PepsiCo Inc. (NASDAQ:PEP)

The liquidity position, as indicated by the observed ratios, demonstrates a generally stable profile over the five-year period. While fluctuations exist, no dramatic shifts are apparent. The current ratio remains relatively constrained, consistently below one, suggesting the company relies more heavily on asset liquidation to meet short-term obligations than on current assets alone.

Current Ratio

The current ratio exhibits a minor degree of variability, ranging from 0.80 to 0.85. It began at 0.83 in 2021, decreased slightly to 0.80 in 2022, and then increased to 0.85 in 2023. A slight decline to 0.82 was noted in 2024, followed by a return to 0.85 in 2025. This suggests a consistent, though limited, ability to cover current liabilities with current assets.

Quick Ratio

The quick ratio shows a generally improving trend. Starting at 0.56 in 2021, it increased to 0.58 in 2022 and continued to rise to 0.66 in 2023. A slight decrease to 0.62 occurred in 2024, with a further modest decline to 0.64 in 2025. This indicates an increasing, but still moderate, capacity to meet short-term obligations with the most liquid assets.

Cash Ratio

The cash ratio demonstrates more pronounced fluctuations. It decreased from 0.23 in 2021 to 0.20 in 2022, then increased significantly to 0.32 in 2023. The ratio subsequently decreased to 0.29 in both 2024 and 2025, indicating a potential shift in cash management practices or a change in the composition of current assets. The ratio remains the lowest of the three liquidity measures, highlighting a limited ability to cover immediate liabilities solely with cash and cash equivalents.

Overall, the company maintains a conservative liquidity stance. The increasing quick ratio suggests improved short-term solvency, while the relatively stable current ratio and fluctuating cash ratio indicate a consistent reliance on a broader range of current assets and potentially active cash management.

The current ratio exhibits a relatively stable pattern over the five-year period, fluctuating within a narrow range. While there are minor variations year to year, no significant or sustained upward or downward trend is apparent.

Current Ratio Trend

The current ratio began at 0.83 in 2021, decreased slightly to 0.80 in 2022, and then rose to 0.85 in 2023. A minor decline to 0.82 was observed in 2024, followed by a return to 0.85 in 2025. This suggests a consistent ability to cover short-term obligations with short-term assets, though the ratio remains below one in all observed years.

The observed values indicate that current liabilities consistently exceed current assets throughout the period. While the ratio remains relatively stable, the company consistently relies more on current liabilities than current assets to fund its short-term operations. The slight fluctuations suggest changes in the composition or timing of these assets and liabilities, but do not fundamentally alter the overall liquidity position.

Year-over-Year Changes

The largest year-over-year change occurred between 2022 and 2023, with an increase of 0.05. The change between 2023 and 2024 was a decrease of 0.03, and the change between 2024 and 2025 was an increase of 0.03. These relatively small changes suggest a consistent, managed approach to short-term financing.

Overall, the current ratio demonstrates a consistent, albeit modest, liquidity position. The company appears to maintain a similar level of short-term solvency throughout the analyzed period, despite the fluctuations in the ratio’s value.

The quick ratio exhibited a generally improving trend over the five-year period, though with some fluctuation. Initial values were relatively low, but increased over time, suggesting a strengthening short-term liquidity position.

Quick Ratio Trend

The quick ratio began at 0.56 in 2021 and rose to 0.58 in 2022, indicating a slight improvement in the ability to meet short-term obligations with highly liquid assets. A more substantial increase was observed in 2023, reaching 0.66, representing the strongest liquidity position within the observed timeframe. The ratio experienced a modest decline in 2024 to 0.62, before recovering slightly to 0.64 in 2025.

The growth in quick assets generally outpaced the growth in current liabilities, contributing to the observed improvements in the quick ratio. However, the slight decrease in the ratio from 2023 to 2024 warrants further investigation to understand the underlying drivers of this change.

Relationship between Quick Assets and Current Liabilities

Total quick assets increased from US$14,668 million in 2021 to US$21,036 million in 2025. Current liabilities also increased over the same period, moving from US$26,220 million to US$32,764 million. Despite the increase in absolute terms for current liabilities, the faster growth of quick assets resulted in the overall improvement in the quick ratio.

The quick ratio consistently remained below 1.0 throughout the period, indicating that the entity does not have enough liquid assets to cover its immediate liabilities without relying on inventory sales. However, the upward trend suggests a decreasing reliance on this potential need.

The cash ratio exhibited fluctuations over the five-year period. Initially, the ratio decreased before increasing and then stabilizing. Total cash assets and current liabilities both influenced this trend, with the cash ratio representing the proportion of current liabilities covered by immediately available cash.

Cash Ratio Trend

The cash ratio began at 0.23 in 2021, declining to 0.20 in 2022. A significant increase was then observed in 2023, reaching 0.32. Subsequently, the ratio moderated to 0.29 in both 2024 and 2025, indicating a period of stabilization.

Total Cash Assets

Total cash assets decreased from US$5,988 million in 2021 to US$5,348 million in 2022. A substantial rise occurred in 2023, with cash assets reaching US$10,003 million. The level then decreased slightly to US$9,266 million in 2024 and remained relatively stable at US$9,530 million in 2025.

Current Liabilities

Current liabilities demonstrated a consistent upward trend throughout the period. Starting at US$26,220 million in 2021, they increased to US$26,785 million in 2022, US$31,647 million in 2023, US$31,536 million in 2024, and US$32,764 million in 2025. The increase in current liabilities partially offset the impact of the increased cash assets in 2023, contributing to the observed fluctuations in the cash ratio.

The stabilization of the cash ratio in the final two years suggests a balance between cash holdings and short-term obligations. While current liabilities continued to grow, the maintenance of cash assets at a relatively high level prevented further declines in the ratio.