PepsiCo Inc (PEP)

Liquidity ratios

Dec 31, 2023 Sep 9, 2023 Jun 17, 2023 Mar 31, 2023 Dec 31, 2022 Sep 3, 2022 Jun 11, 2022 Mar 19, 2022 Dec 31, 2021 Sep 4, 2021 Jun 12, 2021 Mar 20, 2021 Dec 31, 2020 Sep 5, 2020 Jun 13, 2020 Mar 21, 2020 Dec 31, 2019 Sep 7, 2019 Mar 23, 2019 Dec 31, 2018
Current ratio 0.85 0.88 0.84 0.87 0.80 0.92 0.83 0.87 0.83 0.95 0.91 0.93 0.98 0.93 0.97 1.10 0.86 0.95 0.94 0.99
Quick ratio 0.66 0.68 0.60 0.61 0.58 0.26 0.21 0.27 0.56 0.27 0.24 0.29 0.77 0.37 0.38 0.51 0.28 0.29 0.28 0.41
Cash ratio 0.32 0.31 0.22 0.20 0.20 0.26 0.21 0.27 0.23 0.27 0.24 0.29 0.41 0.37 0.38 0.51 0.28 0.29 0.28 0.41

PepsiCo Inc's liquidity ratios show fluctuations in the company's ability to meet short-term obligations over the analyzed periods. The current ratio, a measure of current assets relative to current liabilities, ranged from 0.80 to 0.95, indicating a mixed performance in liquidity. The quick ratio, which considers only the most liquid assets, also varied from 0.21 to 0.77, with lower values suggesting weaker short-term solvency. The cash ratio, reflecting the ability to cover current liabilities with cash and cash equivalents, ranged from 0.20 to 0.51, signaling variations in the company's cash position.

Overall, the liquidity ratios demonstrate some volatility in PepsiCo's short-term financial strength, potentially influenced by changes in asset composition and liabilities management. It is essential for stakeholders to monitor these ratios consistently to gauge the company's ability to handle its near-term financial obligations effectively.

See also:

PepsiCo Inc Liquidity Ratios (Quarterly Data)

Additional liquidity measure

Dec 31, 2023 Sep 9, 2023 Jun 17, 2023 Mar 31, 2023 Dec 31, 2022 Sep 3, 2022 Jun 11, 2022 Mar 19, 2022 Dec 31, 2021 Sep 4, 2021 Jun 12, 2021 Mar 20, 2021 Dec 31, 2020 Sep 5, 2020 Jun 13, 2020 Mar 21, 2020 Dec 31, 2019 Sep 7, 2019 Mar 23, 2019 Dec 31, 2018
Cash conversion cycle days -11.76 95.01 98.47 93.96 -6.63 46.63 50.29 45.94 -14.15 45.03 53.53 51.42 -10.14 49.13 52.04 45.54 -53.89 44.85 44.10 -50.75

The cash conversion cycle of PepsiCo Inc has fluctuated over the past few years, indicating variations in its management of working capital. In the most recent period, as of Dec 31, 2023, the company experienced a negative cash conversion cycle of -11.76 days, implying that it is able to convert its investments into cash quickly. However, in the preceding quarters, the cash conversion cycle was notably positive, with values ranging from 93.96 to 98.47 days, indicating that PepsiCo took longer to convert its resources into cash during those periods.

The trend over the quarters suggests that PepsiCo's management of inventories, receivables, and payables has been inconsistent. The negative cycle in certain periods highlights efficient management in terms of collecting receivables and paying suppliers. On the other hand, the positive cycles indicate extended periods required to convert inventory to sales and subsequently collect cash from customers.

Overall, PepsiCo Inc should focus on optimizing its cash conversion cycle to ensure efficient use of its working capital and improve its liquidity position. Identifying and addressing factors contributing to the longer cycles will be essential for enhancing the company's financial performance and cash flow management.