Stock Analysis on Net
Stock Analysis on Net

PepsiCo Inc. (NASDAQ:PEP)

Analysis of Operating Leases

Microsoft Excel

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Adjustments to Financial Statements for Operating Leases

PepsiCo Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020 Dec 28, 2019
Adjustment to Total Assets
Total assets (as reported) 100,495 92,187 92,377 92,918 78,547
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 — — — — —
Total assets (adjusted) 100,495 92,187 92,377 92,918 78,547
Adjustment to Total Debt
Total debt (as reported) 44,105 39,071 40,334 44,150 32,068
Add: Operating lease liability (before adoption of FASB Topic 842)2 — — — — —
Add: Current operating lease liabilities 556 483 446 460 442
Add: Non-current operating lease liabilities (classified in Other liabilities) 2,400 1,933 1,598 1,233 1,118
Total debt (adjusted) 47,061 41,487 42,378 45,843 33,628

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

1, 2 Equal to total present value of future operating lease payments.

PepsiCo Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

PepsiCo Inc., adjusted financial ratios

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Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020 Dec 28, 2019
Total Asset Turnover1
Reported total asset turnover 0.91 0.94 0.86 0.76 0.86
Adjusted total asset turnover 0.91 0.94 0.86 0.76 0.86
Debt to Equity2
Reported debt to equity 2.38 2.28 2.51 3.28 2.17
Adjusted debt to equity 2.54 2.42 2.64 3.41 2.27
Return on Assets3 (ROA)
Reported ROA 9.03% 9.67% 8.25% 7.66% 9.31%
Adjusted ROA 9.03% 9.67% 8.25% 7.66% 9.31%

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

1 See details »

2 See details »

3 See details »

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. PepsiCo Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. PepsiCo Inc. adjusted debt to equity ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. PepsiCo Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

PepsiCo Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020 Dec 28, 2019
As Reported
Selected Financial Data (US$ in millions)
Net revenue 91,471 86,392 79,474 70,372 67,161
Total assets 100,495 92,187 92,377 92,918 78,547
Activity Ratio
Total asset turnover1 0.91 0.94 0.86 0.76 0.86
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net revenue 91,471 86,392 79,474 70,372 67,161
Adjusted total assets 100,495 92,187 92,377 92,918 78,547
Activity Ratio
Adjusted total asset turnover2 0.91 0.94 0.86 0.76 0.86

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

2023 Calculations

1 Total asset turnover = Net revenue ÷ Total assets
= 91,471 ÷ 100,495 = 0.91

2 Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 91,471 ÷ 100,495 = 0.91

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. PepsiCo Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Adjusted Debt to Equity

Microsoft Excel
Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020 Dec 28, 2019
As Reported
Selected Financial Data (US$ in millions)
Total debt 44,105 39,071 40,334 44,150 32,068
Total PepsiCo common shareholders’ equity 18,503 17,149 16,043 13,454 14,786
Solvency Ratio
Debt to equity1 2.38 2.28 2.51 3.28 2.17
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 47,061 41,487 42,378 45,843 33,628
Total PepsiCo common shareholders’ equity 18,503 17,149 16,043 13,454 14,786
Solvency Ratio
Adjusted debt to equity2 2.54 2.42 2.64 3.41 2.27

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

2023 Calculations

1 Debt to equity = Total debt ÷ Total PepsiCo common shareholders’ equity
= 44,105 ÷ 18,503 = 2.38

2 Adjusted debt to equity = Adjusted total debt ÷ Total PepsiCo common shareholders’ equity
= 47,061 ÷ 18,503 = 2.54

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. PepsiCo Inc. adjusted debt-to-equity ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020 Dec 28, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to PepsiCo 9,074 8,910 7,618 7,120 7,314
Total assets 100,495 92,187 92,377 92,918 78,547
Profitability Ratio
ROA1 9.03% 9.67% 8.25% 7.66% 9.31%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to PepsiCo 9,074 8,910 7,618 7,120 7,314
Adjusted total assets 100,495 92,187 92,377 92,918 78,547
Profitability Ratio
Adjusted ROA2 9.03% 9.67% 8.25% 7.66% 9.31%

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

2023 Calculations

1 ROA = 100 × Net income attributable to PepsiCo ÷ Total assets
= 100 × 9,074 ÷ 100,495 = 9.03%

2 Adjusted ROA = 100 × Net income attributable to PepsiCo ÷ Adjusted total assets
= 100 × 9,074 ÷ 100,495 = 9.03%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. PepsiCo Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.