Pepsico’s financial ratio analysis

Financial ratio analysis of pepsico

Financials

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	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	TTM
Revenue USD Mil	32,562	35,137	39,474	43,251	43,232	57,838	66,504	65,492	66,415	66,683	66,277
Gross Margin %	56.5	55.1	54.3	52.9	53.5	54.1	52.5	52.2	53.0	53.7	53.9
Operating Income USD Mil	5,922	6,439	7,170	6,935	8,044	8,332	9,633	9,112	9,705	9,581	9,571
Operating Margin %	18.2	18.3	18.2	16.0	18.6	14.4	14.5	13.9	14.6	14.4	14.4
Net Income USD Mil	4,078	5,642	5,658	5,142	5,946	6,320	6,443	6,178	6,740	6,513	6,518
Earnings Per Share USD	2.39	3.34	3.41	3.21	3.77	3.91	4.03	3.92	4.32	4.27	4.29
Dividends USD	1.01	1.16	1.43	1.65	1.78	1.89	2.03	2.13	2.24	2.53	2.62
Payout Ratio %	42.3	34.7	41.8	51.4	47.1	48.3	50.2	54.2	51.8	59.4	61.0
Shares Mil	1,669	1,686	1,656	1,602	1,577	1,614	1,597	1,575	1,560	1,527	1,518
Book Value Per Share USD	8.65	9.43	10.71	7.77	10.71	13.36	13.14	14.41	15.85	11.69	10.72
Operating Cash Flow USD Mil	5,852	6,084	6,934	6,999	6,796	8,448	8,944	8,479	9,688	10,506	10,595
Cap Spending USD Mil	-1,736	-2,068	-2,430	-2,446	-2,128	-3,253	-3,339	-2,714	-2,795	-2,859	-2,774
Free Cash Flow USD Mil	4,116	4,016	4,504	4,553	4,668	5,195	5,605	5,765	6,893	7,647	7,821
Free Cash Flow Per Share USD	2.47	2.38	2.72	2.84	2.96	3.22	3.51	3.66	4.42	5.01	—
Working Capital USD Mil	1,048	2,270	2,398	2,019	3,815	1,677	-713	1,631	4,364	2,571	—

Key Ratio Analysis

Profitability ratios:

MARGINS % OF SALES	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	TTM
Revenue	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00
COGS	43.54	44.86	45.70	47.05	46.49	45.95	47.51	47.78	47.04	46.31	46.14
Gross Margin	56.46	55.14	54.30	52.95	53.51	54.05	52.49	52.22	52.96	53.69	53.86
SG&A	37.82	36.35	35.99	36.76	34.76	39.44	37.81	38.13	38.18	39.18	39.29
R&D	—	—	—	—	—	—	—	—	—	—	—
Other	0.46	0.46	0.15	0.15	0.15	0.20	0.20	0.18	0.17	0.14	0.13
Operating Margin	18.19	18.33	18.16	16.03	18.61	14.41	14.48	13.91	14.61	14.37	14.44
Net Int Inc & Other	1.41	1.57	1.17	0.20	0.08	-0.17	-1.20	-1.23	-1.23	-1.24	-1.25
EBT Margin	19.60	19.89	19.33	16.23	18.69	14.23	13.28	12.68	13.39	13.13	13.19

PROFITABILITY	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	TTM
Tax Rate %	36.10	19.27	25.86	26.76	25.99	23.01	26.85	25.17	23.66	25.11	24.94
Net Margin %	12.52	16.03	14.30	11.89	13.75	10.93	9.69	9.43	10.15	9.77	9.83
Asset Turnover (Average)	1.09	1.14	1.22	1.22	1.14	1.07	0.94	0.89	0.87	0.90	0.90
Return on Assets %	13.65	18.27	17.49	14.56	15.68	11.70	9.14	8.38	8.86	8.80	8.86
Financial Leverage (Average)	2.22	1.94	2.00	2.98	2.38	3.23	3.55	3.35	3.20	4.05	4.40
Return on Equity %	29.23	37.83	34.46	34.99	41.25	33.36	30.92	28.87	28.99	31.29	33.81
Return on Invested Capital %	23.20	30.82	29.41	25.52	27.78	19.86	15.15	13.99	14.23	14.36	14.27
Interest Coverage	—	—	—	22.34	21.35	10.12	11.32	10.24	10.76	10.63	10.51

Growth ratios:

	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	LATEST QTR
Revenue %
Year over Year	11.28	7.91	12.34	9.57	-0.04	33.79	14.98	-1.52	1.41	0.40	-3.22
3-Year Average	9.05	9.22	10.49	9.92	7.16	13.58	15.42	14.85	4.72	0.09	—
5-Year Average	9.76	5.46	9.47	9.91	8.12	12.18	13.61	10.66	8.96	9.05	—
10-Year Average	0.68	1.05	6.56	6.83	7.82	10.96	9.46	10.06	9.43	8.59	—
Operating Income %
Year over Year	12.61	8.73	11.35	-3.28	15.99	3.58	15.61	-5.41	6.51	-1.28	-0.55
3-Year Average	7.78	10.43	10.88	5.40	7.70	5.13	11.58	4.24	5.22	-0.18	—
5-Year Average	12.92	9.87	8.68	7.72	8.87	7.07	8.39	4.91	6.95	3.56	—
10-Year Average	7.08	6.70	9.28	9.22	10.81	9.96	9.13	6.78	7.34	6.18	—
Net Income %
Year over Year	-3.18	38.35	0.28	-9.12	15.64	6.29	1.95	-4.11	9.10	-3.37	—
3-Year Average	7.17	16.50	10.34	8.03	1.76	3.76	7.81	1.28	2.17	0.36	—
5-Year Average	13.31	16.21	11.30	7.58	7.14	9.16	2.69	1.77	5.56	1.84	—
10-Year Average	9.77	17.25	10.20	9.94	11.24	11.22	9.24	6.43	6.57	4.46	—
EPS %
Year over Year	-2.05	39.75	2.10	-5.87	17.45	3.71	3.07	-2.73	10.20	-1.16	2.53
3-Year Average	8.91	17.67	11.80	10.33	4.12	4.67	7.88	1.31	3.38	1.95	—
5-Year Average	10.06	17.84	13.01	9.38	9.09	10.35	3.83	2.83	6.12	2.52	—
10-Year Average	9.10	16.58	9.63	9.38	10.65	10.20	10.61	7.80	7.74	5.76	—

CASH FLOW RATIOS	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	TTM
Operating Cash Flow Growth % YOY	15.79	3.96	13.97	0.94	-2.90	24.31	5.87	-5.20	14.26	8.44	—
Free Cash Flow Growth % YOY	12.24	-2.43	12.15	1.09	2.53	11.29	7.89	2.85	19.57	10.94	—
Cap Ex as a % of Sales	5.33	5.89	6.16	5.66	4.92	5.62	5.02	4.14	4.21	4.29	4.19
Free Cash Flow/Sales %	12.64	11.43	11.41	10.53	10.80	8.98	8.43	8.80	10.38	11.47	11.80
Free Cash Flow/Net Income	1.01	0.71	0.80	0.89	0.79	0.82	0.87	0.93	1.02	1.17	1.20

Financial Health

BALANCE SHEET ITEMS (IN %)	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	LATEST QTR
Cash & Short-Term Investments	15.39	9.43	7.16	6.33	10.38	9.35	6.07	8.87	12.49	12.38	12.20
Accounts Receivable	10.28	12.45	12.67	13.01	11.60	9.28	9.48	9.43	8.98	9.43	10.00
Inventory	5.34	6.44	6.61	7.01	6.57	4.95	5.25	4.80	4.40	4.46	4.97
Other Current Assets	1.95	2.20	2.86	3.68	3.00	2.21	3.12	1.98	2.79	3.04	2.88
Total Current Assets	32.95	30.50	29.31	30.02	31.55	25.78	23.93	25.08	28.66	29.31	30.05
Net PP&E	27.36	32.37	32.42	32.40	31.80	27.96	27.03	25.64	23.97	24.46	23.95
Intangibles	17.98	21.53	20.83	19.40	22.98	41.77	45.61	44.88	42.14	41.20	40.85
Other Long-Term Assets	21.71	15.60	17.43	18.17	13.67	4.49	3.43	4.40	5.22	5.03	5.15
Total Assets	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00
Accounts Payable	18.82	7.02	7.40	22.98	20.40	16.03	5.60	5.96	6.29	7.27	17.47
Short-Term Debt	9.11	0.92	—	1.03	1.16	7.19	8.51	6.45	6.85	7.20	11.44
Taxes Payable	—	—	—	0.40	0.41	0.10	0.26	0.50	—	—	—
Accrued Liabilities	—	8.64	8.36	—	—	—	5.06	5.21	5.21	5.63	—
Other Short-Term Liabilities	1.72	6.34	6.63	—	—	—	5.47	4.77	4.68	5.56	—
Total Current Liabilities	29.65	22.92	22.39	24.41	21.97	23.32	24.91	22.90	23.02	25.66	28.91
Long-Term Debt	7.29	8.52	12.14	21.83	18.57	29.34	28.22	31.54	31.41	33.78	32.18
Other Long-Term Liabilities	17.93	16.95	15.44	20.12	17.29	16.28	18.62	15.69	14.23	15.82	16.12
Total Liabilities	54.86	48.39	49.97	66.37	57.83	68.95	71.75	70.13	68.66	75.27	77.21
Total Stockholders’ Equity	45.14	51.61	50.03	33.63	42.17	31.05	28.25	29.87	31.34	24.73	22.79
Total Liabilities & Equity	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00	100.00

LIQUIDITY/FINANCIAL HEALTH	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	LATEST QTR
Current Ratio	1.11	1.33	1.31	1.23	1.44	1.11	0.96	1.10	1.24	1.14	1.04
Quick Ratio	0.87	0.95	0.89	0.79	1.00	0.80	0.62	0.80	0.93	0.85	0.77
Financial Leverage	2.22	1.94	2.00	2.98	2.38	3.23	3.55	3.35	3.20	4.05	4.40
Debt/Equity	0.16	0.17	0.24	0.65	0.44	0.95	1.00	1.06	1.00	1.37	1.42

EFFICIENCY	2005-12	2006-12	2007-12	2008-12	2009-12	2010-12	2011-12	2012-12	2013-12	2014-12	TTM
Days Sales Outstanding	35.09	36.29	37.51	38.28	39.29	34.54	36.32	36.14	33.22	32.43	39.17
Days Inventory	41.63	41.90	42.66	43.15	46.67	41.14	41.59	43.21	40.83	38.72	43.03
Payables Period	148.95	93.47	47.19	97.16	148.91	130.82	86.68	49.77	54.47	59.10	141.98
Cash Conversion Cycle	-72.23	-15.29	32.98	-15.73	-62.95	-55.15	-8.78	29.58	19.59	12.05	-59.78
Receivables Turnover	10.40	10.06	9.73	9.54	9.29	10.57	10.05	10.10	10.99	11.25	9.32
Inventory Turnover	8.77	8.71	8.56	8.46	7.82	8.87	8.78	8.45	8.94	9.43	8.48
Fixed Assets Turnover	3.87	3.83	3.77	3.78	3.55	3.65	3.43	3.37	3.52	3.72	3.81
Asset Turnover	1.09	1.14	1.22	1.22	1.14	1.07	0.94	0.89	0.87	0.90	0.90