PepsiCo Inc. (NASDAQ:PEP)

Amortizable Intangible Assets

The gross value of amortizable intangible assets demonstrates a consistent decline from US$3,440 million in 2020 to US$2,857 million in 2024. Concurrently, accumulated amortization exhibits a rising trend, increasing from -US$1,737 million to -US$1,755 million over the same period, indicating progressive amortization expenses. Consequently, the net amortizable intangible assets show a marked decrease from US$1,703 million to US$1,102 million, highlighting significant asset consumption or write-downs.

Goodwill

Goodwill decreased steadily from US$18,757 million in 2020 to US$17,534 million in 2024, suggesting impairment or divestiture activities impacting this asset category over the five-year span.

Acquired Franchise Rights (First Entry)

Values remained relatively stable from 2020 to 2021 at US$976 million, but subsequently declined gradually to US$821 million by 2024, indicating some reduction in the value or acquisition of franchise rights.

Customer Relationships

A downward trend is observed in customer relationships, falling from US$642 million in 2020 to a low of US$560 million in 2023 before a slight increase to US$565 million in 2024, reflecting possible attrition or changing valuation methodologies.

Brands (First Entry)

The brand assets initially decreased from US$1,348 million in 2020 to US$1,051 million in 2024, demonstrating a persistent decline over the period, possibly linked to amortization or market revaluation effects.

Other Identifiable Intangibles

This category shows a gradual decrease from US$474 million to US$420 million across the period, indicating a slow but consistent diminishment of these assets.

Reacquired Franchise Rights

Relatively stable values characterize reacquired franchise rights, fluctuating slightly from US$7,603 million in 2020 to US$7,437 million in 2024, with minor variations evidencing steady asset management.

Acquired Franchise Rights (Second Entry)

This set shows an increase from US$1,708 million in 2020 to a peak at US$1,906 million in 2022, followed by a mild decline to US$1,858 million in 2024, suggesting acquisitions or revaluations influencing this intangible asset.

Brands (Second Entry)

A significant decrease is noted from US$8,301 million in 2020 to US$4,404 million in 2024. The sharpest drop occurs between 2021 and 2022, indicating potential impairment, sale, or reclassification of brand assets.

Other Indefinite-Lived Intangible Assets

These assets decrease systematically from US$17,612 million to US$13,699 million, highlighting a continuous reduction in indefinite-lived assets possibly due to impairments or disposals.

Indefinite-Lived Intangible Assets

The total of indefinite-lived intangible assets similarly declines from US$36,369 million in 2020 to US$31,233 million in 2024, mirroring the trends observed in its components.

Total Intangible Assets

The overall intangible assets diminish progressively over the five years, moving from US$38,072 million down to US$32,335 million. This trend reflects the aggregate declines across both amortizable and indefinite-lived intangibles, indicating a net reduction in intangible asset values held.

Over the five-year period, the reported total assets exhibit a generally stable pattern with a slight increase followed by a decrease. From 2020 to 2021, reported assets decreased marginally from 92,918 million US dollars to 92,377 million, then remained nearly flat into 2022 at 92,187 million. A notable increase occurred in 2023, reaching 100,495 million, before a slight decline to 99,467 million in 2024.

The adjusted total assets, which exclude goodwill adjustments, follow a similar but somewhat more subdued trend. From 74,161 million in 2020, adjusted assets slightly decreased to 73,996 million in 2021 and remained fairly constant in 2022 at 73,985 million. A more significant increase to 82,767 million in 2023 is observed, followed by a slight decrease to 81,933 million in 2024. The gap between reported and adjusted assets suggests a substantial presence of goodwill and intangible assets in the reported figures.

Reported common shareholders’ equity shows a consistent upward trend, growing from 13,454 million in 2020 to 18,503 million in 2023, with a minor decrease to 18,041 million in 2024. This steady increase reflects a strengthening equity base over most of the period.

Conversely, the adjusted shareholders’ equity, which removes goodwill impacts, reveals a very different trajectory. Starting from a significantly negative position at -5,303 million in 2020, it improves considerably year-over-year to -2,338 million in 2021 and -1,053 million in 2022. A positive adjusted equity of 775 million is recorded in 2023, followed by a slight decline to 507 million in 2024. This indicates that, underlying the goodwill, the company's equity position is improving markedly but remains modest in absolute terms compared to the reported figures.

Reported net income attributable to the company increases steadily from 7,120 million in 2020 to 9,578 million in 2024, showing continuous profitability growth. The adjusted net income mirrors this trend closely but shows a slightly higher figure in 2023 (9,364 million adjusted vs. 9,074 million reported), possibly reflecting adjustments that enhance net income in that year.

In summary, the data reveals stable asset levels with a notable uplift in 2023, supported by a growing reported equity base. The adjusted figures highlight the impact of goodwill on the balance sheet, showing weaker but improving equity when goodwill is excluded. Net income progresses positively throughout, with adjusted and reported results largely aligned, suggesting consistent profitability growth regardless of goodwill considerations.

Net Profit Margin

The reported net profit margin demonstrates modest fluctuations over the five-year period, starting at 10.12% in 2020, experiencing a slight dip to 9.59% in 2021, then rising to 10.31% in 2022. It decreased marginally to 9.92% in 2023 before increasing again to 10.43% in 2024. The adjusted net profit margin follows a similar trend, except for 2023, where it is slightly higher at 10.24%, indicating some adjustments that improved profitability measures in that year. Overall, net profitability has remained relatively stable around the 10% mark.

Total Asset Turnover

The reported total asset turnover ratio exhibits a generally increasing trend from 0.76 in 2020 to 0.92 in 2024, peaking at 0.94 in 2022 before slightly declining to 0.91 in 2023 and then rising again. Adjusted total asset turnover ratios are consistently higher than the reported figures, indicating significant differences when goodwill adjustments are applied. The adjusted ratios increased steadily from 0.95 in 2020 to 1.12 in 2024, with a slight dip in 2023 compared to 2022 but maintaining a strong upward trajectory overall. This suggests improved efficiency in using assets to generate sales after adjustments for goodwill.

Financial Leverage

Reported financial leverage ratios have decreased notably from 6.91 in 2020 to 5.51 in 2024, indicating a reduction in reliance on debt or liabilities relative to equity. However, the adjusted financial leverage values available only for 2023 and 2024 show exceptionally high ratios of 106.8 and 161.6 respectively, which appear to be outliers or results of a different calculation method involving goodwill adjustments. These numbers suggest significant changes or reclassification when goodwill is considered, but lack of data for previous years limits trend analysis.

Return on Equity (ROE)

The reported ROE has experienced a downward trend from a high of 52.92% in 2020 to 47.48% in 2021, followed by a partial recovery, reaching 53.09% in 2024. This indicates strong but somewhat fluctuating profitability relative to equity, consistent with changes seen in net profit margins and leverage. In contrast, the adjusted ROE values for 2023 and 2024 are extraordinarily elevated at 1208.26% and 1889.15%, respectively, reflecting the significant impact of goodwill adjustments. These extreme figures warrant careful interpretation but likely point to diminished equity bases after adjustment or the influence of non-operating items included in adjustments.

Return on Assets (ROA)

Reported ROA values reveal a positive trend, increasing from 7.66% in 2020 to 9.63% in 2024, with some fluctuations in between. Adjusted ROA consistently exceeds reported values, starting at 9.6% in 2020 and peaking at 12.04% in 2022 before slightly decreasing yet maintaining a strong level above 11% in subsequent years. This suggests that adjustments for goodwill enhance the apparent efficiency in generating returns from total assets, implying that tangible or operational asset performance is higher once intangible assets are accounted for differently.

The financial data over the five-year period reveals several noteworthy trends in the net income and profitability margins.

Net Income Trends

The reported net income attributable to the company shows a consistent upward trajectory from 7,120 million USD in 2020 to 9,578 million USD in 2024. This represents an overall increase of approximately 34.5% over the period. The adjusted net income closely follows the reported figures, diverging only in 2023 where it reaches 9,364 million USD compared to the reported 9,074 million USD, before equalizing again in 2024.

Profit Margin Trends

The reported net profit margin exhibits some variability but remains relatively stable around 10%. It decreased slightly from 10.12% in 2020 to a low of 9.59% in 2021, then increased to 10.31% in 2022, followed by a small decline to 9.92% in 2023, and ultimately rose to 10.43% in 2024. The adjusted net profit margin follows a similar pattern but shows a sharper recovery in 2023, increasing to 10.24% from 9.59% in 2021 and reaching parity with the reported figure by 2024.

Insights on Adjusted vs. Reported Figures

The adjusted net income and profit margins are nearly identical to the reported figures, indicating minimal impact of goodwill adjustments and other potential one-time accounting adjustments on overall profitability measures. The slight difference observed in 2023 may suggest specific adjustments that year, but the convergence by 2024 demonstrates normalization in financial reporting.

Overall Financial Health

The steady increase in net income combined with generally stable profit margins indicates sustained profitability and effective cost management across the years. The data suggests continued operational efficiency and positive earnings growth trajectory.

Total Assets

The reported total assets of the company remained relatively stable from 2020 to 2022, showing a slight decline from 92,918 million US dollars in 2020 to 92,187 million US dollars in 2022. In 2023, there was a noticeable increase to 100,495 million US dollars, followed by a minor decrease to 99,467 million US dollars in 2024. Adjusted total assets, which exclude goodwill, followed a similar pattern but on a lower magnitude. They decreased slightly from 74,161 million US dollars in 2020 to 73,985 million US dollars in 2022, then rose significantly to 82,767 million US dollars in 2023, with a slight decline to 81,933 million US dollars in 2024.

Total Asset Turnover

Both reported and adjusted total asset turnover exhibited an upward trend over the five-year period, indicating improved efficiency in using assets to generate revenue. The reported total asset turnover increased steadily from 0.76 in 2020 to 0.94 in 2022, followed by a slight dip to 0.91 in 2023 and a moderate recovery to 0.92 in 2024. The adjusted total asset turnover, excluding goodwill effects, was consistently higher than the reported ratio, rising from 0.95 in 2020 to 1.17 in 2022. It then decreased to 1.11 in 2023 before increasing marginally to 1.12 in 2024.

Insights

The data suggests that the company improved its asset utilization efficiency over the period, as evidenced by the increasing asset turnover ratios. The temporary dip in both reported and adjusted asset turnovers in 2023 could indicate a period of increased asset investment or other operational changes that momentarily reduced efficiency. However, the recovery in 2024 indicates a return toward higher operational efficiency. The divergence between reported and adjusted figures highlights the impact of goodwill on asset base figures and turnover metrics, with adjusted measures suggesting better core asset efficiency. The overall stability and slight growth in adjusted total assets in recent years point to prudent asset management excluding intangible asset fluctuations.

The analysis of the financial data reveals several important trends in the reported and goodwill adjusted figures over the five-year period.

Total Assets

Reported total assets demonstrate a relatively stable trend from 2020 to 2022, showing a slight decline from US$92,918 million in 2020 to US$92,187 million in 2022. However, there is a significant increase in 2023 to US$100,495 million, followed by a small decrease in 2024 to US$99,467 million.

Adjusted total assets, which exclude goodwill, remain fairly consistent between 2020 and 2022, fluctuating narrowly around US$74,000 million. A notable rise occurs in 2023, reaching US$82,767 million, then slightly declines to US$81,933 million in 2024. This pattern mirrors the reported total assets trend but on a smaller scale.

Total Shareholders’ Equity

Reported total common shareholders’ equity shows a clear upward trend across the period, increasing steadily from US$13,454 million in 2020 to US$18,503 million in 2023. A minimal decrease is observed in 2024, where equity declines to US$18,041 million.

In contrast, adjusted total shareholders’ equity, reflecting the exclusion of goodwill, remains negative from 2020 to 2022, but the negative figure steadily improves from -US$5,303 million in 2020 to -US$1,053 million in 2022. Notably, equity turns positive in 2023 at US$775 million, followed by a slight reduction to US$507 million in 2024. This transition from negative to positive adjusted equity suggests significant adjustments impacting goodwill during this period.

Financial Leverage

Reported financial leverage decreases consistently from 6.91 in 2020 to 5.38 in 2022, indicating a gradual reduction in leverage during these years. However, a slight increase occurs afterward, with ratios of 5.43 in 2023 and 5.51 in 2024.

Adjusted financial leverage figures are only available for 2023 and 2024 and suggest extremely high leverage ratios at 106.8 and 161.6 respectively. These unusually elevated figures contrast sharply with the reported leverage ratios and reflect the considerable impact of goodwill adjustments on the financial structure, highlighting material differences in leverage measurement once goodwill is excluded.

Overall, the firm exhibits stable asset levels with a moderate increase in equity and a general trend of decreasing reported leverage through 2022, followed by slight reversals. Goodwill adjustments markedly affect equity and leverage metrics, shifting adjusted equity from negative to positive and resulting in very high leverage ratios, thereby underscoring the significant influence of intangible assets on financial assessments.

The financial data for PepsiCo Inc. over the five-year period ending December 28, 2024, reveals several notable trends in profitability and equity structure, particularly when distinguishing between reported figures and goodwill-adjusted metrics.

Net Income

Both reported and adjusted net income demonstrate a consistent growth trajectory. Reported net income increased steadily from $7,120 million in 2020 to $9,578 million in 2024, indicating strengthening profitability. Adjusted net income aligns closely with the reported figures, except in 2023 where it shows a slightly higher value ($9,364 million vs. $9,074 million), suggesting that adjustments primarily impact that year.

Shareholders’ Equity

Reported common shareholders’ equity shows an overall upward trend from $13,454 million in 2020, peaking at $18,503 million in 2023, before slightly declining to $18,041 million in 2024. Conversely, adjusted common shareholders’ equity, which accounts for goodwill and other adjustments, starts with significant negative values (-$5,303 million in 2020) and approaches positive territory by 2023 ($775 million). However, it decreases again slightly to $507 million in 2024. This major discrepancy indicates substantial goodwill or intangible asset adjustments impacting the equity base, which reduces the equity when adjusted.

Return on Equity (ROE)

The reported ROE remains relatively stable, fluctuating between approximately 47% and 53% during the period. It exhibits a slight dip in 2021 and 2023 followed by recovery in 2024 to 53.09%, reflecting consistent profitability relative to equity. In stark contrast, the adjusted ROE data is only available for 2023 and 2024, where it shows extraordinarily high values of 1,208.26% and 1,889.15% respectively. These extreme adjusted ROE figures stem from the combination of the sustained net income levels against the markedly reduced adjusted equity base, highlighting the impact of goodwill write-downs or adjustments that reduce equity considerably while net income remains stable.

Overall, the analysis indicates that while PepsiCo's reported profitability and equity have grown steadily, the adjustments related to goodwill materially affect the equity base and consequently inflate the adjusted ROE metrics in recent years. This suggests the importance of considering both reported and adjusted data to understand the true economic return on equity and the influence of intangible assets on the financial structure.

The analysis of the financial data over the five-year period reveals several notable trends in profitability, asset base, and return on assets (ROA) for the company.

Net Income

Reported net income showed a consistent upward trajectory, increasing from $7,120 million in 2020 to $9,578 million in 2024. The adjusted net income, which presumably accounts for goodwill or other adjustments, closely follows this trend, with a slight variation in 2023 where adjusted net income ($9,364 million) exceeds the reported figure ($9,074 million). This suggests improved profitability when adjusting for certain non-recurring or intangible elements.

Total Assets

Reported total assets remained relatively stable from 2020 to 2022, hovering around $92 billion. In 2023, there was a marked increase to approximately $100.5 billion, followed by a slight decline to nearly $99.5 billion in 2024. In contrast, adjusted total assets, which exclude or modify goodwill, show a lower base level of around $74 billion from 2020 through 2022, rising to about $82.8 billion in 2023 and then decreasing to approximately $81.9 billion in 2024. The divergence between reported and adjusted assets highlights the significant impact of goodwill or intangible asset adjustments on the balance sheet.

Return on Assets (ROA)

Reported ROA improved from 7.66% in 2020 to 9.63% in 2024, with a peak in 2022 at 9.67% followed by a slight dip in 2023 before recovering. Adjusted ROA presents a higher efficiency measure, beginning at 9.6% in 2020 and rising steadily to 11.69% in 2024, peaking in 2022 at 12.04% and slightly declining thereafter. The consistently higher adjusted ROA indicates that when goodwill is excluded, the company generates greater returns on its tangible asset base.

Overall, the company exhibits strong and improving profitability over the observed period, with net income growth supported by relatively steady asset levels. The adjusted metrics suggest enhanced performance when intangible assets are accounted for separately, underscoring effective asset utilization and operational efficiency. The significant increase in reported assets in 2023, not fully mirrored in the adjusted figures, suggests a substantial goodwill recognition or acquisition activity during that year, which has a notable impact on reported metrics.