Financial statement analysis and common stock valuation

Capital Asset Pricing Model (CAPM)

CAPM is a theory concentrated with deriving the expected rates of return on risky assets based on the assets’ systematic risk levels. Systematic risk is the variability of returns that is due to macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.

• Rates of Return
• Variance and Covariance
• Systematic Risk (β) Estimation
• Expected Rate of Return

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Cash Flow Statement

The cash flow statement provides information about PepsiCo Inc. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on PepsiCo Inc. balance sheet.

Analysis of Geographic Areas

PepsiCo Inc. operates in 2 regions: United States and International.

• Area Asset Turnover
• Net revenue
• Property, plant and equipment, net

Analysis of Solvency Ratios
Quarterly Data

Examines PepsiCo Inc. capital structure in terms of the mix of its financing sources and the ability of the firm to satisfy its longer-term debt and investment obligations.

• Solvency Ratios (Summary)
• Debt to Equity
• Debt to Capital
• Debt to Assets
• Financial Leverage

Balance Sheet: Assets
Quarterly Data

The assets reports major classes and amounts of resources owned or controlled by PepsiCo Inc..

Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

An approach to decomposing PepsiCo Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.

Analysis of Revenues

• Revenues as Reported

Analysis of Reportable Segments

PepsiCo Inc. operates in 6 segments: PepsiCo Foods North America (PFNA); PepsiCo Beverages North America (PBNA); International Beverages Franchise (IB Franchise); Europe, Middle East and Africa (EMEA); Latin America Foods (LatAm Foods); and Asia Pacific Foods.

• Segment Profit Margin
• Segment Capital Expenditures to Depreciation
• Net revenue
• Segment operating profit
• Capital spending
• Depreciation and amortization

Enterprise Value (EV)

Enterprise value is total company value (the market value of common equity, debt, and preferred equity) minus the value of cash and short-term investments.

• Current EV
• Historical EV