Enterprise Value to FCFF (EV/FCFF)
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PepsiCo Inc. pages available for free this week:
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
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Free Cash Flow to The Firm (FCFF)
PepsiCo Inc., FCFF calculation
US$ in millions
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).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities shows a general upward trend over the observed periods, increasing from 10,613 million US dollars in 2020 to a peak of 13,442 million US dollars in 2023. This indicates improving operational cash flows, suggesting effective management of cash from core business operations. However, there is a slight decline in 2024 to 12,507 million US dollars, which merits monitoring to determine if this is a temporary fluctuation or the beginning of a downward trend.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm exhibits more variability compared to operating cash flow. Starting at 7,342 million US dollars in 2020, it rose to 8,083 million in 2021 but then declined to 6,730 million in 2022. This dip was followed by a significant rebound in 2023 to 9,246 million, and a slight decrease to 8,809 million in 2024. The fluctuations in FCFF may reflect changes in capital expenditures or operational efficiency, suggesting the need for closer scrutiny of investment activities and working capital management.
- Overall Insights
- The operational cash flow improvement suggests strong core business performance, but the variability in free cash flow implies inconsistencies in capital expenditure or other cash outflows. While both metrics are healthy in absolute terms, the dip in FCFF during 2022 and the decrease in operating cash flow in 2024 could indicate temporary pressures or strategic decisions impacting cash availability. Continuous monitoring is recommended to understand the drivers behind these fluctuations.
Interest Paid, Net of Tax
PepsiCo Inc., interest paid, net of tax calculation
US$ in millions
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).
2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibits some fluctuation over the five-year period. Starting at 20.9% in 2020, it increased slightly to 21.8% in 2021, before declining more substantially to 16.1% in 2022. In the subsequent years, the rate rose again to 19.8% in 2023 and then decreased slightly to 19.4% in 2024. Overall, despite some volatility, the rate does not show a clear upward or downward trend but rather oscillates within a range of approximately 16% to 22%.
- Interest Paid, Net of Tax
- The interest paid, net of tax, measured in millions of US dollars, shows a general increasing trend across the period. The value starts at $914 million in 2020, with a slight increase to $926 million in 2021, followed by a decrease to $875 million in 2022. However, from 2022 onwards, there is a notable upward movement, with payments rising to $1,124 million in 2023 and further climbing to $1,278 million in 2024. This upward trend in interest expenses in the latter years may suggest higher debt levels or increased borrowing costs.
Enterprise Value to FCFF Ratio, Current
PepsiCo Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Coca-Cola Co. | |
| Mondelēz International Inc. | |
| Philip Morris International Inc. | |
| EV/FCFF, Sector | |
| Food, Beverage & Tobacco | |
| EV/FCFF, Industry | |
| Consumer Staples | |
Based on: 10-K (reporting date: 2024-12-28).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
PepsiCo Inc., historical EV/FCFF 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) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| EV/FCFF, 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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated a general upward trend from 2020 through 2022, increasing from $220,903 million to a peak of $271,808 million. However, the value declined in the subsequent years, reaching $231,967 million by the end of 2024. This reflects a significant rise followed by a notable reduction, suggesting market valuation adjustments or changes in the company’s financial outlook.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm showed some variability over the period. It increased from $7,342 million in 2020 to $8,083 million in 2021, then declined to $6,730 million in 2022. There was a recovery in 2023 with $9,246 million and a slight decrease to $8,809 million in 2024. This fluctuation indicates variations in operational cash generation, with a strong rebound after 2022 followed by a moderate decline.
- EV to FCFF Ratio
- The EV/FCFF ratio, which indicates valuation relative to cash flow, increased from 30.09 in 2020 to a peak of 40.39 in 2022. Following this peak, the ratio declined significantly to 26.33 in 2024. The rising ratio up to 2022 suggests that enterprise value was growing faster than cash flow, potentially indicating increased market optimism or overvaluation. The subsequent decline suggests a correction, with valuation becoming more aligned or conservative relative to cash flow generation.