Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Return on Equity (ROE) since 2005
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Liquidity Ratios (Summary)
PepsiCo Inc., liquidity ratios
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
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).
- Current ratio
- The current ratio demonstrates a declining trend over the five-year period. Starting at 0.98 in 2020, it decreased to 0.83 in 2021 and further to 0.8 in 2022. Slight recovery was observed in 2023, increasing to 0.85, followed by a minor decline to 0.82 in 2024. Overall, the current ratio remains below 1.0, indicating the company consistently holds fewer current assets than current liabilities across the years.
- Quick ratio
- The quick ratio exhibits a significant decline from 0.77 in 2020 to 0.56 in 2021. It then maintains a relatively stable level, slightly increasing to 0.58 in 2022 and 0.66 in 2023, before dipping again to 0.62 in 2024. The trend suggests a reduction in highly liquid assets relative to current liabilities, with some minor fluctuations in the middle years.
- Cash ratio
- The cash ratio shows a more pronounced decrease from 0.41 in 2020 to 0.23 in 2021, followed by a continued drop to 0.2 in 2022. There is a noticeable rebound to 0.32 in 2023, but the ratio declines again to 0.29 in 2024. This pattern indicates that the firm’s immediate liquidity, represented by cash and cash equivalents against current liabilities, weakened significantly, recovered somewhat, and then slightly receded in the final year.
Current Ratio
PepsiCo Inc., current 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) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Current Ratio, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Current Ratio, Industry | ||||||
| Consumer Staples | ||||||
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 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets show a fluctuating trend over the analyzed periods. Starting at 23,001 million USD in 2020, there is a slight decline to 21,783 million USD in 2021, followed by a marginal decrease to 21,539 million USD in 2022. A notable increase occurs in 2023, rising significantly to 26,950 million USD, before experiencing a slight reduction to 25,826 million USD in 2024. Overall, current assets exhibit moderate variability with a peak in the penultimate year.
- Current Liabilities
- Current liabilities depict a consistent upward trend throughout the period. Beginning at 23,372 million USD in 2020, liabilities increase steadily each year, reaching 26,220 million USD in 2021, 26,785 million USD in 2022, then accelerating to 31,647 million USD in 2023, and slightly decreasing to 31,536 million USD in 2024. This trend indicates increasing short-term obligations, with the most significant rise observed between 2022 and 2023.
- Current Ratio
- The current ratio demonstrates a downward trend over the five-year span, beginning at 0.98 in 2020 and declining to 0.83 in 2021. The ratio continues to deteriorate, dropping to 0.8 in 2022, slightly recovering to 0.85 in 2023, before falling again to 0.82 in 2024. These values below 1 throughout the period suggest persistent liquidity pressure, with current liabilities consistently exceeding current assets.
- Overall Insights
- The financial data reveals that although current assets experience some growth in the later years, current liabilities increase at a more pronounced rate, contributing to a declining current ratio. This pattern indicates potentially tightening liquidity conditions, where the company's ability to cover short-term obligations with current assets becomes increasingly constrained. Monitoring of working capital management and liquidity is advisable to address this downward trend in the current ratio and mitigate potential financial risks.
Quick Ratio
PepsiCo Inc., quick 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) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Accounts and notes receivable, net | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Quick Ratio, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Quick Ratio, Industry | ||||||
| Consumer Staples | ||||||
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 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total quick assets
- The total quick assets experienced a decline from 17,955 million USD in 2020 to 14,668 million USD in 2021. Following this drop, there was a recovery to 15,511 million USD in 2022, then a notable increase to 20,818 million USD in 2023, before slightly decreasing to 19,599 million USD in 2024.
- Current liabilities
- Current liabilities showed a consistent upward trend over the five-year period. Starting at 23,372 million USD in 2020, liabilities increased annually, reaching 31,536 million USD by the end of 2024. This represents a total increase of approximately 35% over the period.
- Quick ratio
- The quick ratio, reflecting the company's short-term liquidity, declined from 0.77 in 2020 to 0.56 in 2021, indicating a reduction in the ability to cover current liabilities with quick assets. It remained relatively stable around 0.58 in 2022, improved to 0.66 in 2023, and then slightly decreased to 0.62 in 2024. The ratio has consistently been below 1.0, implying quick assets consistently fall short of covering current liabilities.
Cash Ratio
PepsiCo Inc., cash 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) | ||||||
| Cash and cash equivalents | ||||||
| Short-term investments | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Cash Ratio, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Cash Ratio, Industry | ||||||
| Consumer Staples | ||||||
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 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited a fluctuating trend over the five-year period. Starting at 9,551 million USD in 2020, there was a significant decline in 2021 and 2022, reaching a low of 5,348 million USD. However, a notable recovery occurred in 2023, with cash assets rising sharply to 10,003 million USD, before slightly decreasing to 9,266 million USD in 2024. This pattern suggests periods of cash outflow followed by strong replenishment.
- Current Liabilities
- Current liabilities increased consistently over the entire period. Beginning at 23,372 million USD in 2020, liabilities rose steadily to 31,536 million USD by 2024. This persistent upward trend indicates a growing short-term obligation profile, which may affect liquidity and working capital management.
- Cash Ratio
- The cash ratio, representing cash assets relative to current liabilities, demonstrated a downward trend from 0.41 in 2020 to a low of 0.20 in 2022. Following this decline, there was a partial recovery in 2023 and 2024, with the ratio improving to 0.32 and 0.29 respectively. Despite this rebound, the ratio in the latter years remains below the initial 2020 level, indicating a generally weaker cash position relative to liabilities.
- Summary of Financial Liquidity Trends
- Overall, the data highlights a period of declining liquidity from 2020 through 2022, as evidenced by decreasing cash assets and a falling cash ratio, coupled with rising current liabilities. The substantial increase in cash assets in 2023 improved liquidity metrics notably, although the subsequent slight decrease in 2024 suggests some volatility. The continual rise in current liabilities throughout the period suggests increased short-term financial commitments, emphasizing the importance of effective liquidity management going forward.