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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PepsiCo Inc. pages available for free this week:
- Statement of Comprehensive Income
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) 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 demonstrates a generally upward trend over the five-year period. Starting at 8,429 million USD in 2020, NOPAT increased to 9,629 million USD in 2021. Although there was a slight decline to 9,364 million USD in 2022, the metric resumed growth in the following years, reaching 10,029 million USD in 2023 and further increasing to 10,978 million USD by the end of 2024. This overall progression suggests improving operational efficiency and profitability over time.
- Cost of Capital
- The cost of capital exhibits minor fluctuations, initially rising from 8.46% in 2020 to a peak of 9.13% in 2022. Following this, there is a subtle decreasing trend, with the rate falling to 8.99% in 2023 and further to 8.86% in 2024. The pattern indicates a period of increasing capital costs which then stabilizes and slightly declines, potentially reflecting changes in market conditions or the company’s financing structure.
- Invested Capital
- Invested capital remained relatively stable between 2020 and 2022, showing a slight decrease from 70,066 million USD in 2020 to 69,452 million USD in 2022. However, a more pronounced increase occurred in the subsequent years, with invested capital rising to 75,038 million USD in 2023 and continuing to 76,674 million USD in 2024. This upward shift could indicate increased investments in assets or operations aimed at supporting growth.
- Economic Profit
- Economic profit shows strong growth throughout the period. Starting at 2,503 million USD in 2020, economic profit rose to 3,424 million USD in 2021, followed by a marginal decline to 3,023 million USD in 2022. Subsequently, economic profit increased again to 3,284 million USD in 2023 and reached a high of 4,182 million USD in 2024. The growth in economic profit outpaces the initial invested capital increases and correlates with improving NOPAT, suggesting 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 displays a generally positive trend over the five-year period. Starting at $2,503 million in 2020, it increased significantly to $3,424 million in 2021, then experienced a slight decline to $3,023 million in 2022. Thereafter, it recovered and rose to $3,284 million in 2023, followed by a substantial increase to $4,182 million in 2024. This suggests an overall improvement in the company's ability to generate profit above its cost of capital.
- Invested Capital
- The invested capital remained relatively stable from 2020 to 2022, with minor decreases each year from $70,066 million down to $69,452 million. However, from 2022 onwards, there was a noticeable rise to $75,038 million in 2023 and a moderate increase to $76,674 million in 2024. This indicates a period of renewed capital investment or asset growth during the latter part of the reported period.
- Economic Spread Ratio
- The economic spread ratio, which measures the return on invested capital above its cost, showed an increasing trend overall. It began at 3.57% in 2020 and rose significantly to 4.9% in 2021. There was a slight decline to 4.35% in 2022, but it stabilized at around 4.38% in 2023. In 2024, the ratio surged to 5.45%, the highest in the five-year span. This upward movement in the spread ratio indicates enhanced efficiency in generating returns on the invested capital over time.
Economic Profit Margin
PepsiCo Inc., economic profit margin calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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
- Net revenue showed a consistent upward trend over the five-year period. Starting from approximately 70.4 billion US dollars in 2020, revenue increased steadily each year, reaching about 91.9 billion US dollars by the end of 2024. The growth rate appears to slow slightly between 2023 and 2024, with a marginal increase from 91.5 billion to 91.9 billion, indicating a plateauing effect in the most recent year.
- Economic Profit
- Economic profit exhibited fluctuations but maintained an overall upward trajectory. It rose from 2.5 billion US dollars in 2020 to a peak of 3.4 billion in 2021, followed by a decline in 2022 to around 3 billion. Subsequently, economic profit recovered in 2023 and reached its highest level of 4.2 billion US dollars in 2024. This reflects improved value creation particularly in the last two years.
- Economic Profit Margin
- The economic profit margin, representing the ratio of economic profit to net revenue, demonstrated variability over the period. It increased from 3.56% in 2020 to 4.31% in 2021, indicating enhanced profitability efficiency. In 2022, the margin decreased to 3.5%, paralleling the dip in economic profit, but partially recovered to 3.59% in 2023. A notable improvement was observed in 2024, where the margin attained 4.55%, suggesting greater profit generation relative to revenue.
- Overall Insights
- The data indicates robust revenue growth over the period with some deceleration in the final year. Economic profit and its margin portray some volatility but demonstrate significant improvement from 2023 to 2024, implying enhanced operational efficiency or cost management despite revenue growth slowing down. The increasing economic profit margin in the latest year may signal strengthening competitive advantages or better value creation for stakeholders.