Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
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Economic Profit
PepsiCo Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes exhibited a generally positive trend over the observed periods, increasing from 8,429 million US dollars in late 2020 to 10,978 million US dollars by the end of 2024. There was a slight decline noted in 2022 compared to 2021, but the figure rebounded strongly in subsequent years, indicating improved operational profitability.
- Cost of Capital
- The cost of capital showed relative stability with minor fluctuations, starting at 8.49% in 2020 and reaching 8.9% in 2024. The peak was observed in 2022 at 9.17%, followed by a gradual decline through 2023 and 2024, suggesting some easing in capital expenses or risk perceptions over time.
- Invested Capital
- Invested capital remained fairly consistent between 2020 and 2022, hovering around 69,000 to 70,000 million US dollars, before rising to 75,038 million in 2023 and continuing upward to 76,674 million by 2024. This increase implies additional investments or asset growth over the last two years.
- Economic Profit
- Economic profit displayed an overall upward trajectory from 2,478 million US dollars in 2020 to 4,154 million in 2024. Despite a decrease in 2022 compared to 2021, economic profit improved notably in the final two years, reflecting enhanced value creation beyond the cost of capital.
Net Operating Profit after Taxes (NOPAT)
PepsiCo Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance.
3 Addition of increase (decrease) in restructuring liability.
4 Addition of increase (decrease) in equity equivalents to net income attributable to PepsiCo.
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income attributable to PepsiCo.
The annual financial data presents a general upward trend in key profitability metrics over the five-year period analyzed.
- Net Income Attributable to PepsiCo
- This metric shows a consistent increase throughout the period. Starting at 7,120 million US dollars in 2020, it rises to 7,618 million in 2021 and then experiences a notable jump to 8,910 million in 2022. This growth continues more moderately through 2023 and 2024, reaching 9,074 million and 9,578 million respectively. The trend suggests steady improvements in the company’s ability to generate profits attributable to shareholders.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT figures also demonstrate an overall growth trend but with a slight fluctuation in 2022. The measure increases from 8,429 million US dollars in 2020 to 9,629 million in 2021, reflecting enhanced operational efficiency or profitability. However, there is a decrease to 9,364 million in 2022, indicating a possible operational challenge or increased costs during that year. Despite this dip, NOPAT recovers and grows to 10,029 million in 2023 and further to 10,978 million in 2024, suggesting a strong rebound and continued operational success.
Overall, the data exhibits positive financial performance with increasing profitability over the studied years. While net income shows steady growth without decline, NOPAT reveals a minor fluctuation but recovers, highlighting the company’s resilience and operational strength.
Cash Operating Taxes
PepsiCo Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
- Provision for income taxes
- The provision for income taxes exhibited some variability over the five-year period. It increased from 1894 million US dollars in 2020 to a peak of 2142 million in 2021. The figure then declined to 1727 million in 2022, before rising again to 2262 million in 2023 and slightly increasing further to 2320 million in 2024. This fluctuation suggests changes in taxable income or adjustments in tax planning strategies over the years.
- Cash operating taxes
- Cash operating taxes demonstrated a consistent upward trend throughout the period. Starting at 2034 million US dollars in 2020, the outflow grew steadily each year, reaching 2131 million in 2021, 2660 million in 2022, 2970 million in 2023, and 3060 million in 2024. This continuous increase may reflect rising operational profitability, changes in tax regulations, or growing business activities impacting cash tax payments.
- Comparative insights
- While both provision for income taxes and cash operating taxes increased overall, cash operating taxes showed a more pronounced and consistent upward trajectory. The divergence seen particularly in 2022, where provision decreased but cash taxes increased significantly, could indicate timing differences between tax provision accruals and actual tax payments or variations in non-cash tax components. The steady rise in cash taxes suggests increasing cash tax obligations that might impact the company’s liquidity needs.
Invested Capital
PepsiCo Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of restructuring liability.
5 Addition of equity equivalents to total PepsiCo common shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of short-term investments.
- Total reported debt & leases
- The total reported debt and lease obligations showed a downward trend from 45,843 million USD in 2020 to 41,487 million USD in 2022, indicating a reduction in overall leverage during this period. However, starting in 2023, the debt level increased significantly to 47,061 million USD and continued to rise slightly to 47,751 million USD in 2024, suggesting a shift toward higher leverage or increased financing activity in recent years.
- Total PepsiCo common shareholders’ equity
- Shareholders’ equity exhibited steady growth from 13,454 million USD in 2020 up to a peak of 18,503 million USD in 2023, reflecting accumulation of retained earnings or capital injections over time. In 2024, equity slightly declined to 18,041 million USD, indicating a minor reduction in net assets attributable to common shareholders.
- Invested capital
- Invested capital remained relatively stable around the high 69,000 million USD range between 2020 and 2022, with values of 70,066 million USD in 2020 and 69,452 million USD in 2022. From 2023 onward, it increased noticeably to 75,038 million USD in 2023 and further to 76,674 million USD in 2024, signaling an expansion in the capital deployed in the business or acquisitions of additional assets.
- Summary
- Overall, the financial data reveals a period of debt reduction followed by increased borrowing after 2022. The rise in shareholders’ equity from 2020 through 2023 reflects strengthening capital base, though a slight dip in 2024 could merit attention. The invested capital trend aligns with the recent increase in debt, highlighting possible growth strategies or capital intensive initiatives pursued post-2022.
Cost of Capital
PepsiCo Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-28).
1 US$ in millions
2 Equity. See details »
3 Debt obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-30).
1 US$ in millions
2 Equity. See details »
3 Debt obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-25).
1 US$ in millions
2 Equity. See details »
3 Debt obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-26).
1 US$ in millions
2 Equity. See details »
3 Debt obligations. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
PepsiCo Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit demonstrates an overall upward trend from 2020 to 2024. Starting at 2,478 million USD in 2020, the figure increased substantially to 3,398 million USD in 2021. After a decline to 2,996 million USD in 2022, the economic profit resumed growth, reaching 3,256 million USD in 2023, and then saw a significant rise to 4,154 million USD in 2024. This pattern indicates fluctuating but generally improving profitability, with the highest value observed in the most recent year.
- Invested Capital
- The invested capital shows some variation over the period but remains relatively stable overall. The value decreased slightly from 70,066 million USD in 2020 to 69,829 million USD in 2021 and further to 69,452 million USD in 2022. However, invested capital increased notably in 2023 and 2024, reaching 75,038 million USD and 76,674 million USD respectively. This suggests a renewed investment strategy or capital expenditure in the last two years.
- Economic Spread Ratio
- The economic spread ratio exhibits generally positive trends. It started at 3.54% in 2020, rose sharply to 4.87% in 2021, then experienced a modest decline to 4.31% in 2022. The ratio remained nearly stable at 4.34% in 2023 before increasing again to the highest level of 5.42% in 2024. This improvement implies an enhanced ability to generate returns over the cost of capital, aligning with the pattern of rising economic profit in the later years.
Economic Profit Margin
PepsiCo Inc., economic profit margin calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Net revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Net revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit exhibited a generally upward trajectory over the five-year period. Initially, there was a notable increase from 2,478 million USD in 2020 to 3,398 million USD in 2021. Although it decreased slightly to 2,996 million USD in 2022, it rebounded in subsequent years, reaching 3,256 million USD in 2023 and ultimately peaking at 4,154 million USD in 2024. This pattern indicates a recovery and growth in value creation capacity after a brief decline.
- Net Revenue
- Net revenue showed consistent growth throughout the period, increasing every year without exception. Starting from 70,372 million USD in 2020, it rose to 79,474 million USD in 2021 and continued upward to 86,392 million USD in 2022. The growth rate somewhat slowed but remained positive with revenues of 91,471 million USD in 2023 and 91,854 million USD in 2024. This steady rise signals a sustained expansion of sales or service income.
- Economic Profit Margin
- The economic profit margin, expressed as a percentage, fluctuated during the period but followed a generally upward trend. It improved from 3.52% in 2020 to 4.28% in 2021, then declined to 3.47% in 2022, reflecting the dip in economic profit during that year. Subsequently, it increased to 3.56% in 2023 and reached its highest value of 4.52% in 2024. The margin's movement appears correlated with the changes in economic profit, indicating varying efficiency in converting revenue into economic profit.