Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Profitability Ratios (Summary)
PepsiCo Inc., profitability ratios
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).
- Gross Profit Margin
- The gross profit margin displayed a slight decline from 54.82% in 2020 to 53.03% in 2022, indicating a modest decrease in the proportion of revenue retained after accounting for the cost of goods sold. However, it showed a recovery in subsequent years, rising to 54.21% in 2023 and further to 54.55% in 2024, suggesting improved cost management or pricing strategies by the end of the period.
- Operating Profit Margin
- There was a gradual downward trend in the operating profit margin from 14.32% in 2020 to 13.1% in 2023. This decrease points to increasing operational expenses or other factors affecting earnings before interest and taxes. Notably, in 2024, the margin improved to 14.03%, nearly returning to the initial level of 2020, indicating enhanced operational efficiency or cost controls implemented during that year.
- Net Profit Margin
- The net profit margin showed some fluctuations but remained relatively stable overall. It decreased slightly from 10.12% in 2020 to 9.59% in 2021, then increased to 10.31% in 2022. Despite a minor dip to 9.92% in 2023, it rose again to 10.43% in 2024. This pattern suggests resilience in bottom-line profitability amid varying operational challenges.
- Return on Equity (ROE)
- ROE experienced a decline from 52.92% in 2020 to 47.48% in 2021, indicating a reduction in the company’s ability to generate profit from shareholders' equity. This was followed by a rebound to 51.96% in 2022, a slight decrease to 49.04% in 2023, and a further increase to 53.09% in 2024. The overall trend suggests that shareholder returns mostly recovered and improved by the end of the period.
- Return on Assets (ROA)
- ROA increased steadily from 7.66% in 2020 to a peak of 9.67% in 2022, reflecting improved efficiency in utilizing assets to generate profits. Although there was a small reduction to 9.03% in 2023, ROA rose again to 9.63% in 2024. This demonstrates sustained asset profitability with only minor fluctuations over the analyzed years.
Return on Sales
Return on Investment
Gross Profit Margin
PepsiCo Inc., gross profit margin 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) | ||||||
| Gross profit | ||||||
| Net revenue | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
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
Gross profit margin = 100 × Gross profit ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Revenue
- The net revenue demonstrates a consistent upward trend over the five-year period. Starting at $70,372 million in 2020, revenue increased annually, reaching $91,854 million by 2024. The growth rate, while positive throughout, shows a slight deceleration towards the latter years, with a smaller increment from 2023 to 2024 compared to previous year-on-year changes.
- Gross Profit
- Gross profit exhibits a steady increase that parallels the growth in net revenue. From $38,575 million in 2020, gross profit rose to $50,110 million in 2024. The trend reflects successful cost management or pricing strategies, as the absolute increase is consistent with revenue growth.
- Gross Profit Margin
- The gross profit margin shows minor fluctuations over the period. Starting at 54.82% in 2020, there was a slight decline reaching its lowest point at 53.03% in 2022. However, the margin improved to 54.55% by 2024, nearly returning to the 2020 level. This indicates relative stability in profitability at the gross level, with temporary margin compression in the middle years that was subsequently reversed.
- Overall Analysis
- The company exhibits healthy growth in revenue and gross profit for the reviewed period, evidencing an expanding business or market share. While there was a small decline in gross profit margin between 2020 and 2022, the margin recuperated toward the end of the period, suggesting effective management of costs or favorable changes in the product mix or pricing. The combined trends reflect a resilient operational performance with controlled expenses relative to sales.
Operating Profit Margin
PepsiCo Inc., operating profit margin calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating profit | ||||||
| Net revenue | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Operating Profit Margin, 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
Operating profit margin = 100 × Operating profit ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Revenue
- The net revenue demonstrated a consistent upward trajectory over the five-year period. Starting at approximately $70.4 billion in 2020, it increased steadily each year, reaching over $91.8 billion by the end of 2024. The growth rate, however, appears to have moderated somewhat after 2022, with a smaller increment between 2023 and 2024 compared to previous years.
- Operating Profit
- The operating profit followed a positive trend, increasing from about $10.1 billion in 2020 to nearly $12.9 billion in 2024. This growth, while steady, maintains a consistent upward slope without significant fluctuations, indicating improving operational efficiency or profitability over the analyzed period.
- Operating Profit Margin
- The operating profit margin experienced some variability throughout the years. Beginning at 14.32% in 2020, it declined gradually to its lowest point of 13.1% in 2023. Notably, the margin rebounded in 2024 to 14.03%, which suggests a recovery in cost management or pricing power relative to revenue. Despite the dip between 2020 and 2023, the margin remained relatively stable around the 13-14% range.
- Overall Insights
- Overall, the data illustrates a company with consistently growing revenues and operating profits over the five-year period. The temporary decline in operating profit margin suggests some pressure on profitability margins, possibly due to rising costs or strategic investments, but the improvement in 2024 indicates a potential return to stronger margin performance. The steady revenue growth combined with operational profit expansion reflects positively on the company’s financial health and operational management during these years.
Net Profit Margin
PepsiCo Inc., net profit margin calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to PepsiCo | ||||||
| Net revenue | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Net Profit Margin, 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
Net profit margin = 100 × Net income attributable to PepsiCo ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to PepsiCo
- The net income demonstrates an overall upward trend over the five-year period. Starting at 7,120 million US dollars in 2020, it increased steadily each year, reaching 9,578 million US dollars in 2024. This consistent increase indicates improved profitability and effective management of expenses relative to revenue.
- Net Revenue
- Net revenue displays a steady increase from 70,372 million US dollars in 2020 to 91,854 million US dollars in 2024. The growth rate appears relatively stable year-over-year, although the increase between 2023 and 2024 is more modest compared to prior years. This trend suggests sustained demand and market presence with signs of reaching a mature phase.
- Net Profit Margin
- The net profit margin fluctuates within a narrow range between approximately 9.59% and 10.43% over the five-year span. It begins at 10.12% in 2020, experiences a slight dip in 2021 to 9.59%, rebounds to 10.31% in 2022, decreases again to 9.92% in 2023, and reaches the highest point of 10.43% by 2024. This variability indicates some changes in cost structure or pricing strategies but generally reflects a stable level of profitability relative to sales.
- Summary
- Overall, the financial data reflect a positive performance trajectory with rising net income and revenue alongside a relatively stable profit margin. While revenue growth slightly slowed toward the end of the period, profitability remained strong, suggesting effective management of operational efficiencies and cost controls. The slight fluctuations in net profit margin warrant monitoring but do not suggest significant deterioration in financial health.
Return on Equity (ROE)
PepsiCo Inc., ROE 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) | ||||||
| Net income attributable to PepsiCo | ||||||
| Total PepsiCo common shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| ROE, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROE, 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
ROE = 100 × Net income attributable to PepsiCo ÷ Total PepsiCo common shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The annual financial data for PepsiCo Inc. over the period from December 26, 2020, to December 28, 2024, demonstrates notable trends in profitability and equity performance.
- Net Income Attributable to PepsiCo
- The net income shows a consistent upward trajectory throughout the period. Starting at $7,120 million in 2020, the net income increased steadily each year, reaching $9,578 million by the end of 2024. This reflects a strong growth trend, with the most significant jump occurring between 2021 and 2022, where net income increased by approximately 17%. The continued rise in net income indicates successful operational performance and growing profitability.
- Total Common Shareholders’ Equity
- The total common shareholders’ equity also exhibits a positive development over the analyzed years. Beginning at $13,454 million in 2020, equity rose consistently to peak at $18,503 million in 2023 before slightly declining to $18,041 million in 2024. The overall increase in equity suggests that the company has been able to retain earnings and possibly raise additional capital, enhancing the company's financial base. The slight decrease in 2024 may warrant further examination but does not negate the general growth trend.
- Return on Equity (ROE)
- The return on equity presents some fluctuations but remains robust throughout the period. Initially at 52.92% in 2020, ROE decreased to 47.48% in 2021, indicating a temporary dip in efficiency or profitability relative to equity during that year. However, it rebounded to 51.96% in 2022, dipped slightly again to 49.04% in 2023, and then increased to 53.09% in 2024, the highest value recorded in the timeframe. This pattern suggests that while there have been minor variations, the company has consistently maintained a high capacity to generate profit from its equity base.
In summary, the data reveals a positive overall financial performance characterized by growing net income, expanding shareholders' equity, and sustained strongly positive ROE figures. These trends indicate effective management of equity resources and consistent profitability growth over the five-year span.
Return on Assets (ROA)
PepsiCo Inc., ROA calculation, comparison to benchmarks
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to PepsiCo | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| ROA, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROA, 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
ROA = 100 × Net income attributable to PepsiCo ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to PepsiCo
- The net income has shown a consistent upward trend over the five-year period. Starting at $7,120 million in 2020, it increased each year, reaching $9,578 million in 2024. This demonstrates a steady growth in profitability, with the most significant annual increase occurring between 2021 and 2022.
- Total Assets
- Total assets remained relatively stable from 2020 to 2022, fluctuating slightly around $92,000 million. There was a noticeable increase in 2023, where assets rose to $100,495 million, followed by a slight decrease in 2024 to $99,467 million. Overall, the asset base experienced moderate growth, particularly in the later years.
- Return on Assets (ROA)
- The Return on Assets percentage shows an overall positive trajectory throughout the period. Starting at 7.66% in 2020, ROA increased steadily to 9.67% in 2022. Although there was a slight dip to 9.03% in 2023, the ratio rebounded to 9.63% in 2024. This indicates improved efficiency in generating profit from the asset base over time, despite minor fluctuations.