Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

PepsiCo Inc. (NASDAQ:PEP)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

Beginner level

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

PepsiCo Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Financial Leverage
Dec 28, 2019 49.47% = 9.31% × 5.31
Dec 29, 2018 86.20% = 16.12% × 5.35
Dec 30, 2017 44.60% = 6.09% × 7.33
Dec 31, 2016 57.04% = 8.54% × 6.68
Dec 26, 2015 45.73% = 7.83% × 5.84

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-11).

The primary reason for the decrease in return on equity ratio (ROE) over 2019 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

PepsiCo Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 28, 2019 49.47% = 10.89% × 0.86 × 5.31
Dec 29, 2018 86.20% = 19.35% × 0.83 × 5.35
Dec 30, 2017 44.60% = 7.65% × 0.80 × 7.33
Dec 31, 2016 57.04% = 10.08% × 0.85 × 6.68
Dec 26, 2015 45.73% = 8.65% × 0.91 × 5.84

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-11).

The primary reason for the decrease in return on equity ratio (ROE) over 2019 year is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

PepsiCo Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 28, 2019 49.47% = 0.79 × 0.89 × 15.50% × 0.86 × 5.31
Dec 29, 2018 86.20% = 1.37 × 0.86 × 16.50% × 0.83 × 5.35
Dec 30, 2017 44.60% = 0.51 × 0.89 × 16.85% × 0.80 × 7.33
Dec 31, 2016 57.04% = 0.74 × 0.86 × 15.68% × 0.85 × 6.68
Dec 26, 2015 45.73% = 0.74 × 0.88 × 13.26% × 0.91 × 5.84

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-11).

The primary reason for the decrease in return on equity ratio (ROE) over 2019 year is the decrease in effect of taxes measured by tax burden ratio.

Two-Component Disaggregation of ROA

PepsiCo Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Dec 28, 2019 9.31% = 10.89% × 0.86
Dec 29, 2018 16.12% = 19.35% × 0.83
Dec 30, 2017 6.09% = 7.65% × 0.80
Dec 31, 2016 8.54% = 10.08% × 0.85
Dec 26, 2015 7.83% = 8.65% × 0.91

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-11).

The primary reason for the decrease in return on assets ratio (ROA) over 2019 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

PepsiCo Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 28, 2019 9.31% = 0.79 × 0.89 × 15.50% × 0.86
Dec 29, 2018 16.12% = 1.37 × 0.86 × 16.50% × 0.83
Dec 30, 2017 6.09% = 0.51 × 0.89 × 16.85% × 0.80
Dec 31, 2016 8.54% = 0.74 × 0.86 × 15.68% × 0.85
Dec 26, 2015 7.83% = 0.74 × 0.88 × 13.26% × 0.91

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-11).

The primary reason for the decrease in return on assets ratio (ROA) over 2019 year is the decrease in effect of taxes measured by tax burden ratio.

Disaggregation of Net Profit Margin

PepsiCo Inc., decomposition of net profit margin ratio

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 28, 2019 10.89% = 0.79 × 0.89 × 15.50%
Dec 29, 2018 19.35% = 1.37 × 0.86 × 16.50%
Dec 30, 2017 7.65% = 0.51 × 0.89 × 16.85%
Dec 31, 2016 10.08% = 0.74 × 0.86 × 15.68%
Dec 26, 2015 8.65% = 0.74 × 0.88 × 13.26%

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-11).

The primary reason for the decrease in net profit margin ratio over 2019 year is the decrease in effect of taxes measured by tax burden ratio.