash conversion cycle of PepsiCo Inc has fluctuated over the years, the company has managed to maintain a negative cash conversion cycle, signifying an efficient utilization of resources to generate cash flow.