Enterprise Value to FCFF (EV/FCFF)
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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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Free Cash Flow to The Firm (FCFF)
PepsiCo Inc., FCFF calculation
US$ in millions
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 financial information indicates fluctuations in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. A review of the figures reveals distinct patterns in cash generation and its conversion into free cash flow available to the firm.
- Net Cash from Operations
- Net cash provided by operating activities decreased from US$11,616 million in 2021 to US$10,811 million in 2022, representing a decline. However, a substantial increase was observed in 2023, reaching US$13,442 million. This upward momentum continued, albeit at a slower pace, with figures of US$12,507 million and US$12,087 million reported for 2024 and 2025 respectively. The latter two years show a slight decrease, but remain significantly above the 2022 level.
- Free Cash Flow to the Firm (FCFF)
- FCFF followed a similar trajectory to net cash from operations, though with differing magnitudes. A decrease from US$8,083 million in 2021 to US$6,730 million in 2022 is apparent. A significant recovery occurred in 2023, with FCFF rising to US$9,246 million. This positive trend continued into 2024, reaching US$8,809 million, and further increased to US$9,616 million in 2025. The FCFF figures in 2024 and 2025, while lower than the 2023 peak, demonstrate a sustained level of cash generation for the firm.
- Relationship between Operating Cash Flow and FCFF
- The relationship between net cash from operating activities and FCFF appears relatively consistent. FCFF consistently represents a significant portion of operating cash flow each year. The difference between the two likely reflects investments in capital expenditures and other non-operating cash outflows. The observed increases in both metrics suggest improved operational efficiency and/or increased revenue generation, while the declines in 2022 indicate potential challenges in those areas during that period.
Overall, the firm demonstrates a capacity to generate substantial free cash flow, with a notable recovery and sustained performance in the later years of the observed period. The fluctuations warrant further investigation to understand the underlying drivers of these changes.
Interest Paid, Net of Tax
PepsiCo Inc., interest paid, net of tax calculation
US$ in millions
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).
2 2025 Calculation
Interest paid, tax = Interest paid × EITR
= × =
The analysis reveals a fluctuating relationship between the effective income tax rate and interest paid, net of tax, over the five-year period. Interest expense, net of tax, demonstrates a consistent upward trend, while the effective income tax rate exhibits more variability.
- Interest Paid, Net of Tax
- Interest paid, net of tax, began at 926 US$ millions in 2021. A decrease was observed in 2022, falling to 875 US$ millions. However, from 2022 onward, a clear increasing trend is present. The value rose to 1,124 US$ millions in 2023, then to 1,278 US$ millions in 2024, and further increased to 1,416 US$ millions in 2025. This represents a cumulative increase of approximately 53.1% from 2021 to 2025.
- Effective Income Tax Rate
- The effective income tax rate experienced a decline from 21.80% in 2021 to 16.10% in 2022. It then increased to 19.80% in 2023, followed by a slight decrease to 19.40% in 2024, and a further decrease to 19.00% in 2025. While fluctuating, the rate remained relatively stable between 19.00% and 21.80% throughout the period.
The increasing trend in interest paid, net of tax, may be attributable to increased borrowing, higher interest rates, or a combination of both. The effective income tax rate’s fluctuations could be due to changes in tax laws, adjustments to tax credits, or shifts in the geographic distribution of earnings. The observed divergence between the two metrics suggests that changes in interest expense are not directly correlated with changes in the effective income tax rate during this period.
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: 2025-12-27).
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 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| 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: 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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits fluctuations over the five-year period. Initial values indicate a relatively high valuation multiple, followed by a period of decline and subsequent stabilization. A detailed examination of the ratio’s components and resulting values is presented below.
- Enterprise Value (EV)
- Enterprise Value initially increased from US$267,386 million in 2021 to US$271,808 million in 2022. A subsequent decrease was observed in 2023, falling to US$264,687 million. The most significant decline occurred between 2023 and 2024, with EV dropping to US$231,967 million. A partial recovery is noted in 2025, with EV rising to US$262,352 million.
- Free Cash Flow to the Firm (FCFF)
- Free Cash Flow to the Firm decreased from US$8,083 million in 2021 to US$6,730 million in 2022. A substantial increase occurred in 2023, reaching US$9,246 million. FCFF remained relatively stable in 2024 at US$8,809 million, and continued to increase modestly in 2025 to US$9,616 million.
- EV/FCFF Ratio
- The EV/FCFF ratio began at 33.08 in 2021, increasing to 40.39 in 2022, indicating a higher valuation relative to free cash flow. The ratio then decreased significantly to 28.63 in 2023, and further to 26.33 in 2024, reflecting the decline in Enterprise Value and the increase in FCFF. The ratio stabilized in 2025 at 27.28, suggesting a relative equilibrium between valuation and cash flow generation. The initial increase in the ratio, followed by the subsequent decline, suggests a potential correction in market valuation relative to the firm’s cash flow generating capacity.
Overall, the observed trends indicate a period of valuation adjustment. The decrease in the EV/FCFF ratio from 2022 to 2024 suggests that the market may have reassessed the firm’s value, potentially due to changes in growth expectations or risk perceptions. The stabilization in 2025 implies a potential leveling off of this adjustment.