PepsiCo Inc (PEP)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.39 | 0.39 | 0.43 | 0.37 |
| Debt-to-capital ratio | 0.67 | 0.68 | 0.69 | 0.75 | 0.66 |
| Debt-to-equity ratio | 2.03 | 2.08 | 2.25 | 3.00 | 1.97 |
| Financial leverage ratio | 5.43 | 5.38 | 5.76 | 6.91 | 5.31 |
The solvency ratios for PepsiCo Inc indicate its ability to meet its long-term financial obligations and manage its debt levels over the years.
- The Debt-to-assets ratio has shown a decreasing trend from 2018 to 2023, indicating that PepsiCo has been effective in reducing its reliance on debt to finance its assets.
- The Debt-to-capital ratio has also decreased over the years, suggesting that PepsiCo has been successful in reducing its debt relative to its total capital.
- The Debt-to-equity ratio has fluctuated but generally decreased from 2018 to 2023. This indicates that PepsiCo has reduced its debt compared to shareholders' equity, which is a positive sign of financial health.
- The Financial leverage ratio has also shown a decreasing trend, signaling that PepsiCo has been reducing its financial leverage and reliance on debt to fund its operations and investments.
Overall, PepsiCo's solvency ratios demonstrate a positive trend, reflecting a prudent approach to managing its debt levels and maintaining a strong financial position. This indicates the company's ability to meet its long-term obligations and suggests stability in its financial structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 14.84 | 12.33 | 6.24 | 8.99 | 10.92 |
PepsiCo Inc's interest coverage ratio has shown a generally positive trend over the last five years, indicating the company's improving ability to meet its interest obligations. The ratio has increased from 10.92 in 2019 to 14.84 in 2023. This suggests that PepsiCo's operating income is well above its interest expenses, providing a comfortable buffer in servicing its debt obligations. The significant improvement in interest coverage from 2021 (6.24) to 2023 (14.84) is particularly noteworthy, indicating that the company's profitability has substantially strengthened, allowing it to cover interest payments more than twice over. Overall, the upward trajectory of PepsiCo's interest coverage ratio reflects a positive financial performance and indicates a reduced risk of default on its debt.