PepsiCo Inc (PEP)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 12,817,000 | 12,155,000 | 11,576,000 | 11,623,000 | 10,142,000 |
| Long-term debt | US$ in thousands | 37,224,000 | 37,595,000 | 35,657,000 | 36,026,000 | 40,370,000 |
| Total stockholders’ equity | US$ in thousands | 18,041,000 | 18,503,000 | 17,149,000 | 16,043,000 | 13,454,000 |
| Return on total capital | 23.19% | 21.67% | 21.92% | 22.32% | 18.84% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $12,817,000K ÷ ($37,224,000K + $18,041,000K)
= 23.19%
Based on the data provided, PepsiCo Inc's return on total capital has shown a positive trend over the specified period. The return on total capital increased from 18.84% as of December 31, 2020, to 23.19% as of December 31, 2024, indicating an improvement in the company's efficiency in generating returns from its total capital employed.
The steady increase in the return on total capital signifies effective management of the company's assets and liabilities to generate profits for its capital providers. This improvement suggests that PepsiCo has been successful in utilizing its capital efficiently to generate higher returns for its stakeholders.
Overall, the upward trend in PepsiCo's return on total capital reflects a positive financial performance and effectiveness in capital allocation, which can be viewed favorably by investors and stakeholders as an indicator of the company's financial strength and profitability.
Peer comparison
Dec 31, 2024