Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2008
- Price to Book Value (P/BV) since 2008
- Analysis of Debt
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Solvency Ratios (Summary)
Keurig Dr Pepper Inc., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Debt to equity
- The debt to equity ratio demonstrates a consistent downward trend over the examined period, decreasing from 0.71 in 2018 to 0.5 in 2021. This indicates a gradual decrease in reliance on debt financing relative to equity.
- Debt to equity (including operating lease liability)
- Including operating lease liabilities, the ratio similarly declines from 0.71 in 2018 to 0.53 in 2021, reflecting a comparable improvement in the company's capital structure when accounting for lease obligations.
- Debt to capital
- This ratio shows a steady decrease, moving from 0.42 in 2018 down to 0.34 in 2021. The decline highlights a reduction in debt proportion relative to total capital, suggesting enhanced financial stability.
- Debt to capital (including operating lease liability)
- When including operating lease liabilities, the debt to capital ratio follows a similar downward path, decreasing from 0.42 in 2018 to 0.35 in 2021, reinforcing the pattern of lowered leverage.
- Debt to assets
- The debt to assets ratio also consistently decreases from 0.33 in 2018 to 0.25 in 2021, indicating a reduced proportion of debt in relation to total assets over time.
- Debt to assets (including operating lease liability)
- Including operating lease liabilities, this ratio declines slightly less steeply from 0.33 in 2018 to 0.26 in 2021, continuing the trend of diminishing leverage when asset base considerations encompass lease commitments.
- Financial leverage
- Financial leverage ratios show a marginal but steady decrease from 2.17 in 2018 to 2.03 in 2021, implying a slow reduction in the use of debt to finance assets.
- Interest coverage
- The interest coverage ratio exhibits a significant improvement, climbing from 2.75 in 2018 to 6.6 in 2021. This indicates a substantial enhancement in the company's ability to meet interest expenses from operating earnings.
- Fixed charge coverage
- Fixed charge coverage also increases notably from 2.58 in 2018 to 5.51 in 2021, reflecting a stronger capacity to cover fixed financial obligations, including interest and lease-related charges.
Debt Ratios
Coverage Ratios
Debt to Equity
Keurig Dr Pepper Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Short-term borrowings and current portion of long-term obligations | |||||
| Current finance lease liability | |||||
| Long-term obligations, excluding current portion | |||||
| Non-current finance lease liability | |||||
| Total debt | |||||
| Stockholders’ equity | |||||
| Solvency Ratio | |||||
| Debt to equity1 | |||||
| Benchmarks | |||||
| Debt to Equity, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Debt to Equity, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Debt to Equity, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total debt
- There is a clear downward trend in total debt over the four-year period. The total debt decreased consistently from US$15,990 million at the end of 2018 to US$12,582 million by the end of 2021. This represents a reduction of approximately 21.3% in total debt, indicating a strategy focused on debt reduction or improved debt management.
- Stockholders’ equity
- Stockholders' equity shows a steady increase over the same period. It rose from US$22,533 million in 2018 to US$24,972 million in 2021. This upward trend suggests accumulated retained earnings or additional capital injections, contributing to a strengthening of the company's equity base by about 10.8% over four years.
- Debt to equity ratio
- The debt to equity ratio consistently declined year over year, moving from 0.71 in 2018 to 0.50 in 2021. This indicates a reduction in financial leverage, signaling a lower reliance on debt financing relative to equity. The ratio’s decline aligns with the simultaneous decrease in total debt and increase in stockholders’ equity, reflecting an overall improvement in the company’s capital structure and financial stability.
Debt to Equity (including Operating Lease Liability)
Keurig Dr Pepper Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Short-term borrowings and current portion of long-term obligations | |||||
| Current finance lease liability | |||||
| Long-term obligations, excluding current portion | |||||
| Non-current finance lease liability | |||||
| Total debt | |||||
| Current operating lease liability | |||||
| Non-current operating lease liability | |||||
| Total debt (including operating lease liability) | |||||
| Stockholders’ equity | |||||
| Solvency Ratio | |||||
| Debt to equity (including operating lease liability)1 | |||||
| Benchmarks | |||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Debt to Equity (including Operating Lease Liability), Sector | |||||
| Food, Beverage & Tobacco | |||||
| Debt to Equity (including Operating Lease Liability), Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt has demonstrated a consistent downward trend over the four-year period. It decreased from $15,990 million in 2018 to $13,266 million in 2021, indicating a reduction in the company's leverage and financial obligations.
- Stockholders’ equity
- Stockholders’ equity has steadily increased, rising from $22,533 million in 2018 to $24,972 million in 2021. This growth suggests an accumulation of retained earnings or additional equity financing, contributing to a stronger equity base.
- Debt to equity (including operating lease liability)
- The debt to equity ratio has progressively declined from 0.71 in 2018 to 0.53 in 2021. This decline reflects a favorable shift towards lower financial leverage, meaning the company is relying less on debt relative to equity to finance its assets.
Debt to Capital
Keurig Dr Pepper Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Short-term borrowings and current portion of long-term obligations | |||||
| Current finance lease liability | |||||
| Long-term obligations, excluding current portion | |||||
| Non-current finance lease liability | |||||
| Total debt | |||||
| Stockholders’ equity | |||||
| Total capital | |||||
| Solvency Ratio | |||||
| Debt to capital1 | |||||
| Benchmarks | |||||
| Debt to Capital, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Debt to Capital, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Debt to Capital, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt of the company exhibited a consistent downward trend over the four-year period. Starting from US$15,990 million at the end of 2018, it steadily decreased each year to reach US$12,582 million by the end of 2021. This indicates a reduction in the company's leverage and potential improvement in its financial stability.
- Total Capital
- Total capital showed a slight but consistent decline from US$38,523 million at the end of 2018 to US$37,554 million at the end of 2021. While the decrease is relatively minor, it suggests a modest contraction or reallocation of the company's overall capital resources during this period.
- Debt to Capital Ratio
- The debt to capital ratio decreased steadily from 0.42 in 2018 to 0.34 in 2021. This downward movement reflects the company's lowering reliance on debt financing relative to its total capital. The consistent improvement in this ratio aligns with the observed reductions in total debt and indicates enhanced financial leverage management.
Debt to Capital (including Operating Lease Liability)
Keurig Dr Pepper Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Short-term borrowings and current portion of long-term obligations | |||||
| Current finance lease liability | |||||
| Long-term obligations, excluding current portion | |||||
| Non-current finance lease liability | |||||
| Total debt | |||||
| Current operating lease liability | |||||
| Non-current operating lease liability | |||||
| Total debt (including operating lease liability) | |||||
| Stockholders’ equity | |||||
| Total capital (including operating lease liability) | |||||
| Solvency Ratio | |||||
| Debt to capital (including operating lease liability)1 | |||||
| Benchmarks | |||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Debt to Capital (including Operating Lease Liability), Sector | |||||
| Food, Beverage & Tobacco | |||||
| Debt to Capital (including Operating Lease Liability), Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt has shown a consistent downward trend over the analyzed four-year period. Beginning at 15,990 million US dollars in 2018, it decreased steadily each year to 13,266 million US dollars in 2021. This reflects a reduction in the company's leverage over time.
- Total Capital (including operating lease liability)
- Total capital has remained relatively stable throughout the period from 2018 to 2021. The figures hovered around 38,000 million US dollars, with minimal variation, suggesting consistent capital structure without significant new capital injections or reductions.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio exhibits a gradual decline from 0.42 in 2018 to 0.35 in 2021. This decreasing ratio indicates reduction in financial leverage, enhancing the company's solvency position and potentially reducing financial risk during the period analyzed.
Debt to Assets
Keurig Dr Pepper Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Short-term borrowings and current portion of long-term obligations | |||||
| Current finance lease liability | |||||
| Long-term obligations, excluding current portion | |||||
| Non-current finance lease liability | |||||
| Total debt | |||||
| Total assets | |||||
| Solvency Ratio | |||||
| Debt to assets1 | |||||
| Benchmarks | |||||
| Debt to Assets, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Debt to Assets, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Debt to Assets, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
-
The total debt demonstrates a consistent downward trend over the four-year period. Starting at 15,990 million US dollars in 2018, it decreases each year, reaching 12,582 million US dollars by the end of 2021. This reflects an overall reduction in debt levels by approximately 21.3% from 2018 to 2021.
- Total Assets
-
Total assets show a modest but steady increase throughout the analyzed period, growing from 48,918 million US dollars at the end of 2018 to 50,598 million US dollars in 2021. This indicates a growth in asset base of about 3.4%, suggesting a stable expansion of the company's asset holdings.
- Debt to Assets Ratio
-
The debt to assets ratio decreases consistently from 0.33 in 2018 to 0.25 in 2021. This declining ratio illustrates an improvement in the capital structure, driven by the reduction in total debt relative to total assets. The lower ratio suggests a reduction in financial leverage and potentially a lower risk profile.
- Summary Insights
-
Overall, the financial data reveals a clear focus on deleveraging, with total debt decreasing significantly while total assets experience moderate growth. The decreasing debt to assets ratio confirms a strengthening balance sheet and a potentially improved capacity to meet financial obligations. These trends imply the company is managing its financial position conservatively, prioritizing debt reduction alongside asset growth.
Debt to Assets (including Operating Lease Liability)
Keurig Dr Pepper Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Short-term borrowings and current portion of long-term obligations | |||||
| Current finance lease liability | |||||
| Long-term obligations, excluding current portion | |||||
| Non-current finance lease liability | |||||
| Total debt | |||||
| Current operating lease liability | |||||
| Non-current operating lease liability | |||||
| Total debt (including operating lease liability) | |||||
| Total assets | |||||
| Solvency Ratio | |||||
| Debt to assets (including operating lease liability)1 | |||||
| Benchmarks | |||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Debt to Assets (including Operating Lease Liability), Sector | |||||
| Food, Beverage & Tobacco | |||||
| Debt to Assets (including Operating Lease Liability), Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt shows a consistent decreasing trend over the four years analyzed. Starting at $15,990 million in 2018, it declined steadily each year to $13,266 million by the end of 2021. This reduction reflects a significant deleveraging effort by the entity.
- Total assets
- Total assets increased gradually over the same period. The asset base rose from $48,918 million in 2018 to $50,598 million in 2021, indicating moderate growth in the company’s asset holdings.
- Debt to assets (including operating lease liability)
- The debt to assets ratio steadily decreased from 0.33 in 2018 to 0.26 in 2021. This decline aligns with the reduction in total debt alongside the modest increase in total assets, suggesting an improvement in capital structure and reduced financial leverage.
Financial Leverage
Keurig Dr Pepper Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Total assets | |||||
| Stockholders’ equity | |||||
| Solvency Ratio | |||||
| Financial leverage1 | |||||
| Benchmarks | |||||
| Financial Leverage, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Financial Leverage, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Financial Leverage, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets demonstrate a gradual increasing trend over the four-year period from the end of 2018 through the end of 2021. The value increased from 48,918 million US dollars in 2018 to 50,598 million US dollars by the end of 2021. This represents a steady growth in the asset base, indicating a consistent expansion or accumulation of resources held by the company.
- Stockholders’ Equity
- Stockholders’ equity similarly shows a positive trend over the observed period. The equity grew from 22,533 million US dollars in 2018 to 24,972 million US dollars in 2021. This steady increase reflects a strengthening of the shareholders’ claim on the company’s assets, possibly indicating retained earnings accumulation, or other equity enhancements.
- Financial Leverage
- Financial leverage, expressed as a ratio, exhibits a declining trend, moving from 2.17 in 2018 to 2.03 in 2021. This decreasing leverage ratio suggests a relative reduction in the proportion of liabilities to equity, implying improved financial stability or a strategic reduction in the use of debt financing over equity.
Interest Coverage
Keurig Dr Pepper Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net income attributable to KDP | |||||
| Add: Net income attributable to noncontrolling interest | |||||
| Add: Income tax expense | |||||
| Add: Interest expense | |||||
| Earnings before interest and tax (EBIT) | |||||
| Solvency Ratio | |||||
| Interest coverage1 | |||||
| Benchmarks | |||||
| Interest Coverage, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Interest Coverage, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Interest Coverage, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- The EBIT showed a significant upward trend over the four-year period. Starting at $1,243 million in 2018, it nearly doubled by 2019 to $2,348 million. The figure remained relatively stable in 2020 at $2,357 million and then increased substantially to $3,298 million in 2021. This indicates strong operational performance improvement, particularly in the most recent year measured.
- Interest Expense
- Interest expense rose sharply from $452 million in 2018 to a peak of $654 million in 2019. It then decreased moderately to $604 million in 2020 and further declined to $500 million in 2021. This pattern suggests some fluctuation in debt levels or interest rates, with a general reduction in the burden towards the end of the period.
- Interest Coverage Ratio
- The interest coverage ratio, which measures the ability to meet interest obligations from EBIT, showed steady improvement throughout the period. It increased from 2.75 in 2018 to 3.59 in 2019, then to 3.9 in 2020, and reached 6.6 in 2021. The rising ratio reflects enhanced earnings capacity relative to interest expense, indicating a stronger financial position and reduced risk related to debt servicing.
Fixed Charge Coverage
Keurig Dr Pepper Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net income attributable to KDP | |||||
| Add: Net income attributable to noncontrolling interest | |||||
| Add: Income tax expense | |||||
| Add: Interest expense | |||||
| Earnings before interest and tax (EBIT) | |||||
| Add: Operating lease cost | |||||
| Earnings before fixed charges and tax | |||||
| Interest expense | |||||
| Operating lease cost | |||||
| Fixed charges | |||||
| Solvency Ratio | |||||
| Fixed charge coverage1 | |||||
| Benchmarks | |||||
| Fixed Charge Coverage, Competitors2 | |||||
| Coca-Cola Co. | |||||
| Mondelēz International Inc. | |||||
| PepsiCo Inc. | |||||
| Philip Morris International Inc. | |||||
| Fixed Charge Coverage, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Fixed Charge Coverage, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
- Earnings before Fixed Charges and Tax
- The earnings before fixed charges and tax exhibited a strong upward trend over the four-year span. Starting at 1,291 million US dollars in 2018, the figure nearly doubled by 2019 to 2,430 million US dollars. This growth continued moderately in 2020 with a slight increase to 2,470 million US dollars, followed by a more pronounced increase in 2021 to 3,419 million US dollars. Overall, this indicates a significant improvement in the company's operating profitability before accounting for fixed costs and taxes.
- Fixed Charges
- The fixed charges showed some fluctuation throughout the period. Beginning at 500 million US dollars in 2018, fixed charges increased substantially in 2019 to 736 million US dollars. The amount then decreased marginally in 2020 to 717 million US dollars and further declined to 621 million US dollars in 2021. Despite the initial rise in 2019, the downward trend in the subsequent years suggests improved management or refinancing of fixed costs.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio demonstrated a notable improvement, indicating enhanced ability to cover fixed charges through earnings. The ratio rose from 2.58 in 2018 to 3.3 in 2019, followed by a slight increase to 3.44 in 2020. A significant jump occurred in 2021, where the ratio reached 5.51. This progression suggests increasing financial strength and reduced risk regarding coverage of fixed financial obligations over time.