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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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 NOPAT has shown a generally upward trend over the five-year period. It increased from $8,429 million in 2020 to $10,978 million in 2024, with a slight dip observed in 2022 where it decreased to $9,364 million from $9,629 million the previous year. The overall growth indicates improved operational profitability.
- Cost of Capital
- The cost of capital exhibited a gradual increase from 8.41% in 2020 to a peak of 9.08% in 2022. Following this peak, there was a minor decline in 2023 and 2024, stabilizing around 8.81%. This pattern suggests some variability in financing costs, possibly reflecting changing market conditions or capital structure adjustments.
- Invested Capital
- Invested capital remained relatively stable from 2020 through 2022, with values hovering near $70,000 million. However, in 2023, there was a notable increase to $75,038 million, which continued into 2024 with a further rise to $76,674 million. This increase suggests an expansion in assets or reinvestment into the business.
- Economic Profit
- Economic profit has experienced growth over the period. Beginning at $2,535 million in 2020, it increased to $4,219 million by 2024, despite some fluctuations. A decline was seen in 2022, followed by recovery and acceleration in 2023 and 2024. This rising economic profit indicates improving value creation beyond the cost of capital.
Net Operating Profit after Taxes (NOPAT)
PepsiCo Inc., NOPAT calculation
US$ 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 demonstrated a generally upward trend over the five-year period. Starting at $2,535 million in 2020, it increased significantly to $3,459 million in 2021. Although there was a decline to $3,058 million in 2022, economic profit recovered in the following years, rising to $3,321 million in 2023 and reaching the highest value of $4,219 million in 2024. This fluctuation indicates an overall improvement in profitability with some variations.
- Invested Capital
- Invested capital remained relatively stable during the initial three years, with a slight decrease from $70,066 million in 2020 to $69,452 million in 2022. However, it increased noticeably thereafter, reaching $75,038 million in 2023 and $76,674 million by the end of 2024. This suggests moderate growth in capital investment, particularly in the latter years.
- Economic Spread Ratio
- The economic spread ratio showed a positive progression overall. It rose from 3.62% in 2020 to 4.95% in 2021, followed by a slight decline to 4.4% in 2022. In the subsequent periods, the ratio improved again, recording 4.43% in 2023 and achieving its peak at 5.5% in 2024. This pattern reflects enhanced efficiency in generating returns over the cost of capital across the analyzed timeframe.
- Summary
- Over the five-year span, the data reveals a trajectory of improving economic performance and capital utilization. Despite some annual fluctuations, economic profit and spread ratio both show a robust upward trend, particularly notable in the last reported year. The invested capital exhibits moderate growth after a period of slight contraction, potentially underpinning the enhanced profitability metrics. Overall, the financial indicators suggest strengthening value creation and operational effectiveness.
Economic Profit Margin
PepsiCo Inc., economic profit margin calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 showed an overall increasing trend over the five-year period. Starting at 2,535 million USD in 2020, it rose significantly to 3,459 million USD in 2021. A slight decline occurred in 2022 to 3,058 million USD, followed by a recovery in 2023 reaching 3,321 million USD. In 2024, the economic profit reached its highest point at 4,219 million USD, indicating strong financial performance and value creation in the most recent year.
- Net Revenue
- Net revenue increased steadily each year from 2020 to 2024. Beginning at 70,372 million USD in 2020, revenue grew continuously to 79,474 million USD in 2021, then to 86,392 million USD in 2022, followed by 91,471 million USD in 2023. The upward trend continued into 2024, though the growth rate appeared to slow slightly, with revenue reaching 91,854 million USD. This suggests consistent top-line growth with a possible moderation in the pace of revenue increase in the most recent year.
- Economic Profit Margin
- The economic profit margin exhibited some fluctuations but generally improved over the period. Starting at 3.6% in 2020, it increased to 4.35% in 2021, reflecting increased profitability relative to revenue. The margin then decreased to 3.54% in 2022 but showed recovery afterward, rising modestly to 3.63% in 2023. The largest increase occurred in 2024, with the margin reaching 4.59%, the highest value recorded in the timeframe. This pattern indicates enhanced efficiency or profitability during the final year despite earlier volatility.