PepsiCo Inc (PEP)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | 919,000 | 819,000 | 939,000 | 1,863,000 | 1,128,000 |
| Interest coverage | 13.95 | 14.84 | 12.33 | 6.24 | 8.99 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $12,817,000K ÷ $919,000K
= 13.95
Based on the provided data, PepsiCo Inc's interest coverage ratio has shown some fluctuations over the years.
As of December 31, 2020, the interest coverage ratio was 8.99, indicating that PepsiCo's operating income was nearly nine times its interest expense. This suggests that PepsiCo had a comfortable buffer to cover its interest payments.
By December 31, 2021, the interest coverage ratio decreased to 6.24, which may indicate a slight decrease in the company's ability to cover its interest expenses through its operating income. This could potentially signal higher financial risk or reduced profitability.
However, the trend reversed in the following years, with the interest coverage ratio improving to 12.33 by December 31, 2022, 14.84 by December 31, 2023, and then slightly decreasing to 13.95 by December 31, 2024. These higher ratios indicate that PepsiCo's ability to meet its interest obligations improved significantly, implying stronger financial health and less risk of default.
Overall, while there were fluctuations in PepsiCo's interest coverage ratio over the years, the company demonstrated solid performance in managing its interest payments, particularly in the later years of the analyzed period.
Peer comparison
Dec 31, 2024