PepsiCo Inc. (NASDAQ:PEP)

The analysis of the quarterly liquidity ratios reveals a fluctuating but generally stable short-term financial position over the observed periods.

Current Ratio

The current ratio exhibits variability within a range roughly between 0.78 and 0.95. Peaks are observed around September 2021 and March 2024, reaching close to or above 0.9, which suggests intervals where current assets significantly exceed current liabilities. Conversely, troughs appear primarily towards the end of 2022 and mid-2025, with values nearing 0.78 to 0.8, indicating periods of tighter liquidity. The trend does not demonstrate a consistent upward or downward direction but rather cyclical fluctuations, pointing to periodic changes in working capital management or seasonality effects.

Quick Ratio

The quick ratio shows a similar oscillation pattern to the current ratio but consistently registers lower values, ranging approximately from 0.56 to 0.68. Peaks near 0.68 coincide with several periods such as September 2021, September 2023, and September 2025, signaling relatively stronger liquid asset coverage excluding inventory. The lowest points near 0.56 to 0.58 suggest diminished immediate liquidity in some quarters. This steady but variable ratio reflects management's cautious balancing of quick assets against current liabilities without significant long-term trend changes.

Cash Ratio

The cash ratio, being the most conservative liquidity measure, remains significantly lower than both the current and quick ratios, generally ranging from 0.2 to 0.32. Noticeable peaks occur at the end of 2023 with a ratio near 0.32 and subsequent near-term periods, indicating higher cash and cash equivalents on hand. Conversely, declines toward values close to 0.2 at various points suggest reduced cash levels relative to current liabilities. This ratio's variability signifies fluctuating cash management strategies, possibly linked to operational cash flow cycles or strategic liquidity reserves.

Overall, the liquidity ratios indicate that the company maintains a reasonable, albeit somewhat tight, short-term liquidity position. The ratios do not reach levels typically considered very robust (e.g., current ratios above 1), highlighting a reliance on efficient working capital use. The recurring fluctuations suggest potential seasonal or operational influences rather than structural liquidity issues. The consistent gap between the current, quick, and cash ratios confirms the presence of significant inventory and receivables within current assets, with cash representing only a modest fraction of total current assets throughout the periods analyzed.

The analysis of the quarterly financial data reveals several trends related to the liquidity position over the observed periods.

Current Assets

Current assets show a fluctuating yet generally upward trend over time. Starting from a value of 21,196 million US dollars in March 2021, the figure increases with intermittent decreases. Notably, there are significant rises in mid and late 2023, peaking around 28,649 million in September 2023. Following this, current assets slightly decrease but remain relatively high, ending near 28,722 million US dollars by September 2025.

Current Liabilities

Current liabilities generally increase throughout the quarters, starting at 22,693 million US dollars in March 2021 and rising to a peak of approximately 36,396 million US dollars by June 2025. This rise is not completely steady; some quarters manifest slight decreases or stabilization, but the overarching trend indicates growing short-term obligations.

Current Ratio

The current ratio consistently remains below 1, indicating that current liabilities exceed current assets in most quarters. It begins at 0.93 and declines to values fluctuating between roughly 0.78 and 0.91 over the periods. The lowest recorded ratio is about 0.78, noted in September 2025, reflecting a weaker liquidity position. Some quarters show a modest recovery in the current ratio, but the overall trend suggests a persistent liquidity challenge.

In summary, the financial data illustrate that while current assets have generally increased over the timeframe, current liabilities have increased at a faster pace, leading to a consistently low current ratio below 1. This indicates potential pressure on the company's short-term liquidity, as current liabilities exceed current assets in nearly all observed quarters. The periodic fluctuations in both assets and liabilities suggest active management of working capital, but the persistent sub-1 current ratio underscores the need for ongoing scrutiny of liquidity risk.

The financial analysis of the quarterly data reveals several key trends related to liquidity positions and working capital management.

Total Quick Assets

The total quick assets show fluctuations over the analyzed periods, with values generally ranging between approximately $15.5 billion and $22 billion. Initially, there is mild volatility with a slight upward trend from around $15.5 billion in early 2021 up to nearly $22 billion in late 2023. Following this peak, the amount experiences a slight decline before rising back above $21 billion by late 2025. This indicates the company maintains a substantial level of liquid assets, which vary moderately but remain robust overall.

Current Liabilities

Current liabilities have followed an overall increasing trend throughout the periods reviewed. Starting near $22.7 billion in early 2021, liabilities steadily increase with some fluctuations, reaching a high around $36.4 billion by mid-2025. This progressive rise suggests a growing short-term obligation burden that the company needs to manage, possibly reflecting greater operational scale, increased payables, or other short-term financial commitments.

Quick Ratio

The quick ratio, a measure of the company's ability to meet short-term obligations with its most liquid assets, remains below 1.0 throughout the timelines, indicating current quick assets are consistently insufficient to fully cover current liabilities. The ratio fluctuates between 0.56 and 0.68, with no clear upward or downward long-term trend. Periods of slight improvement around late 2021 and late 2023 are observed, but these gains are often followed by dips, showing persistent liquidity constraints that require monitoring.

Overall, the data suggests the company maintains a significant liquidity buffer but faces steadily increasing current liabilities, which constrain its quick ratio below the ideal threshold of 1. While the quick assets fluctuate, they have not kept pace with the rising liabilities, indicating potential liquidity pressure. Continued attention to managing short-term obligations and optimizing liquid asset levels is advisable to sustain financial stability.

The analysis of the quarterly financial metrics reveals several patterns and fluctuations over time. Total cash assets exhibit a cyclical trend with noticeable peaks and troughs. Starting from a high point in early 2021, cash assets declined by mid-2021, rose again by late 2021, and then experienced a downward trajectory through early 2023. A significant increase is observed during mid to late 2023, reaching a peak before declining somewhat but stabilizing towards the end of the observed period in 2025.

Current liabilities, on the other hand, show a generally upward trend throughout the period. Beginning at approximately 22,693 million USD, liabilities steadily increased with some fluctuations, reaching a maximum around mid-2024, before slightly declining but remaining elevated near the end of the data set in 2025. This indicates increased short-term financial obligations over time, which may impact liquidity management.

The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, fluctuates within a narrow range but generally remains below 0.35. The ratio demonstrates cyclical behavior, reflecting the interplay between cash assets and current liabilities. Lower points in the cash ratio coincide with periods of elevated current liabilities and/or decreased cash assets, pointing to potential pressures on short-term liquidity. Despite some improvements in the cash ratio seen in late 2023 and early 2024, the overall liquidity position remains modest.

Total Cash Assets

Exhibits cyclical fluctuations with peaks in early 2021, late 2023, and stability into 2025; the highest level is noted near September 2023 with over 10 billion USD. The lowest points are seen roughly mid-2022 and early 2023, suggesting variability in cash holdings.

Current Liabilities

Displays a steady increase over time from about 22.7 billion USD to peaks over 36 billion USD in 2025, reflecting growing short-term financial obligations. Some minor declines occur but the general direction is upward, indicating rising liabilities.

Cash Ratio

Remains below 0.35 throughout, with cyclical variations linked to changes in cash assets and liabilities. Periods of lower cash ratio (around 0.20) align with higher liabilities and lower cash reserves, potentially signaling short-term liquidity challenges.

Overall, the data indicates that while cash assets fluctuate significantly, liabilities are trending upwards steadily, exerting pressure on liquidity ratios. Maintaining liquidity coverage appears to be a consistent challenge, with periodic cycles of improved cash holdings providing some relief. Strategic focus on managing current liabilities or bolstering cash reserves may be necessary to improve short-term financial stability.