Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
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- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Return on Invested Capital (ROIC)
PepsiCo Inc., ROIC calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The period under review demonstrates fluctuations in Return on Invested Capital (ROIC), alongside corresponding changes in Net Operating Profit After Taxes (NOPAT) and Invested Capital. Overall, ROIC exhibited a degree of volatility, initially declining before recovering and then decreasing again.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT experienced a slight decrease from US$9,629 million in 2021 to US$9,364 million in 2022. This was followed by an increase to US$10,029 million in 2023 and a further rise to US$10,978 million in 2024, representing the highest value within the observed timeframe. A subsequent decrease to US$9,762 million was noted in 2025.
- Invested Capital
- Invested Capital showed a modest decrease from US$69,829 million in 2021 to US$69,452 million in 2022. From 2022 onward, Invested Capital consistently increased, reaching US$75,038 million in 2023, US$76,674 million in 2024, and US$83,234 million in 2025. This represents a substantial cumulative increase over the latter part of the period.
- Return on Invested Capital (ROIC)
- ROIC began at 13.79% in 2021, declining to 13.48% in 2022. A further decrease to 13.36% occurred in 2023. The year 2024 saw a notable increase in ROIC to 14.32%, the highest value observed. However, 2025 witnessed a significant decrease to 11.73%, despite the continued growth in NOPAT, indicating that the increase in Invested Capital outpaced the growth in operating profit.
The interplay between NOPAT and Invested Capital suggests that while profitability generally improved through 2024, the substantial investment in capital during that period, and continuing into 2025, impacted the efficiency with which capital was deployed, as evidenced by the decline in ROIC in the final year of the observation period. The decrease in ROIC in 2025 warrants further investigation to determine the nature and effectiveness of the capital investments made.
Decomposition of ROIC
PepsiCo Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 27, 2025 | = | × | × | ||||
| Dec 28, 2024 | = | × | × | ||||
| Dec 30, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 25, 2021 | = | × | × |
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The period under review demonstrates fluctuations in the key components driving return on invested capital. Overall, ROIC experienced initial stability followed by a notable decline in the most recent year presented. A decomposition of ROIC, based on operating profit margin, capital turnover, and the impact of taxes, reveals the underlying drivers of this performance.
- Operating Profit Margin (OPM)
- Operating profit margin exhibited volatility throughout the period. It decreased from 14.80% in 2021 to 13.92% in 2022, before recovering to 14.21% in 2023 and peaking at 15.28% in 2024. However, a significant decrease to 12.90% is observed in 2025. This suggests potential shifts in cost management or pricing power impacting profitability.
- Turnover of Capital (TO)
- The turnover of capital generally increased from 1.14 in 2021 to 1.24 in 2022, indicating improved efficiency in asset utilization. This trend plateaued with a slight decrease to 1.22 in 2023 and 1.20 in 2024, before declining to 1.13 in 2025. The recent decline suggests a potential slowdown in generating revenue from the capital employed.
- Effective Cash Tax Rate Impact (1 – CTR)
- The impact of the effective cash tax rate, represented by (1 – CTR), remained relatively stable between 81.88% and 77.15% from 2021 to 2023. A slight increase to 78.20% was observed in 2024, followed by a more substantial increase to 80.59% in 2025. This indicates a decreasing tax burden, partially offsetting some of the declines in profitability and capital efficiency in the latest year.
- Return on Invested Capital (ROIC)
- ROIC remained relatively consistent between 13.79% and 13.36% from 2021 to 2023, reflecting the interplay of the other factors. A rise to 14.32% in 2024 was observed, driven by improvements in both operating profit margin and capital turnover. However, ROIC experienced a notable decline to 11.73% in 2025, primarily attributable to the combined effect of a lower operating profit margin and reduced capital turnover, despite a more favorable tax impact.
The decline in ROIC in 2025 warrants further investigation. While the tax rate provided a partial offset, the simultaneous decrease in both profitability and asset utilization suggests underlying operational challenges that require attention.
Operating Profit Margin (OPM)
PepsiCo Inc., OPM calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Net revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Net revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
The operating profit margin exhibited fluctuations over the five-year period. Net operating profit before taxes generally increased, though with a decrease in the most recent year presented. Net revenue also demonstrated an overall upward trend, with a slight deceleration in growth during the final two years.
- Operating Profit Margin (OPM)
- The operating profit margin began at 14.80% in 2021. A decline was observed in 2022, with the margin decreasing to 13.92%. The margin then experienced a modest recovery in 2023, reaching 14.21%. A more substantial increase occurred in 2024, with the OPM rising to 15.28%, representing the highest value within the observed period. However, the most recent year, 2025, saw a notable decrease, with the operating profit margin falling to 12.90%.
The relationship between net operating profit before taxes and net revenue suggests increasing profitability from 2021 to 2024. However, the decline in both the operating profit margin and net operating profit before taxes in 2025 warrants further investigation to determine the underlying causes. The deceleration in net revenue growth in the final two years may also be a contributing factor to the 2025 results.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes increased from US$11,760 million in 2021 to US$14,038 million in 2024, indicating improved operational profitability. However, a decrease to US$12,112 million was recorded in 2025, reversing the prior trend.
- Net Revenue
- Net revenue consistently increased over the period, rising from US$79,474 million in 2021 to US$93,925 million in 2025. The rate of increase slowed between 2023 and 2024 (US$5,079 million) compared to 2022 and 2023 (US$7,079 million), and again between 2024 and 2025 (US$2,071 million).
Turnover of Capital (TO)
PepsiCo Inc., TO calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 Invested capital. See details »
2 2025 Calculation
TO = Net revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
The analysis reveals a fluctuating pattern in the turnover of capital over the five-year period. While net revenue generally increased, the relationship between revenue and invested capital has varied, impacting the turnover ratio.
- Net Revenue
- Net revenue demonstrated consistent growth from 2021 to 2025, increasing from US$79,474 million to US$93,925 million. The rate of growth slowed between 2023 and 2025, with smaller incremental increases compared to the prior two years.
- Invested Capital
- Invested capital initially decreased slightly from 2021 to 2022, then exhibited a more substantial increase from 2022 to 2025. The largest increase occurred between 2024 and 2025, rising from US$76,674 million to US$83,234 million. This suggests increasing capital expenditure or acquisitions during this period.
- Turnover of Capital (TO)
- The turnover of capital ratio increased from 1.14 in 2021 to 1.24 in 2022, indicating improved efficiency in generating revenue from invested capital. However, the ratio subsequently declined to 1.22 in 2023 and 1.20 in 2024. A further decrease was observed in 2025, with the ratio falling to 1.13. This suggests that while revenue continued to grow, the increase in invested capital outpaced revenue growth in the latter years of the period, leading to a diminished ability to generate revenue per dollar of invested capital.
The observed trend in the turnover of capital suggests a potential diminishing return on invested capital. While revenue growth remains positive, the increasing invested capital base requires monitoring to ensure continued efficient capital allocation and profitability.
Effective Cash Tax Rate (CTR)
PepsiCo Inc., CTR calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| Philip Morris International Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
The effective cash tax rate exhibited a generally increasing trend from 2021 to 2023, followed by a decline in the most recent two years presented. Cash operating taxes also demonstrated an overall increase during the period, though with a decrease in the latest year. Net operating profit before taxes (NOPBT) increased significantly between 2021 and 2024, before experiencing a decrease in 2025.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate began at 18.12% in 2021 and rose to 22.12% in 2022, representing a 4 percentage point increase. This upward trajectory continued into 2023, reaching 22.85%. A slight decrease to 21.80% was observed in 2024. The most recent year, 2025, shows a further decline to 19.41%, bringing the rate below the initial 2021 level. This suggests potential changes in the company’s tax profile or the impact of tax-related legislation.
- Cash Operating Taxes
- Cash operating taxes increased from US$2,131 million in 2021 to US$2,660 million in 2022, and further to US$2,970 million in 2023. The amount rose again in 2024 to US$3,060 million, indicating a consistent rise in cash tax payments. However, 2025 saw a decrease to US$2,351 million, aligning with the observed decline in the effective cash tax rate and potentially reflecting lower taxable income.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT showed a steady increase from US$11,760 million in 2021 to US$12,024 million in 2022, and then to US$12,998 million in 2023. A substantial increase was noted in 2024, reaching US$14,038 million. However, NOPBT decreased to US$12,112 million in 2025. This decrease in NOPBT, coupled with the lower cash operating taxes, contributed to the reduced effective cash tax rate in the final year.
The interplay between NOPBT and cash operating taxes is evident in the fluctuations of the effective cash tax rate. The decrease in both NOPBT and cash operating taxes in 2025 suggests a potential impact from factors affecting profitability or tax planning strategies.