Pepsico, Inc. — Earnings Quality Grade F
PEP · Consumer Defensive
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 36 days, change +2 days YoY
AR growth 9.2% vs revenue growth 2.3%
Revenue 2.3%, CFFO -3.4%. Cash follows revenue
Expense Quality
Inventory 10.2% vs COGS 3.2%. Normal
CapEx growth -17.0% vs revenue 2.3%. Normal
SG&A/Gross Profit = 73.5%, exceeds 70%
Gross margin 54.1%, change -0.4pp. Stable
Cash Flow Quality
CFFO/NI = 1.47. Profits backed by cash
FCF $7.7B, FCF/NI = 0.93
Accruals ratio = -3.6%. Low accruals
Cash $9.5B covers only 19% of debt $49.9B
Balance Sheet Health
Goodwill+Intangibles $34.0B = 167% of equity. Over 50%
Debt/EBITDA = 3.2x. Healthy
Other assets 12.4% vs revenue 2.3%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change 5% YoY. Normal
Manipulation Score
M-Score = -2.56 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08