PepsiCo Inc (PEP)
Solvency ratios
| Dec 31, 2024 | Sep 7, 2024 | Jun 15, 2024 | Mar 23, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.00 | 0.00 | 0.00 | 0.37 | 0.00 | 0.00 | 0.00 | 0.39 | 0.00 | 0.00 | 0.00 | 0.39 | 0.00 | 0.00 | 0.00 | 0.43 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.67 | 0.00 | 0.00 | 0.00 | 0.67 | 0.00 | 0.00 | 0.00 | 0.68 | 0.00 | 0.00 | 0.00 | 0.69 | 0.00 | 0.00 | 0.00 | 0.75 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 2.06 | 0.00 | 0.00 | 0.00 | 2.03 | 0.00 | 0.00 | 0.00 | 2.08 | 0.00 | 0.00 | 0.00 | 2.25 | 0.00 | 0.00 | 0.00 | 3.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 5.51 | 5.17 | 5.12 | 5.25 | 5.43 | 5.31 | 5.42 | 5.46 | 5.38 | 4.98 | 5.02 | 5.11 | 5.76 | 5.88 | 6.04 | 6.54 | 6.91 | 6.83 | 7.17 | 6.32 |
PepsiCo Inc's solvency ratios provide insight into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
- PepsiCo's debt-to-assets ratio has shown some fluctuations but, in general, has remained relatively low over the years. As of December 31, 2024, the ratio stood at 0.37, indicating that only 37% of the company's assets were financed by debt. This suggests that PepsiCo relies more on equity to fund its operations rather than debt.
2. Debt-to-capital ratio:
- The debt-to-capital ratio reflects the proportion of capital that is contributed by debt. PepsiCo's debt-to-capital ratio has also been relatively stable and low, with the ratio being 0.67 as of December 31, 2024. This implies that debt accounts for 67% of the company's total capital, while equity contributes the remaining 33%.
3. Debt-to-equity ratio:
- The debt-to-equity ratio measures the relationship between a company's debt and equity. PepsiCo's debt-to-equity ratio has shown a decreasing trend over the years, standing at 2.06 as of December 31, 2024. This indicates that PepsiCo relies more on equity financing than debt to support its operations and growth.
4. Financial leverage ratio:
- The financial leverage ratio reflects the company's use of debt in its capital structure. PepsiCo has shown a decreasing trend in its financial leverage ratio, indicating a reduction in the reliance on debt for financing. As of December 31, 2024, the ratio was 5.51, suggesting that the company has a balanced capital structure with a moderate level of financial leverage.
Overall, based on these solvency ratios, PepsiCo appears to have a sound financial position with a conservative approach towards debt financing, maintaining a healthy balance between debt and equity in its capital structure.
Coverage ratios
| Dec 31, 2024 | Sep 7, 2024 | Jun 15, 2024 | Mar 23, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 13.95 | 14.32 | 14.80 | 14.91 | 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 |
The interest coverage ratio measures a company's ability to meet its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of covering its interest payments.
For PepsiCo Inc, the interest coverage ratio fluctuated over the period analyzed. It ranged from a low of 6.24 on December 31, 2021, to a high of 14.91 on March 23, 2024.
After a slight decrease in the interest coverage ratio in 2021, the ratio started to increase again in 2022, reaching double digits by December 31, 2022.
From 2023 onwards, PepsiCo Inc experienced a significant improvement in its interest coverage ratio, with values consistently above 12. This indicates the company's strong ability to cover its interest expenses with operating income.
Overall, the trend suggests that PepsiCo Inc has been effectively managing its debt obligations and maintaining a healthy level of interest coverage in recent years.