Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Profitability Ratios (Summary)
PepsiCo Inc., profitability ratios
Based on: 10-K (reporting date: 2025-12-27), 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).
The profitability metrics demonstrate a generally stable performance with some fluctuations over the five-year period. Gross profit margin exhibited a slight upward trend initially, peaking in 2024 before experiencing a modest decline in 2025. Operating and net profit margins showed more variability, while return on equity and return on assets also displayed shifts throughout the period.
- Gross Profit Margin
- The gross profit margin remained relatively high and consistent, ranging from 53.03% to 54.55%. An increase is observed from 53.03% in 2022 to 54.55% in 2024, followed by a slight decrease to 54.15% in 2025. This suggests consistent efficiency in production and cost of goods sold management, with a minor reduction in that efficiency in the most recent year.
- Operating Profit Margin
- Operating profit margin experienced a decline from 14.04% in 2021 to 13.10% in 2023, then recovered to 14.03% in 2024 before decreasing significantly to 12.24% in 2025. This indicates fluctuations in operational efficiency and control of operating expenses. The decline in 2025 warrants further investigation.
- Net Profit Margin
- Net profit margin showed an initial increase from 9.59% in 2021 to 10.43% in 2024, followed by a notable decrease to 8.77% in 2025. This suggests that while profitability improved initially, factors impacting net income, such as taxes or non-operating expenses, negatively affected results in the final year.
- Return on Equity (ROE)
- Return on equity demonstrated considerable volatility. It increased from 47.48% in 2021 to a peak of 53.09% in 2024, then decreased substantially to 40.38% in 2025. This suggests changes in the effective use of shareholder equity to generate profits. The significant drop in 2025 is a key area for further analysis.
- Return on Assets (ROA)
- Return on assets followed a similar pattern to ROE, increasing from 8.25% in 2021 to 9.67% in 2022, fluctuating around 9% for the next two years, and then declining to 7.67% in 2025. This indicates a decreasing efficiency in utilizing assets to generate earnings in the most recent year.
Overall, the period showed a generally positive trend in profitability until 2025, when a noticeable decline occurred across most metrics. The decrease in operating profit margin, net profit margin, return on equity, and return on assets in 2025 suggests potential challenges impacting overall financial performance and warrants a more detailed investigation into the underlying causes.
Return on Sales
Return on Investment
Gross Profit Margin
PepsiCo Inc., gross profit margin calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| 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: 2025-12-27), 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).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited a generally positive trend over the five-year period. While fluctuations were present, the metric demonstrated an overall increase from 2021 to 2024, followed by a slight decrease in the most recent year.
- Gross Profit Margin Trend
- In 2021, the gross profit margin stood at 53.35%. A minor decrease was observed in 2022, with the margin declining to 53.03%. Subsequent years showed improvement, reaching 54.21% in 2023 and peaking at 54.55% in 2024. The most recent year, 2025, saw a slight contraction, with the gross profit margin settling at 54.15%.
The consistent increase in gross profit from US$42,399 million in 2021 to US$50,859 million in 2025 contributed to the overall positive trend in the gross profit margin. Net revenue also increased over the period, moving from US$79,474 million to US$93,925 million. The rate of gross profit growth generally outpaced that of net revenue, particularly between 2022 and 2024, driving margin expansion. The slight decrease in the gross profit margin in 2025 suggests a potential moderation in the company’s ability to control production costs or maintain pricing power relative to revenue growth.
- Relationship between Gross Profit and Net Revenue
- The growth in both gross profit and net revenue indicates a healthy expansion of the business. The consistent gross profit margin above 53% throughout the period suggests effective cost management and pricing strategies. However, the slight dip in margin in 2025 warrants further investigation to determine the underlying causes and potential implications.
Overall, the gross profit margin demonstrates a strong performance with a generally upward trajectory. The recent stabilization and slight decline suggest a need for continued monitoring of cost structures and revenue generation strategies.
Operating Profit Margin
PepsiCo Inc., operating profit margin calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-27), 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).
1 2025 Calculation
Operating profit margin = 100 × Operating profit ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited fluctuations over the five-year period. Initial values demonstrated a decline followed by a recovery, and then a subsequent decrease.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 14.04% in 2021, decreased to 13.33% in 2022, and continued a slight downward trend to 13.10% in 2023. A notable increase was observed in 2024, with the margin rising to 14.03%. However, this was followed by a decrease in 2025, falling to 12.24%.
- Operating Profit Margin - 2021-2023
- From 2021 to 2023, the operating profit margin experienced a consistent, albeit moderate, decline. This suggests potential pressures on profitability during this period, possibly related to increasing costs or pricing challenges. The decrease from 14.04% to 13.10% represents a cumulative reduction of 0.94 percentage points.
- Operating Profit Margin - 2023-2024
- The year 2024 marked a reversal of the prior trend, with the operating profit margin increasing to 14.03%. This indicates improved operational efficiency or a more favorable pricing environment. The increase of 0.93 percentage points from 2023 suggests a positive shift in the company’s ability to generate profit from its core operations.
- Operating Profit Margin - 2024-2025
- The operating profit margin decreased significantly in 2025, dropping to 12.24%. This represents a substantial decline of 1.79 percentage points from the previous year. This decrease warrants further investigation to determine the underlying causes, such as increased input costs, competitive pressures, or changes in sales mix.
The operating profit itself generally increased over the period, except for a decrease in 2025. However, the growth in operating profit did not consistently translate into a higher operating profit margin, particularly evident in the final year.
- Relationship between Operating Profit and Margin
- While operating profit increased from US$11,162 million in 2021 to US$12,887 million in 2024, the operating profit margin did not follow a strictly proportional increase. The decrease in margin in 2025, despite a net revenue of US$93,925 million, suggests that revenue growth alone is insufficient to maintain or improve profitability. Cost control and pricing strategies are likely key factors influencing the margin.
Net Profit Margin
PepsiCo Inc., net profit margin calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-27), 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).
1 2025 Calculation
Net profit margin = 100 × Net income attributable to PepsiCo ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited a generally positive trend from 2021 to 2024, followed by a decline in the most recent year presented. This indicates fluctuating profitability relative to revenue over the five-year period.
- Net Profit Margin Trend
- In 2021, the net profit margin stood at 9.59%. An increase was observed in 2022, reaching 10.31%, suggesting improved profitability. This upward trend continued into 2023 with a margin of 9.92%, and further strengthened in 2024, peaking at 10.43%. However, 2025 saw a notable decrease to 8.77%, representing a reduction in profitability compared to the previous four years.
The consistent increase in net profit margin from 2021 through 2024 coincided with increasing net revenue, suggesting effective cost management or pricing strategies. The decline in 2025, despite continued revenue growth, indicates that costs or other factors impacting net income grew at a faster rate than revenue.
- Relationship to Net Income and Net Revenue
- Net income attributable to PepsiCo increased from US$7,618 million in 2021 to US$9,578 million in 2024, mirroring the rise in net profit margin. Net revenue also demonstrated consistent growth, moving from US$79,474 million in 2021 to US$91,854 million in 2024. The subsequent decrease in net income to US$8,240 million in 2025, alongside a further revenue increase to US$93,925 million, directly contributed to the observed decline in net profit margin.
The fluctuation in net profit margin warrants further investigation to determine the underlying causes of the 2025 decrease. Potential areas of inquiry include changes in the cost of goods sold, operating expenses, or non-operating items.
Return on Equity (ROE)
PepsiCo Inc., ROE calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-27), 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).
1 2025 Calculation
ROE = 100 × Net income attributable to PepsiCo ÷ Total PepsiCo common shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited a generally positive trend from 2021 to 2024, followed by a decline in the most recent year presented. Net income attributable to PepsiCo increased from 2021 to 2023, then continued to rise in 2024 before decreasing in 2025. Total common shareholders’ equity consistently increased over the period, with the exception of a slight decrease between 2023 and 2024.
- ROE Trend
- ROE increased from 47.48% in 2021 to 51.96% in 2022, representing a growth of approximately 9.5%. This upward trajectory continued into 2023, reaching 49.04%, before experiencing a more substantial increase to 53.09% in 2024. However, in 2025, ROE decreased to 40.38%, indicating a notable shift in profitability relative to equity.
- Net Income Impact
- Net income demonstrated growth from US$7,618 million in 2021 to US$9,074 million in 2023, contributing to the initial rise in ROE. The further increase in net income to US$9,578 million in 2024 likely fueled the peak ROE value observed that year. The subsequent decline in net income to US$8,240 million in 2025 partially explains the decrease in ROE.
- Shareholders’ Equity Impact
- Total shareholders’ equity increased steadily from US$16,043 million in 2021 to US$20,406 million in 2025. While generally supportive of ROE, the increase in equity base in 2025, coupled with the decrease in net income, resulted in a lower ROE compared to prior years. The slight decrease in equity from 2023 to 2024 did not prevent ROE from reaching its highest point in the observed period.
The fluctuations in ROE appear to be influenced by the combined effect of changes in net income and shareholders’ equity. The substantial decline in ROE in 2025 warrants further investigation to determine the underlying causes and potential implications for future performance.
Return on Assets (ROA)
PepsiCo Inc., ROA calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-27), 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).
1 2025 Calculation
ROA = 100 × Net income attributable to PepsiCo ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited a generally positive trajectory from 2021 to 2024, followed by a decline in the most recent period. This indicates fluctuating efficiency in utilizing assets to generate profit. A detailed examination of the ROA alongside its constituent components – net income and total assets – provides further insight into these performance shifts.
- Overall Trend
- The ROA increased from 8.25% in 2021 to 9.67% in 2022, representing a substantial improvement in asset utilization. This positive trend continued, albeit at a slower pace, reaching 9.63% in 2024. However, in 2025, the ROA decreased to 7.67%, signaling a reduction in profitability relative to the asset base.
- Net Income Influence
- Net income attributable to PepsiCo generally increased from US$7,618 million in 2021 to US$9,578 million in 2024. This growth in net income contributed significantly to the rising ROA observed during this period. The subsequent decrease in net income to US$8,240 million in 2025 is a primary driver of the ROA decline.
- Asset Base Influence
- Total assets remained relatively stable between 2021 and 2022, fluctuating around US$92 billion. A notable increase in total assets occurred in 2023, reaching US$100,495 million, and continued to rise to US$107,399 million in 2025. While the asset growth generally supported higher net income in 2023 and 2024, the larger asset base in 2025, combined with lower net income, resulted in a lower ROA.
The observed fluctuations suggest a complex interplay between profitability and asset management. While the company demonstrated an ability to improve asset utilization between 2021 and 2024, the decline in ROA during 2025 warrants further investigation to determine the underlying causes and potential corrective actions.