PepsiCo Inc. (NASDAQ:PEP)

Debt to Equity Ratio

The debt to equity ratio exhibited a general declining trend from March 2020 through the end of 2021, decreasing from 3.06 to 2.51. This indicates a gradual reduction in reliance on debt relative to equity over this period. However, beginning in early 2022, the ratio showed some fluctuations, with values oscillating between approximately 2.07 and 2.64 up to March 2025. Despite these fluctuations, the ratio remained notably lower compared to 2020, suggesting a more stable and possibly conservative capital structure in recent periods.

Debt to Capital Ratio

The debt to capital ratio followed a similar trajectory to the debt to equity ratio, decreasing steadily from 0.75 in March 2020 to a low around 0.67 by late 2022. Post-2022, the ratio stabilized with minor increases, fluctuating between 0.69 and 0.73 through March 2025. This pattern suggests an improved balance between debt and total capital initially, with stabilization indicating a maintained capital structure in subsequent periods.

Debt to Assets Ratio

The debt to assets ratio showed a moderate decline from 0.48 in March 2020 to around 0.42 by the end of 2022, reflecting a reduction in debt relative to the company's total asset base. Afterward, the ratio slightly increased and fluctuated between 0.44 and 0.48 from early 2023 to the first quarter of 2025. The fluctuations suggest that while the company maintained a fairly consistent approach to managing debt against assets, there was some increased leverage towards later periods.

Financial Leverage Ratio

The financial leverage ratio decreased markedly from 6.32 in March 2020 to about 4.98 toward the third quarter of 2022, indicating a reduction in the use of debt relative to shareholders’ equity financing. From late 2022 onward, the ratio increased slightly, moving between 5.11 and 5.53 up to the first quarter of 2025, which may signal a modest shift back towards greater leverage. Overall, the ratio remained lower than early 2020 levels, consistent with a trend towards moderate leverage management.

The analyzed financial data reveals the evolution of debt, equity, and debt-to-equity ratio over multiple quarters. The trends identified provide insights into the company’s financial structure and leverage management during the observed periods.

Total Debt

Total debt exhibits a fluctuating but generally upward trajectory from March 2020 through March 2025. Beginning at approximately 41.2 billion US dollars in March 2020, total debt peaked around December 2024 at approximately 48.5 billion US dollars. There is a notable decline from mid-2020 to early 2022, with debt decreasing from roughly 44.9 billion to 39.1 billion US dollars, followed by a gradual increase again from early 2023 to the end of the dataset.

Total Common Shareholders’ Equity

Common shareholders’ equity shows a steady overall increase with some variability. Starting at about 13.5 billion US dollars in March 2020, equity grew to approximately 19.5 billion by September 2024 before showing a slight decline toward March 2025 to around 18.4 billion US dollars. Growth in equity was more consistent from mid-2020 through early 2023, with occasional minor reductions noted thereafter.

Debt to Equity Ratio

The debt-to-equity ratio demonstrates a clear downward trend from March 2020 until late 2022, decreasing from a high of around 3.6 to approximately 2.07. This decline indicates an improvement in the relative equity position against debt during this period. However, beginning in late 2022 and extending through March 2025, the ratio trends upward again, rising from roughly 2.28 to 2.64. This suggests an increase in leverage or slower growth in equity relative to debt in the most recent quarters.

Overall, the company’s financial leverage has moderated substantially following the initial period but has shown signs of increasing leverage again in the latest quarters. The growth in total equity generally supports the capital structure, but the recent rise in total debt relative to equity indicates a cautious stance might be warranted regarding future debt management. These observed patterns highlight a dynamic balance between utilizing debt financing and maintaining shareholder equity.

The analysis of the quarterly financial data reveals notable trends in the company's debt structure and capitalization over the observed periods.

Total Debt

The total debt exhibited an initial increase from March 2020 to June 2020, rising from approximately 41.2 billion USD to around 44.98 billion USD. Thereafter, a general decline was observed, with debt decreasing gradually to about 39.07 billion USD by December 2022. However, from early 2023 onwards, the total debt resumed an upward trajectory, reaching a peak of approximately 48.5 billion USD by March 2025. This pattern indicates a cyclical debt management strategy with phases of debt reduction followed by accumulation.

Total Capital

Total capital followed a slightly fluctuating but overall increasing trend throughout the periods. Starting at around 54.7 billion USD in March 2020, capital increased moderately with minor fluctuations, reaching approximately 58.8 billion USD by March 2023. Post-2023, there was continued growth, reaching nearly 66.9 billion USD by March 2025. This steady growth in capital base indicates reinforced equity or retained earnings contributing alongside debt financing.

Debt to Capital Ratio

The debt to capital ratio reflects the proportion of debt financing relative to overall capital. The ratio began high at 0.75 in March 2020, increasing briefly to 0.78 by June 2020, indicating a heavier reliance on debt shortly after the pandemic onset. Following this, there was a consistent decline to a low of 0.67 in September 2022, pointing to deleveraging efforts or capital growth outpacing debt. Post this period, the ratio stabilized and mildly increased, fluctuating between 0.7 and 0.73 through the subsequent quarters until March 2025. The trend suggests a balanced leverage approach maintained in recent periods.

In summary, the company's financial structure shows an initial reactive increase in debt possibly linked to external conditions, followed by strategic deleveraging until late 2022. Subsequently, both debt and total capital increased, with the leverage ratio moderating around 0.7, reflecting a maintained balance between debt and equity financing. The trends suggest prudent financial management with adaptive responses to changing economic circumstances.

The analysis of the quarterly financial data reveals several important trends regarding the company's leverage and asset base over the observed periods.

Total Debt

An initial increase in total debt is observed from March 2020 through June 2020, rising from approximately 41.2 billion USD to roughly 45.0 billion USD. Following this peak, there is a general declining trend with fluctuations throughout the subsequent quarters until around December 2022, where total debt decreases to nearly 39.1 billion USD. From early 2023 onward, total debt shows a renewed upward trend, increasing consistently and reaching about 48.5 billion USD by March 2025, the final period noted.

Total Assets

Total assets demonstrate a gradual increase from about 85.1 billion USD in March 2020 to peaking near 100.5 billion USD in the fourth quarter of 2021. Subsequent quarters show slight volatility but overall stabilization in the asset base, fluctuating within a narrow range close to 99.5 to 101.7 billion USD through the last recorded date in March 2025.

Debt to Assets Ratio

The debt to assets ratio starts at 0.48 in March 2020, ascends slightly to 0.50 in June 2020, and proceeds on a general downward path reaching a low of 0.42 between June 2022 and December 2022. Following this trough, the ratio increases again, stabilizing around 0.45 from early 2023 through to March 2025, with a final rise to 0.48 in March 2025, coinciding with increased total debt and stable asset levels.

In summary, the financial leverage, as measured by the debt to assets ratio, has experienced an initial increase, a mid-term decrease, and a subsequent moderate increase returning towards initial levels by the end of the period. Total assets have generally grown over the timeframe with stabilization in later quarters, while total debt has exhibited a more cyclical pattern with a recent upward movement. These observations indicate periods of deleveraging followed by renewed borrowing, suggesting a dynamic approach to capital structure management in response to evolving business conditions.

Total Assets

The total assets exhibit an overall increasing trend from March 2020 through March 2025. Starting at approximately $85.1 billion in March 2020, there is a steady rise, peaking near $100.5 billion around December 2023. Following this peak, the assets show slight fluctuations but remain close to the $100 billion mark, ending at approximately $101.7 billion in March 2025. This gradual growth over the five-year period suggests expansion or asset accumulation, with some short-term volatility particularly noticeable towards the end of 2022 and early 2023.

Total PepsiCo Common Shareholders’ Equity

The common shareholders’ equity also demonstrates a general upward trajectory, with notable variability across quarters. Beginning at around $13.5 billion in March 2020, equity slightly declined by mid-2020, then resumed growth, reaching a peak of roughly $19.5 billion during late 2023 and early 2024. However, there is some retracement observed afterward, decreasing to approximately $18.4 billion by March 2025. This increase over the period indicates strengthening equity base, though some quarterly decreases may reflect dividend payments, share repurchases, or other equity adjustments.

Financial Leverage

The financial leverage ratio, defined as total assets divided by shareholders’ equity, shows a clear declining trend from over 7.1 times in June 2020 to around 5.1 times toward the end of 2022. This decline suggests a reduction in reliance on debt or an improvement in equity financing during this timeframe. From 2023 onward, the leverage ratio stabilizes with minor fluctuations, hovering between approximately 5.1 and 5.5, indicating consistent capital structure management. The initial high leverage early in the observed period could be linked to strategies or economic conditions at that time, while the subsequent decrease reflects a move toward a more balanced financial structure.