Coca-Cola vs PepsiCo: which one carries more debt?
At the end of fiscal 2025, Coca-Cola owed $45.5 billion and PepsiCo $49.2 billion. About the same. But PepsiCo sells about twice as much.
So which one carries more debt? The debt alone doesn’t answer that. It depends on what you compare it with. Below we compare the same debt with sales, then with earnings, then with cash, using both companies’ filings with the SEC. By the end you have four checks you can run on any company.
Video: Coca-Cola vs PepsiCo on YouTube
Check 1: net debt
Debt is money a company has borrowed and must pay back. Both companies also hold cash. Net debt is what would be left if each used all its cash to pay its debt. Balance sheet at year end, $ billions:
| FY2025, year end | Coca-Cola | PepsiCo |
|---|---|---|
| Short-term debt (due within a year) | 3.4 | 6.9 |
| Long-term debt | 42.1 | 42.3 |
| Total debt | 45.5 | 49.2 |
| Minus cash and short-term investments | −15.8 | −9.5 |
| Net debt | 29.7 | 39.7 |
These two numbers stay the same for the rest of the post. Only what we compare them with changes.
Why not sales
Revenue is another word for sales. Coca-Cola had $47.9 billion of revenue in 2025, PepsiCo $93.9 billion.
| FY2025 | Coca-Cola | PepsiCo |
|---|---|---|
| Revenue ($B) | 47.9 | 93.9 |
| Net debt ($B) | 29.7 | 39.7 |
| Net debt per $100 of sales | $62 | $42 |
PepsiCo has more debt in dollars, but about twice the sales, so less debt for each $100 of sales. By this measure Coca-Cola carries more debt. But a company doesn’t pay back debt with sales. It pays it back with what is left after its costs.
Check 2: years to repay
Operating income is the profit from running the business, before interest and tax. We add back depreciation and amortization: the cost of factories, trucks and some brands bought in past years, spread over time. It lowers profit, but no cash goes out this year. The result is EBITDA.
| FY2025, $B | Coca-Cola | PepsiCo |
|---|---|---|
| Operating income | 13.8* | 11.5* |
| Plus depreciation and amortization | 1.1 | 3.5 |
| EBITDA | 14.8 | 14.9 |
| Net debt / EBITDA (years) | 2.0×* | 2.7×* |
* Includes one-off charges: Coca-Cola $1.3 billion (mainly a BodyArmor impairment), PepsiCo $3.4 billion (mainly impairments, including Rockstar, and restructuring). Without them: 1.8 years for Coca-Cola, 2.2 for PepsiCo.
Net debt divided by EBITDA tells you how many years of these earnings it would take to pay back the net debt. Against earnings the answer flips: now PepsiCo carries more debt, with or without the one-offs.
Check 3: interest cover
Debt has a cost every year: interest. Interest cover is operating income divided by net interest, which is the interest on debt minus the interest earned on cash.
| FY2025 | Coca-Cola | PepsiCo |
|---|---|---|
| Operating income ($B) | 13.8* | 11.5* |
| Net interest expense ($B) | 0.87 | 1.12† |
| Interest cover | 15.9×* | 10.3×* |
† PepsiCo reports “net interest expense and other” as one line.
A higher number means more room if profits fall. Coca-Cola holds a lot of cash and earns interest on it, which helps here. On gross interest alone ($1.65 billion), before what it earns on cash, its cover is 8.3×.
Check 4: the cash test, five years
Cash comes from a different report, the cash flow statement. Here we add up five years, FY2021 to FY2025. Free cash flow is operating cash flow minus capital spending, calculated the same way for both. Buybacks are when a company buys its own shares on the market.
| FY2021–FY2025, total, $B | Coca-Cola | PepsiCo |
|---|---|---|
| Free cash flow | 40.6* | 35.4 |
| Dividends | 40.0 | 33.5 |
| Buybacks | 6.4 | 4.6 |
| Free cash flow minus payouts | −5.7* | −2.8 |
* After a $6.0 billion tax deposit to the IRS (2024) and a $6.1 billion fairlife payment (2025). Without them, Coca-Cola’s free cash flow was $52.6 billion, more than it paid out.
Both paid out more than their free cash flow, for different reasons. Coca-Cola’s gap comes from the two one-off payments. At PepsiCo, total debt rose by $5.0 billion over the same five years.
Rule: five years, not one
One year can mislead. Net debt / EBITDA for each year:
| Net debt / EBITDA | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Coca-Cola | 2.6× | 2.3× | 2.3× | 2.7× | 2.0× |
| PepsiCo | 2.5× | 2.4× | 2.3× | 2.2× | 2.7× |
Operating income includes one-off charges in several years. PepsiCo’s FY2022 had 53 weeks.
Which company is higher changes from year to year, sometimes because of one-off charges. Over five years Coca-Cola stayed between 2.0 and 2.7 years, PepsiCo between 2.2 and 2.7. Both stayed between 2 and 3 years of earnings.
The four checks
| Check | Coca-Cola | PepsiCo | Reference |
|---|---|---|---|
| 1 · Net debt (debt minus cash) | $29.7B | $39.7B | the starting point |
| 2 · Years to repay (net debt ÷ EBITDA) | 2.0×* | 2.7×* | S&P: 2–3× = intermediate |
| 3 · Interest cover (operating income ÷ net interest) | 15.9×* | 10.3×* | above 8.5× = top band (Damodaran) |
| 4 · Cash test, 5 years (FCF minus dividends and buybacks) | −$5.7B* | −$2.8B | no standard threshold |
| Credit rating (S&P, on the bonds) | A+ | A+ | scale from AAA down to D |
* Includes one-off charges or payments.
The references are bands, not grades. S&P measures debt its own way, including leases, so our ratios are not directly comparable with its bands. The interest band comes from Professor Aswath Damodaran’s table at NYU Stern, a simplified model, not an agency rating. S&P rates both companies A+ with a stable outlook. A credit rating is an opinion on the company’s bonds, not on its stock.
In 2025, against sales, Coca-Cola carries more debt. Against earnings and interest, PepsiCo. Over five years, the two are close. Debt is repaid with earnings and cash, not with sales. There is no single number for how much is too much, but these four checks tell you where to look. Look at five years, not one, and read the footnotes for one-offs.
Methodology
- Period: fiscal year 2025 (Coca-Cola: year ended Dec 31, 2025; PepsiCo: year ended Dec 27, 2025). Five-year figures FY2021 to FY2025, the same years for both.
- Sources: fourth-quarter earnings releases filed with the SEC (Form 8-K, Exhibit 99.1) and annual reports (Form 10-K), SEC EDGAR. Line items are taken from the filings, not from third-party data vendors.
- Total debt = short-term debt (loans and notes payable, current maturities) + long-term debt, as on the balance sheet. Lease liabilities are not included.
- Cash = cash and cash equivalents + short-term investments (+ marketable securities for Coca-Cola). Net debt = total debt − cash, at year end.
- EBITDA = operating income (GAAP) + depreciation and amortization from the cash flow statement.
- Interest cover = operating income / net interest expense. Coca-Cola: interest expense $1.65 billion minus interest income $0.79 billion (computed from unrounded figures).
- Free cash flow = net cash from operating activities − capital expenditures (our calculation, non-GAAP).
- Coca-Cola also receives income from equity-method investments (bottlers), which is not in operating income or EBITDA.
- Reference bands: S&P Global Ratings, Corporate Methodology (standard volatility table); Aswath Damodaran, synthetic ratings for large non-financial firms (NYU Stern).
- Credit ratings: S&P Global Ratings issuer credit rating, A+ with stable outlook, for both (Coca-Cola: S&P annual review; PepsiCo: pricing term sheet filed with the SEC, Feb 4, 2026).
- Rounding: figures are GAAP unless noted and rounded; components may not sum.
- Corrections: if we find an error, we correct it here and say so.
Disclaimer
Educational and informational only. Not investment advice, not a recommendation to buy, sell or hold any security, and not an offer or solicitation. The analysis describes historical, publicly filed data; past results do not indicate future results. Verify against the original filings before relying on them.
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