PepsiCo Inc. (NASDAQ:PEP)

Debt to Equity Ratio

The debt to equity ratio exhibited an overall declining trend from March 2020 to December 2021, decreasing from 3.06 to 2.51, indicating a reduction in leverage relative to shareholders' equity during this period. Following this decline, the ratio stabilized somewhat throughout 2022, fluctuating marginally around the 2.1 to 2.45 range. From early 2023 through mid-2024, the ratio remained fairly consistent between approximately 2.3 and 2.4, suggesting steady capital structure management. However, a slight upward trend emerged from late 2024 into mid-2025, with the ratio increasing from 2.46 to 2.79 before a mild decrease to 2.62, indicating a modest increase in leverage relative to equity in the most recent quarters.

Debt to Capital Ratio

The debt to capital ratio started high at 0.75 in early 2020 and increased slightly to 0.78 in mid-2020, reflecting a heavy reliance on debt financing. From late 2020 through 2022, this ratio declined gradually to a low near 0.67, suggesting a shift toward a more balanced capital structure with less debt proportionally. The ratio then trended upward again from late 2022 through mid-2025, oscillating around 0.70 to 0.74, indicating a gradual increase in the proportion of debt within total capital. Overall, the debt to capital ratio shows a moderate leverage position, with a tendency for slight variability but no extreme fluctuations.

Debt to Assets Ratio

The debt to assets ratio remained relatively stable over the entire period, starting near 0.48 in early 2020 and fluctuating modestly between 0.42 and 0.50 throughout the subsequent years. The ratio saw a minor decline from 0.48 to approximately 0.42 through 2021 and most of 2022, indicating slightly decreased debt relative to total assets. This was followed by a slight upward shift beginning towards the end of 2022 through mid-2025, where the ratio returned to the 0.45 to 0.49 range. These movements suggest consistent asset management with relatively steady use of debt financing proportional to total assets.

Financial Leverage Ratio

Financial leverage showed a notable decrease from early 2020, with the ratio dropping from 6.32 to around 5.11 by late 2021. This decline indicates a reduction in reliance on debt relative to equity and assets. During 2022, the ratio was somewhat volatile, rebounding from near 5.0 to approximately 5.38, and it remained generally stable between 5.1 and 5.5 through mid-2024. Toward the end of 2024 and into 2025, financial leverage increased moderately, rising from about 5.5 to 5.72 before decreasing slightly to 5.50. This pattern reflects a recent moderate increase in the use of debt financing, but overall financial leverage remains at a moderate level compared to the earlier period.

Total Debt

The total debt exhibited fluctuations over the observed periods. Initially, it rose from approximately $41.2 billion to a peak near $44.9 billion by mid-2020. This was followed by a gradual decline reaching around $39.1 billion by the end of 2022. Subsequently, total debt increased again, reaching a high near $51.4 billion by mid-2025, then slightly decreasing to about $50.8 billion toward the end of the last period. Overall, the trend reflects periods of both debt reduction and accumulation, with a noticeable increase in the latter stages.

Total Common Shareholders’ Equity

Common shareholders’ equity started at roughly $13.5 billion in early 2020 and experienced a moderate downward adjustment in mid-2020 before recovering steadily afterward. It peaked near $18.9 billion around mid-2022, followed by a decline near $17.1 billion by late 2022. From early 2023 to mid-2025, equity values fluctuated within the range of approximately $17 billion to $19.4 billion. The equity trend indicates relative stability with moderate growth and occasional decreases, without extreme volatility.

Debt to Equity Ratio

The debt to equity ratio showed a decreasing trend from over 3.0 in early 2020 to a low near 2.07 by late 2022, correlating with the decrease in total debt and increase in shareholders’ equity during that period. Subsequently, this ratio increased again to about 2.79 by mid-2025 before a slight reduction to approximately 2.62 at the last recorded date. The shift in the ratio suggests the company initially reduced leverage but increased it again in later periods. The ratio remained above 2.0 throughout, indicating a consistently leveraged capital structure.

Overall Observations

The company's financial leverage experienced notable changes over the timeframe. Early periods showed elevated total debt and a higher debt to equity ratio, followed by efforts to reduce leverage through decreasing debt and enhancing equity value. However, recent periods reveal a reversal with rising debt and a consequent increase in leverage ratios. Shareholders’ equity maintained a generally stable but mildly increasing trajectory, providing a buffer against debt increases. The observed dynamics suggest a strategic balancing act between debt financing and equity management in response to internal or external factors affecting capital structure.

The analysis of the quarterly financial data reveals several notable trends in the company’s capital structure and debt management over the examined periods.

Total Debt

Total debt initially increased from approximately 41.2 billion US dollars in March 2020 to a peak near 44.9 billion US dollars by June 2020. Thereafter, a gradual reduction trend is observed through to December 2022, where debt declined to just under 39.1 billion US dollars. From early 2023, total debt resumed an upward trajectory, rising to a high of about 51.4 billion US dollars by June 2025. This indicates a pattern of deleveraging followed by renewed borrowing or increased leverage in the most recent periods.

Total Capital

Total capital showed a more stable and gradually increasing trend over the same timeline. Beginning around 54.7 billion US dollars in March 2020, total capital experienced modest fluctuations but generally increased, peaking near 70.2 billion US dollars by late 2025. This steady increase in total capital implies consistent growth in the company’s financial base, likely supported by equity or retained earnings inflows alongside capital management activities.

Debt to Capital Ratio

The debt to capital ratio confirms the interaction between total debt and total capital. Initially, this ratio stood at 0.75 in March 2020, rising slightly to 0.78 by mid-2020. Following this peak, a downward adjustment occurred, with the ratio reducing to a low point around 0.67 by mid-2022, suggesting a period of de-risking or deleveraging. From early 2023 onwards, the ratio stabilized and then increased modestly to approximately 0.74 by mid-2025. This trend indicates a balanced approach to leverage, maintaining a relatively high but manageable dependence on debt financing within the capital structure.

Overall, the data suggest the company actively managed its debt levels during the initial phases, likely responding to external economic conditions or strategic priorities by reducing leverage. The subsequent phases exhibit renewed debt accumulation aligned with growth or investment actions. The gradual rise in total capital during the entire period supports a sustainable capital base, while the debt to capital ratio remains within a range that reflects moderate leverage, implying a deliberate capital structure strategy aimed at balancing risk and financial flexibility.

Total Debt

The total debt exhibits a fluctuating but generally increasing trend over the analyzed periods. Initially, total debt rose from $41,243 million to a peak of $44,978 million by mid-2020, then exhibited a gradual decline until the end of 2022, reaching its lowest point around $39,071 million. After this period, debt levels began to climb again, showing a marked increase through 2023 and into 2024, ultimately reaching above $51,000 million by mid-2025. This pattern indicates periods of debt reduction followed by renewed borrowing or capital raising activity.

Total Assets

Total assets show an overall upward trajectory across the reported quarters. Starting at approximately $85,062 million in early 2020, assets increased steadily with minor fluctuations, surpassing $100,000 million by late 2021 and continuing to rise gradually thereafter. The latest values approach $106,558 million by mid-2025. This growth in asset base suggests ongoing expansion or acquisition activities and an accumulation of resources.

Debt to Assets Ratio

The debt to assets ratio illustrates a relative decline in leverage from early 2020 through 2022, dropping from 0.48 to around 0.42. This decline indicates that total asset growth outpaced debt accumulation during this period, improving financial stability. However, starting in 2023, the ratio returned to approximately 0.45 and continued to increase through 2025, reaching nearly 0.49. This rising leverage ratio corresponds with the renewed increase in total debt, signaling a shift toward higher reliance on debt financing relative to assets.

Overall Analysis

The financial trend displays a phase of deleveraging during 2020 to 2022, with total debt being reduced and assets steadily increasing, resulting in an improved debt-to-asset position. Subsequently, from 2023 onward, the company appears to have embarked on increased borrowing, reflected in rising total debt and a higher leverage ratio despite continuous asset growth. This pattern may reflect strategic decisions to fund growth initiatives or manage capital structure in a changing financial environment. Continued monitoring of the debt to assets ratio alongside asset growth will be critical to assess ongoing financial health and risk exposure.

The analysis of the financial data reveals several notable trends concerning the company's total assets, shareholders’ equity, and financial leverage over multiple quarterly periods.

Total Assets

Total assets showed a general upward trend from approximately $85.1 billion in early 2020 to over $106.5 billion by the last reported quarter in 2025. While there were minor fluctuations, the overall trajectory indicates gradual asset growth. Peaks in asset values occurred around late 2023 and into 2025, suggesting sustained expansion or investment activities during these periods. A few quarters exhibited slight declines or stabilization, but these did not significantly detract from the long-term positive trend.

Total Common Shareholders’ Equity

Shareholders’ equity experienced a notable increase from around $13.5 billion in early 2020 to a peak near $19.5 billion by late 2024. However, this growth was not entirely linear, with some quarters showing declines or dips, particularly toward the end of 2022 and intermittently in 2025. Despite these fluctuations, the overall pattern conveys a strengthening equity base, which may reflect retained earnings, capital injections, or other equity-increasing activities. The equity levels generally aligned with the growing asset base but with visible volatility.

Financial Leverage (Ratio)

The financial leverage ratio, measuring the proportion of total assets financed by shareholders’ equity, displayed a declining trend from a high of approximately 7.17 in mid-2020 to around 4.98 by late 2022. This indicates a reduction in leverage, suggesting a more balanced or equity-supported capital structure during this timeframe. After late 2022, the ratio modestly increased to fluctuate around the mid-5 range through 2025, which may indicate a moderate rise in leverage or increased use of liabilities relative to equity. Nonetheless, this level of leverage remains lower than the early 2020 peak, suggesting more prudent financial management or changes in capital structure strategies over the period.

In summary, the company exhibited asset growth and generally increasing shareholders’ equity over the span of analysis. The financial leverage ratio declined substantially initially, reflecting deleveraging, before stabilizing at a moderate level. These patterns suggest a focus on strengthening the equity base while managing debt levels to maintain financial flexibility and stability.