Stock Analysis on Net

PepsiCo Inc. (NASDAQ:PEP)

$24.99

Return on Capital (ROC)

Microsoft Excel

Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.

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Return on Invested Capital (ROIC)

PepsiCo Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1
Invested capital2
Performance Ratio
ROIC3
Benchmarks
ROIC, 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 NOPAT. See details »

2 Invested capital. See details »

3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.


Net Operating Profit After Taxes (NOPAT)
The net operating profit after taxes exhibited an overall upward trend from 2020 to 2024. Starting at $8,429 million in 2020, it increased to $9,629 million in 2021, followed by a slight decline to $9,364 million in 2022. Subsequently, it rose again to $10,029 million in 2023 and further to $10,978 million in 2024. This trend indicates a general improvement in operating profitability over the analyzed period, despite a minor dip in 2022.
Invested Capital
Invested capital showed relative stability with a slight increase across the five-year period. Initially, the invested capital was $70,066 million in 2020, decreasing marginally to $69,829 million in 2021 and $69,452 million in 2022. From 2023 onwards, there was a noticeable rise to $75,038 million, followed by a modest increase to $76,674 million in 2024. This suggests measured growth in the investment base, particularly in the later years.
Return on Invested Capital (ROIC)
Return on invested capital displayed a generally positive trajectory with minor fluctuations. It rose from 12.03% in 2020 to 13.79% in 2021, followed by a slight decrease to 13.48% in 2022 and 13.36% in 2023. In 2024, ROIC increased again to 14.32%, reaching the highest level in the examined period. This pattern indicates enhanced efficiency in utilizing invested capital to generate returns, particularly evident in the final year.

Decomposition of ROIC

PepsiCo Inc., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 28, 2024 = × ×
Dec 30, 2023 = × ×
Dec 31, 2022 = × ×
Dec 25, 2021 = × ×
Dec 26, 2020 = × ×

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 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »


The financial indicators reveal several notable trends across the five-year period analyzed.

Operating Profit Margin (OPM)
The operating profit margin experienced a minor decline from 14.87% in 2020 to 13.92% in 2022, suggesting some pressure on operating efficiency or cost management during that interval. Following this dip, there was a recovery to 14.21% in 2023, and a further improvement to 15.28% in 2024, marking the highest margin reported in the period. This upward trend in the latest years indicates strengthening profitability at the operational level.
Turnover of Capital (TO)
Capital turnover increased steadily from 1.00 in 2020 to a peak of 1.24 in 2022, indicating improving asset utilization and revenue generation from invested capital. Though it slightly decreased to 1.22 in 2023 and further to 1.20 in 2024, the values remained above the initial 2020 figure. This pattern suggests an overall improvement in capital efficiency with a mild reduction in the most recent years.
Effective Cash Tax Rate (1 – CTR)
The metric representing one minus the effective cash tax rate decreased from 80.56% in 2020 to 77.15% in 2023, before rising marginally to 78.20% in 2024. This indicates that the effective cash tax rate has slightly increased over the years, resulting in a modest reduction in post-tax cash retention, but the changes are relatively small and indicate consistent tax management practices.
Return on Invested Capital (ROIC)
ROIC demonstrated strong gains from 12.03% in 2020 to 13.79% in 2021, maintaining around 13.36% to 13.48% through 2022 and 2023. In 2024, ROIC improved notably to 14.32%, reaching the highest point in the period. This progression signifies enhanced overall profitability and efficiency in utilizing capital to generate returns.

Overall, the data reflect improving profitability and capital efficiency metrics in the latter years, with operating profit margin and return on invested capital achieving their highest levels in 2024. Despite minor fluctuations, turnover of capital remains elevated relative to 2020, and tax effects appear stable. These trends collectively suggest a strengthening financial performance over the analyzed timeframe.


Operating Profit Margin (OPM)

PepsiCo Inc., OPM calculation, comparison to benchmarks

Microsoft Excel
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1
Add: Cash operating taxes2
Net operating profit before taxes (NOPBT)
 
Net revenue
Profitability Ratio
OPM3
Benchmarks
OPM, 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 NOPAT. See details »

2 Cash operating taxes. See details »

3 2024 Calculation
OPM = 100 × NOPBT ÷ Net revenue
= 100 × ÷ =

4 Click competitor name to see calculations.


Net Operating Profit Before Taxes (NOPBT)
The net operating profit before taxes shows a consistent upward trend over the five-year period. It increased from $10,463 million in 2020 to $14,038 million in 2024, reflecting continuous growth in profitability before tax obligations. The profit increased steadily each year, indicating effective management of operating expenses in relation to revenue generation.
Net Revenue
Net revenue demonstrated a positive growth trajectory throughout the timeframe. Starting at $70,372 million in 2020, it rose to $91,854 million by 2024. While the growth rate slowed slightly between 2023 and 2024, overall revenue expanded year over year, signaling strong top-line business performance and demand stability or growth in products and services.
Operating Profit Margin (OPM)
The operating profit margin experienced minor fluctuations but showed an overall improvement from 14.87% in 2020 to 15.28% in 2024. There was a slight dip during 2022 to 13.92%, suggesting potential increased costs or pricing pressure in that year. However, subsequent years display a recovery and improvement in operational efficiency, culminating in the highest margin during the period in 2024.
Overall Analysis
The financial data reveals a favorable growth pattern for profitability and revenue. The increase in net operating profit before taxes, coupled with a rising or stabilizing operating profit margin, indicates enhanced operational effectiveness and sustained revenue expansion. The slight margin decline in 2022 appears temporary, as the margin recovers and improves in subsequent years. The company appears to be maintaining or improving cost control relative to revenue, enabling profit growth amidst increasing revenue volumes.

Turnover of Capital (TO)

PepsiCo Inc., TO calculation, comparison to benchmarks

Microsoft Excel
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Selected Financial Data (US$ in millions)
Net revenue
Invested capital1
Efficiency Ratio
TO2
Benchmarks
TO, 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 Invested capital. See details »

2 2024 Calculation
TO = Net revenue ÷ Invested capital
= ÷ =

3 Click competitor name to see calculations.


Net Revenue
Net revenue demonstrated a consistent upward trend over the period, increasing from 70,372 million US dollars in 2020 to 91,854 million US dollars in 2024. The most significant annual growth was observed between 2020 and 2021, followed by steady growth each subsequent year, although the rate of increase showed slight deceleration toward the end of the period.
Invested Capital
Invested capital remained relatively stable from 2020 through 2022, with minor fluctuations around the 69,000 to 70,000 million US dollars range. In 2023, it increased notably to 75,038 million US dollars, followed by a moderate rise in 2024 reaching 76,674 million US dollars. This suggests increased capital deployment starting in 2023.
Turnover of Capital (TO)
The turnover of capital ratio exhibited a rising trend from 1 in 2020 to a peak of 1.24 in 2022, indicating improving efficiency in using invested capital to generate revenue. However, after 2022, the ratio slightly declined to 1.22 in 2023 and further to 1.20 in 2024. Despite this decrease, the ratio remained higher than the 2020 base level, showing sustained relative efficiency compared to the start of the period.
Overall Analysis
The data indicates growth in net revenue accompanied by a moderate increase in invested capital, especially after 2022. The turnover of capital ratio peaked in 2022, reflecting enhanced capital efficiency, followed by a minor decline suggesting a slight reduction in efficiency, although still above initial levels. This pattern may indicate that while expanded investments are driving revenue growth, the efficiency gains from capital utilization have plateaued or slightly decreased in recent years.

Effective Cash Tax Rate (CTR)

PepsiCo Inc., CTR calculation, comparison to benchmarks

Microsoft Excel
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1
Add: Cash operating taxes2
Net operating profit before taxes (NOPBT)
Tax Rate
CTR3
Benchmarks
CTR, 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 NOPAT. See details »

2 Cash operating taxes. See details »

3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =

4 Click competitor name to see calculations.


Net Operating Profit Before Taxes (NOPBT)
The net operating profit before taxes exhibited a steady upward trend over the five-year period. Starting from $10,463 million in 2020, it increased each year, reaching $14,038 million by the end of 2024. This consistent growth suggests an improving operational performance and profitability before tax obligations.
Cash Operating Taxes
Cash operating taxes also showed an increasing pattern, growing from $2,034 million in 2020 to $3,060 million in 2024. This rise in cash taxes corresponds with the increase in operating profits, indicating a higher tax expense in absolute terms alongside expanding operations or profitability.
Effective Cash Tax Rate (CTR)
The effective cash tax rate fluctuated over the observed period. It started at 19.44% in 2020, declined to a low of 18.12% in 2021, then rose sharply to 22.12% in 2022, further increasing to 22.85% in 2023, before slightly decreasing to 21.8% in 2024. These variations suggest changes in tax planning, legislation, or profitability composition impacting tax efficiency.
Overall Observations
The data indicates healthy growth in operating profit before taxes, accompanied by corresponding increases in cash operating taxes. Meanwhile, the effective cash tax rate shows some volatility but generally trends upward after 2021, implying a relatively higher tax burden relative to profits in the later years. The company appears to be expanding profitably, with tax expenses rising in line with earnings.