An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

PepsiCo Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019	Dec 29, 2018
Adjustment to Total Assets
Total assets (as reported)	92,187)	92,377)	92,918)	78,547)	77,648)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	1,656)
Total assets (adjusted)	92,187)	92,377)	92,918)	78,547)	79,304)
Adjustment to Total Debt
Total debt (as reported)	39,071)	40,334)	44,150)	32,068)	32,321)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	—)	1,656)
Add: Current operating lease liabilities	483)	446)	460)	442)	—)
Add: Non-current operating lease liabilities (classified in Other liabilities)	1,933)	1,598)	1,233)	1,118)	—)
Total debt (adjusted)	41,487)	42,378)	45,843)	33,628)	33,977)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

^{1, 2} Equal to total present value of future operating lease payments.

PepsiCo Inc., Financial Data: Reported vs. Adjusted

PepsiCo Inc., adjusted financial ratios

	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019	Dec 29, 2018
Total Asset Turnover¹
Reported total asset turnover	0.94	0.86	0.76	0.86	0.83
Adjusted total asset turnover	0.94	0.86	0.76	0.86	0.82
Debt to Equity²
Reported debt to equity	2.28	2.51	3.28	2.17	2.23
Adjusted debt to equity	2.42	2.64	3.41	2.27	2.34
Return on Assets³ (ROA)
Reported ROA	9.67%	8.25%	7.66%	9.31%	16.12%
Adjusted ROA	9.67%	8.25%	7.66%	9.31%	15.78%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	PepsiCo Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	PepsiCo Inc. adjusted debt to equity ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	PepsiCo Inc. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

PepsiCo Inc., Financial Ratios: Reported vs. Adjusted

	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019	Dec 29, 2018
As Reported
Selected Financial Data (US$ in millions)
Net revenue	86,392)	79,474)	70,372)	67,161)	64,661)
Total assets	92,187)	92,377)	92,918)	78,547)	77,648)
Activity Ratio
Total asset turnover¹	0.94	0.86	0.76	0.86	0.83
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net revenue	86,392)	79,474)	70,372)	67,161)	64,661)
Adjusted total assets	92,187)	92,377)	92,918)	78,547)	79,304)
Activity Ratio
Adjusted total asset turnover²	0.94	0.86	0.76	0.86	0.82

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

2022 Calculations

¹ Total asset turnover = Net revenue ÷ Total assets
= 86,392 ÷ 92,187 = 0.94

² Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 86,392 ÷ 92,187 = 0.94

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	PepsiCo Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019	Dec 29, 2018
As Reported
Selected Financial Data (US$ in millions)
Total debt	39,071)	40,334)	44,150)	32,068)	32,321)
Total PepsiCo shareholders’ equity	17,149)	16,043)	13,454)	14,786)	14,518)
Solvency Ratio
Debt to equity¹	2.28	2.51	3.28	2.17	2.23
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	41,487)	42,378)	45,843)	33,628)	33,977)
Total PepsiCo shareholders’ equity	17,149)	16,043)	13,454)	14,786)	14,518)
Solvency Ratio
Adjusted debt to equity²	2.42	2.64	3.41	2.27	2.34

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

2022 Calculations

¹ Debt to equity = Total debt ÷ Total PepsiCo shareholders’ equity
= 39,071 ÷ 17,149 = 2.28

² Adjusted debt to equity = Adjusted total debt ÷ Total PepsiCo shareholders’ equity
= 41,487 ÷ 17,149 = 2.42

Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	PepsiCo Inc. adjusted debt-to-equity ratio improved from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019	Dec 29, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to PepsiCo	8,910)	7,618)	7,120)	7,314)	12,515)
Total assets	92,187)	92,377)	92,918)	78,547)	77,648)
Profitability Ratio
ROA¹	9.67%	8.25%	7.66%	9.31%	16.12%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to PepsiCo	8,910)	7,618)	7,120)	7,314)	12,515)
Adjusted total assets	92,187)	92,377)	92,918)	78,547)	79,304)
Profitability Ratio
Adjusted ROA²	9.67%	8.25%	7.66%	9.31%	15.78%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

2022 Calculations

¹ ROA = 100 × Net income attributable to PepsiCo ÷ Total assets
= 100 × 8,910 ÷ 92,187 = 9.67%

² Adjusted ROA = 100 × Net income attributable to PepsiCo ÷ Adjusted total assets
= 100 × 8,910 ÷ 92,187 = 9.67%

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	PepsiCo Inc. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

PepsiCo Inc. (NASDAQ:PEP)

Analysis of Operating Leases

Adjustments to Financial Statements for Operating Leases

PepsiCo Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

PepsiCo Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)