PepsiCo Inc (PEP)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 12,155,000 | 11,576,000 | 11,623,000 | 10,142,000 | 10,208,000 |
| Interest expense | US$ in thousands | 819,000 | 939,000 | 1,863,000 | 1,128,000 | 935,000 |
| Interest coverage | 14.84 | 12.33 | 6.24 | 8.99 | 10.92 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $12,155,000K ÷ $819,000K
= 14.84
PepsiCo Inc's interest coverage ratio has shown a generally improving trend over the past five years, indicating the company's ability to meet its interest obligations. The interest coverage ratio measures the company's ability to pay interest on its outstanding debt using its operating income.
The interest coverage ratio has steadily increased from 10.92 in 2019 to 14.84 in 2023. This suggests that PepsiCo's operating income is more than sufficient to cover its interest expenses, providing a comfortable buffer against potential financial difficulties.
In 2021, there was a notable improvement in the interest coverage ratio, jumping to 6.24 from 8.99 in 2020. This increase may indicate a significant boost in operating income or a decrease in interest expenses during that year.
Overall, PepsiCo's interest coverage ratio reflects a stable and healthy financial position, highlighting the company's ability to service its debt obligations comfortably.
Peer comparison
Dec 31, 2023