PepsiCo Inc (PEP)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 12,155,000 | 11,189,000 | 10,503,000 | 8,865,000 | 11,576,000 | 13,515,000 | 13,406,000 | 14,589,000 | 11,623,000 | 11,604,000 | 11,427,000 | 10,577,000 | 10,142,000 | 9,940,000 | 9,742,000 | 9,477,000 | 9,726,000 | 10,234,000 | 10,549,000 | 10,364,000 |
| Interest expense (ttm) | US$ in thousands | 819,000 | 875,000 | 864,000 | 899,000 | 939,000 | 1,798,000 | 1,840,000 | 1,845,000 | 1,863,000 | 1,070,000 | 1,102,000 | 1,096,000 | 1,128,000 | 1,073,000 | 1,033,000 | 1,065,000 | 1,090,000 | 1,108,000 | 1,192,000 | 1,219,000 |
| Interest coverage | 14.84 | 12.79 | 12.16 | 9.86 | 12.33 | 7.52 | 7.29 | 7.91 | 6.24 | 10.84 | 10.37 | 9.65 | 8.99 | 9.26 | 9.43 | 8.90 | 8.92 | 9.24 | 8.85 | 8.50 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $12,155,000K ÷ $819,000K
= 14.84
The interest coverage ratio for PepsiCo Inc has demonstrated fluctuations over the past few years, ranging from a low of 6.24 to a high of 14.84. The ratio measures the company's ability to cover its interest expenses with its operating income.
In the recent periods, the interest coverage ratio has been relatively healthy, consistently above 9, indicating that PepsiCo has been generating sufficient operating income to comfortably cover its interest expenses. The ratio peaked at 14.84 on December 31, 2023, suggesting a strong ability to meet its interest obligations.
However, it is important to note that the interest coverage ratio decreased to 7.29 on June 11, 2022, and 7.52 on September 3, 2022, indicating a temporary weakening in the company's ability to cover its interest payments during those periods.
Overall, the trend in PepsiCo's interest coverage ratio reflects a generally stable financial position with the ability to comfortably pay interest costs from operating income, but periodic fluctuations suggest a need for careful monitoring of the company's financial health.
Peer comparison
Dec 31, 2023