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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- Analysis of Profitability Ratios
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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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
= – × =
The analysis of the financial data reveals several notable trends and patterns over the five-year period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT shows a generally upward trend, increasing from $8,429 million in 2020 to $10,978 million in 2024. There is a slight dip observed in 2022 compared to 2021, but the overall progression indicates consistent growth in operating profitability after taxes.
- Cost of Capital
- The cost of capital exhibits some fluctuations but remains within a narrow range between 8.46% and 9.13%. The highest cost was recorded in 2022 at 9.13%, followed by a gradual decrease to 8.86% by 2024, suggesting a slight reduction in the expense associated with financing the invested capital.
- Invested Capital
- Invested capital remains relatively stable from 2020 to 2022, hovering around $70 billion. From 2022 onwards, there is a noticeable increase, reaching approximately $76.7 billion in 2024. This change suggests increased investment, possibly supporting future growth or operational expansion.
- Economic Profit
- Economic profit, defined as the value created above the cost of capital, improves significantly from $2,504 million in 2020 to $4,184 million in 2024. Despite a decrease in 2022 compared to 2021, economic profit rebounds in the subsequent years, indicating enhanced value creation and efficient use of capital relative to the cost of financing.
Overall, the data illustrates a positive trajectory in profitability and capital efficiency, with sustained growth in operating profit and economic profit alongside a stable or slightly decreasing cost of capital. The increase in invested capital suggests strategic reinvestment to support ongoing business activities or expansion. The patterns reflect effective management in balancing profitability and capital costs to enhance shareholder value over the examined period.
Net Operating Profit after Taxes (NOPAT)
PepsiCo Inc., NOPAT calculation
US$ 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 exhibited an overall upward trend across the five-year period. It increased from $2,504 million in 2020 to $4,184 million in 2024, with some fluctuations noted in 2022 where a decline from $3,426 million in 2021 to $3,025 million occurred. However, from 2022 onwards, economic profit consistently rose, reaching its highest value in 2024.
- Invested Capital
- The invested capital remained relatively stable from 2020 through 2022, fluctuating narrowly around the $69,000 million mark. A notable increase occurred starting in 2023, rising from $69,452 million in 2022 to $75,038 million, and continued to grow in 2024 to $76,674 million. This suggests a period of increased investment or asset growth beginning in 2023.
- Economic Spread Ratio
- The economic spread ratio showed an overall positive trend, increasing from 3.57% in 2020 to 5.46% in 2024. After a strong improvement in 2021 (4.91%), there was a slight decline in 2022 to 4.36%, followed by a modest recovery to 4.38% in 2023 and a significant increase in 2024. This pattern indicates improving profitability relative to the cost of capital over the period, particularly significant in the latest year.
- Summary Insights
- The company demonstrated resilience in economic profit despite minor setbacks in 2022, with a strong recovery and peak performance in 2024. The increase in invested capital starting 2023 suggests strategic investments or capital expansion. Improvement in the economic spread ratio over the years implies enhanced efficiency in generating returns above the cost of capital, with 2024 marking an especially productive year. Overall, these financial indicators reflect positive dynamics in value creation and capital utilization over the observed period.
Economic Profit Margin
PepsiCo Inc., economic profit margin calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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.
- Net Revenue
- The net revenue demonstrated a consistent upward trend over the five-year period. Starting at $70,372 million in 2020, it increased each year to reach $91,854 million in 2024. The growth was steady, with particularly notable increments between 2020 to 2021 and 2022 to 2023, indicating a sustained expansion of the company’s core operations.
- Economic Profit
- The economic profit displayed some variability but generally trended upward. Beginning at $2,504 million in 2020, it rose significantly to $3,426 million in 2021. Though it dipped to $3,025 million in 2022, it recovered and rose again to $3,286 million in 2023 and then reached a five-year high of $4,184 million in 2024. This pattern suggests effective management of costs and capital alongside revenue growth, notwithstanding some short-term fluctuations.
- Economic Profit Margin
- The economic profit margin fluctuated over the period. It increased from 3.56% in 2020 to a peak of 4.31% in 2021, then declined to 3.5% in 2022. Subsequently, it improved modestly to 3.59% in 2023 and rose significantly to 4.56% in 2024, which is the highest margin recorded in this timeframe. This indicates improved profitability relative to revenue in the most recent year, reflecting enhanced efficiency or a favorable cost structure.