Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Fiserv Inc., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The solvency analysis reveals a significant structural shift in the capital composition between 2018 and 2019, transitioning from a high-leverage position to a more conservative balance sheet. While balance sheet solvency ratios improved markedly after 2018, earnings-based coverage ratios experienced a corresponding decline, indicating a change in the company's ability to service its obligations relative to its operating income.
- Debt and Capital Structure Ratios
- A peak in leverage occurred in 2018, with the debt to equity ratio reaching 2.60 and debt to assets at 0.53. From 2019 onward, these ratios decreased sharply and remained relatively stable; the debt to equity ratio settled between 0.64 and 0.69, while debt to assets remained constant at 0.28 through 2021. The inclusion of operating lease liabilities resulted in only marginal increases across these metrics, suggesting that lease obligations are not a primary driver of solvency risk.
- Financial Leverage
- Financial leverage followed the trajectory of the debt ratios, rising from 3.77 in 2017 to a peak of 4.91 in 2018 before dropping to 2.35 in 2019. The ratio remained stable through 2021, ending at 2.46, which confirms a reduction in the use of debt to finance assets compared to the 2017-2018 period.
- Coverage Ratios
- An inverse trend is observed in coverage capabilities. The interest coverage ratio was strongest in 2018 at 9.11 but declined sharply to 3.19 in 2019 and further to 2.64 in 2020. A partial recovery to 3.54 was noted in 2021. Fixed charge coverage mirrored this pattern, falling from a high of 6.03 in 2018 to a low of 2.28 in 2020 before recovering to 3.06 in 2021. This suggests that while total debt levels relative to equity and assets decreased, the margin of safety for meeting fixed obligations narrowed significantly after 2018.
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Debt Ratios
Coverage Ratios
Debt to Equity
Fiserv Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term and current maturities of long-term debt | 508) | 384) | 287) | 4) | 3) | |
| Long-term debt, excluding current maturities | 20,729) | 20,300) | 21,612) | 5,955) | 4,897) | |
| Total debt | 21,237) | 20,684) | 21,899) | 5,959) | 4,900) | |
| Total Fiserv, Inc. shareholders’ equity | 30,952) | 32,330) | 32,979) | 2,293) | 2,731) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.69 | 0.64 | 0.66 | 2.60 | 1.79 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Accenture PLC | 0.00 | 0.00 | — | — | — | |
| Adobe Inc. | 0.28 | 0.31 | — | — | — | |
| AppLovin Corp. | 1.53 | — | — | — | — | |
| Cadence Design Systems Inc. | 0.13 | — | — | — | — | |
| Datadog Inc. | 0.71 | — | — | — | — | |
| International Business Machines Corp. | 2.74 | — | — | — | — | |
| Intuit Inc. | 0.21 | — | — | — | — | |
| Microsoft Corp. | 0.50 | — | — | — | — | |
| Oracle Corp. | 16.08 | — | — | — | — | |
| Palantir Technologies Inc. | 0.00 | — | — | — | — | |
| Palo Alto Networks Inc. | 5.08 | — | — | — | — | |
| Salesforce Inc. | 0.07 | — | — | — | — | |
| ServiceNow Inc. | 0.43 | — | — | — | — | |
| Synopsys Inc. | 0.02 | 0.03 | — | — | — | |
| Workday Inc. | 0.55 | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Software & Services | 0.83 | — | — | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.83 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Total Fiserv, Inc. shareholders’ equity
= 21,237 ÷ 30,952 = 0.69
2 Click competitor name to see calculations.
The solvency profile indicates a fundamental shift in the capital structure occurring between 2018 and 2019. While the initial period was characterized by increasing leverage, a substantial expansion in both total debt and shareholders' equity subsequently led to a significantly more conservative solvency position.
- Total Debt Evolution
- Total debt increased from 4,900 million US$ in 2017 to 5,959 million US$ in 2018, followed by a sharp escalation to 21,899 million US$ in 2019. Following this surge, debt levels stabilized, ending the period at 21,237 million US$ on December 31, 2021.
- Shareholders' Equity Growth
- Equity experienced a dramatic increase in 2019, rising from 2,293 million US$ to 32,979 million US$. This represents a significant expansion of the equity base, which remained robust through 2021, closing at 30,952 million US$.
- Debt to Equity Ratio Trends
- The debt to equity ratio exhibited a peak of 2.60 in 2018, indicating a period of higher financial leverage. However, the ratio declined sharply to 0.66 in 2019 and remained stable between 0.64 and 0.69 through 2021. This downward shift demonstrates a marked improvement in solvency, as the growth in equity far outpaced the growth in debt during the structural change in 2019.
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Debt to Equity (including Operating Lease Liability)
Fiserv Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term and current maturities of long-term debt | 508) | 384) | 287) | 4) | 3) | |
| Long-term debt, excluding current maturities | 20,729) | 20,300) | 21,612) | 5,955) | 4,897) | |
| Total debt | 21,237) | 20,684) | 21,899) | 5,959) | 4,900) | |
| Operating lease liabilities, current portion (included within Accounts payable and accrued expenses) | 122) | 125) | 140) | —) | —) | |
| Operating lease liabilities, noncurrent portion (included within Other long-term liabilities) | 615) | 471) | 603) | —) | —) | |
| Total debt (including operating lease liability) | 21,974) | 21,280) | 22,642) | 5,959) | 4,900) | |
| Total Fiserv, Inc. shareholders’ equity | 30,952) | 32,330) | 32,979) | 2,293) | 2,731) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.71 | 0.66 | 0.69 | 2.60 | 1.79 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.18 | 0.21 | — | — | — | |
| Adobe Inc. | 0.32 | 0.35 | — | — | — | |
| AppLovin Corp. | 1.57 | — | — | — | — | |
| Cadence Design Systems Inc. | 0.18 | — | — | — | — | |
| Datadog Inc. | 0.78 | — | — | — | — | |
| International Business Machines Corp. | 2.92 | — | — | — | — | |
| Intuit Inc. | 0.25 | — | — | — | — | |
| Microsoft Corp. | 0.58 | — | — | — | — | |
| Oracle Corp. | 16.61 | — | — | — | — | |
| Palantir Technologies Inc. | 0.11 | — | — | — | — | |
| Palo Alto Networks Inc. | 5.68 | — | — | — | — | |
| Salesforce Inc. | 0.15 | — | — | — | — | |
| ServiceNow Inc. | 0.60 | — | — | — | — | |
| Synopsys Inc. | 0.13 | 0.14 | — | — | — | |
| Workday Inc. | 0.68 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.93 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.90 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Fiserv, Inc. shareholders’ equity
= 21,974 ÷ 30,952 = 0.71
2 Click competitor name to see calculations.
The financial solvency metrics indicate a significant shift in the capital structure over the five-year period analyzed. The entity transitioned from a high-leverage position in 2018 to a more equity-funded position from 2019 onwards, characterized by a substantial expansion of the balance sheet.
- Leverage Acceleration (2017-2018)
- A notable increase in the debt-to-equity ratio is observed, rising from 1.79 in 2017 to 2.60 in 2018. This trend was driven by a rise in total debt to 5,959 million US dollars and a simultaneous decrease in shareholders' equity to 2,293 million US dollars, indicating a period of increased financial risk and higher reliance on borrowed funds.
- Capital Structure Transformation (2019)
- A dramatic pivot in the solvency profile occurred in 2019. Total debt increased sharply to 22,642 million US dollars, but this was offset by a massive surge in shareholders' equity to 32,979 million US dollars. Consequently, the debt-to-equity ratio dropped precipitously to 0.69, marking a shift toward a more conservative leverage position.
- Stabilization and Minor Variance (2020-2021)
- Following the 2019 expansion, the solvency ratio stabilized, remaining between 0.66 in 2020 and 0.71 in 2021. Total debt remained relatively constant, ending at 21,974 million US dollars, while shareholders' equity saw a slight decline to 30,952 million US dollars by the end of 2021.
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Debt to Capital
Fiserv Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term and current maturities of long-term debt | 508) | 384) | 287) | 4) | 3) | |
| Long-term debt, excluding current maturities | 20,729) | 20,300) | 21,612) | 5,955) | 4,897) | |
| Total debt | 21,237) | 20,684) | 21,899) | 5,959) | 4,900) | |
| Total Fiserv, Inc. shareholders’ equity | 30,952) | 32,330) | 32,979) | 2,293) | 2,731) | |
| Total capital | 52,189) | 53,014) | 54,878) | 8,252) | 7,631) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.41 | 0.39 | 0.40 | 0.72 | 0.64 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Accenture PLC | 0.00 | 0.00 | — | — | — | |
| Adobe Inc. | 0.22 | 0.24 | — | — | — | |
| AppLovin Corp. | 0.60 | — | — | — | — | |
| Cadence Design Systems Inc. | 0.11 | — | — | — | — | |
| Datadog Inc. | 0.41 | — | — | — | — | |
| International Business Machines Corp. | 0.73 | — | — | — | — | |
| Intuit Inc. | 0.17 | — | — | — | — | |
| Microsoft Corp. | 0.33 | — | — | — | — | |
| Oracle Corp. | 0.94 | — | — | — | — | |
| Palantir Technologies Inc. | 0.00 | — | — | — | — | |
| Palo Alto Networks Inc. | 0.84 | — | — | — | — | |
| Salesforce Inc. | 0.06 | — | — | — | — | |
| ServiceNow Inc. | 0.30 | — | — | — | — | |
| Synopsys Inc. | 0.02 | 0.03 | — | — | — | |
| Workday Inc. | 0.35 | — | — | — | — | |
| Debt to Capital, Sector | ||||||
| Software & Services | 0.45 | — | — | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.45 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 21,237 ÷ 52,189 = 0.41
2 Click competitor name to see calculations.
Between 2017 and 2021, a significant transformation in the capital structure is evident, characterized by a substantial expansion in both absolute debt and total capital starting in 2019. Although the nominal amount of debt increased, the relative weight of debt within the total capital structure decreased, indicating a shift in the solvency profile.
- Total Debt Trends
- Total debt levels exhibited a modest increase between 2017 and 2018, rising from 4,900 million US$ to 5,959 million US$. A sharp escalation occurred in 2019, where debt surged to 21,899 million US$. Following this spike, debt levels remained relatively stable over the subsequent two years, closing at 21,237 million US$ on December 31, 2021.
- Total Capital Growth
- Total capital followed a growth trajectory similar to total debt but with greater magnitude. After a slight increase from 7,631 million US$ in 2017 to 8,252 million US$ in 2018, capital expanded drastically to 54,878 million US$ in 2019. A gradual decline followed, with total capital reaching 52,189 million US$ by the end of 2021.
- Debt to Capital Ratio Interpretation
- The debt to capital ratio initially rose from 0.64 in 2017 to 0.72 in 2018. However, a significant reversal occurred in 2019, as the ratio dropped to 0.40. This decline occurred despite the increase in total debt, signifying that the increase in total capital far outweighed the new debt obligations. The ratio subsequently stabilized, fluctuating minimally between 0.39 in 2020 and 0.41 in 2021, reflecting a more balanced leverage position relative to the 2018 peak.
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Debt to Capital (including Operating Lease Liability)
Fiserv Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term and current maturities of long-term debt | 508) | 384) | 287) | 4) | 3) | |
| Long-term debt, excluding current maturities | 20,729) | 20,300) | 21,612) | 5,955) | 4,897) | |
| Total debt | 21,237) | 20,684) | 21,899) | 5,959) | 4,900) | |
| Operating lease liabilities, current portion (included within Accounts payable and accrued expenses) | 122) | 125) | 140) | —) | —) | |
| Operating lease liabilities, noncurrent portion (included within Other long-term liabilities) | 615) | 471) | 603) | —) | —) | |
| Total debt (including operating lease liability) | 21,974) | 21,280) | 22,642) | 5,959) | 4,900) | |
| Total Fiserv, Inc. shareholders’ equity | 30,952) | 32,330) | 32,979) | 2,293) | 2,731) | |
| Total capital (including operating lease liability) | 52,926) | 53,610) | 55,621) | 8,252) | 7,631) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.42 | 0.40 | 0.41 | 0.72 | 0.64 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.15 | 0.17 | — | — | — | |
| Adobe Inc. | 0.24 | 0.26 | — | — | — | |
| AppLovin Corp. | 0.61 | — | — | — | — | |
| Cadence Design Systems Inc. | 0.15 | — | — | — | — | |
| Datadog Inc. | 0.44 | — | — | — | — | |
| International Business Machines Corp. | 0.74 | — | — | — | — | |
| Intuit Inc. | 0.20 | — | — | — | — | |
| Microsoft Corp. | 0.37 | — | — | — | — | |
| Oracle Corp. | 0.94 | — | — | — | — | |
| Palantir Technologies Inc. | 0.10 | — | — | — | — | |
| Palo Alto Networks Inc. | 0.85 | — | — | — | — | |
| Salesforce Inc. | 0.13 | — | — | — | — | |
| ServiceNow Inc. | 0.37 | — | — | — | — | |
| Synopsys Inc. | 0.11 | 0.12 | — | — | — | |
| Workday Inc. | 0.41 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.48 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.47 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 21,974 ÷ 52,926 = 0.42
2 Click competitor name to see calculations.
The financial trajectory between 2017 and 2021 is characterized by a significant shift in capital structure and a subsequent stabilization of solvency metrics. While the initial period showed increasing leverage, a substantial expansion in the capital base occurred in 2019, which fundamentally altered the company's debt-to-capital profile.
- Debt and Capital Scaling
- A modest increase in both total debt and total capital was observed from 2017 to 2018. However, 2019 marked a period of extreme expansion, with total debt rising from 5,959 million to 22,642 million and total capital increasing from 8,252 million to 55,621 million. Following this surge, these figures remained relatively stable through 2021, with total debt ending at 21,974 million and total capital at 52,926 million.
- Debt to Capital Ratio Analysis
- The debt to capital ratio initially trended upward, rising from 0.64 in 2017 to a peak of 0.72 in 2018, indicating a higher reliance on debt relative to total capital. This trend reversed sharply in 2019, as the ratio fell to 0.41. This decrease occurred despite the absolute increase in debt, signifying that the growth in total capital significantly outpaced the acquisition of new debt during that fiscal year.
- Solvency Stabilization
- From 2019 through 2021, the solvency position demonstrated remarkable consistency. The debt to capital ratio remained within a narrow range, fluctuating slightly between 0.40 and 0.42. This stability indicates a disciplined approach to maintaining the capital structure following the major adjustments made in 2019.
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Debt to Assets
Fiserv Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term and current maturities of long-term debt | 508) | 384) | 287) | 4) | 3) | |
| Long-term debt, excluding current maturities | 20,729) | 20,300) | 21,612) | 5,955) | 4,897) | |
| Total debt | 21,237) | 20,684) | 21,899) | 5,959) | 4,900) | |
| Total assets | 76,249) | 74,619) | 77,539) | 11,262) | 10,289) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.28 | 0.28 | 0.28 | 0.53 | 0.48 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Accenture PLC | 0.00 | 0.00 | — | — | — | |
| Adobe Inc. | 0.15 | 0.17 | — | — | — | |
| AppLovin Corp. | 0.53 | — | — | — | — | |
| Cadence Design Systems Inc. | 0.08 | — | — | — | — | |
| Datadog Inc. | 0.31 | — | — | — | — | |
| International Business Machines Corp. | 0.39 | — | — | — | — | |
| Intuit Inc. | 0.13 | — | — | — | — | |
| Microsoft Corp. | 0.21 | — | — | — | — | |
| Oracle Corp. | 0.64 | — | — | — | — | |
| Palantir Technologies Inc. | 0.00 | — | — | — | — | |
| Palo Alto Networks Inc. | 0.31 | — | — | — | — | |
| Salesforce Inc. | 0.04 | — | — | — | — | |
| ServiceNow Inc. | 0.15 | — | — | — | — | |
| Synopsys Inc. | 0.01 | 0.02 | — | — | — | |
| Workday Inc. | 0.21 | — | — | — | — | |
| Debt to Assets, Sector | ||||||
| Software & Services | 0.28 | — | — | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.29 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 21,237 ÷ 76,249 = 0.28
2 Click competitor name to see calculations.
The balance sheet experienced a significant expansion between 2018 and 2019, characterized by a substantial increase in both total debt and total assets. Following this period of rapid growth, the financial structure entered a phase of stability, with the solvency metrics remaining consistent through 2021.
- Total Debt Trends
- Total debt grew from 4,900 million US$ in 2017 to 21,237 million US$ by 2021. The most notable surge occurred in 2019, where debt increased from 5,959 million US$ to 21,899 million US$, representing a significant increase in leverage. This figure remained relatively stable over the subsequent two years.
- Total Asset Expansion
- Total assets increased from 10,289 million US$ in 2017 to 76,249 million US$ in 2021. A massive escalation was observed in 2019, with assets rising from 11,262 million US$ to 77,539 million US$. The magnitude of asset growth during this period far exceeded the growth in total debt.
- Debt to Assets Ratio Analysis
- The debt to assets ratio rose slightly from 0.48 in 2017 to a peak of 0.53 in 2018. However, following the asset expansion of 2019, the ratio declined sharply to 0.28. This ratio remained unchanged at 0.28 through 2020 and 2021, indicating that the proportional relationship between debt and assets was maintained with high consistency after the initial expansion.
Overall, while the absolute level of debt increased significantly, the simultaneous and more aggressive growth in total assets resulted in a improved solvency profile. The reduction of the debt to assets ratio from 0.53 to 0.28 suggests a more conservative leverage position relative to the total asset base starting in 2019.
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Debt to Assets (including Operating Lease Liability)
Fiserv Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term and current maturities of long-term debt | 508) | 384) | 287) | 4) | 3) | |
| Long-term debt, excluding current maturities | 20,729) | 20,300) | 21,612) | 5,955) | 4,897) | |
| Total debt | 21,237) | 20,684) | 21,899) | 5,959) | 4,900) | |
| Operating lease liabilities, current portion (included within Accounts payable and accrued expenses) | 122) | 125) | 140) | —) | —) | |
| Operating lease liabilities, noncurrent portion (included within Other long-term liabilities) | 615) | 471) | 603) | —) | —) | |
| Total debt (including operating lease liability) | 21,974) | 21,280) | 22,642) | 5,959) | 4,900) | |
| Total assets | 76,249) | 74,619) | 77,539) | 11,262) | 10,289) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.29 | 0.29 | 0.29 | 0.53 | 0.48 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.08 | 0.09 | — | — | — | |
| Adobe Inc. | 0.17 | 0.19 | — | — | — | |
| AppLovin Corp. | 0.54 | — | — | — | — | |
| Cadence Design Systems Inc. | 0.11 | — | — | — | — | |
| Datadog Inc. | 0.34 | — | — | — | — | |
| International Business Machines Corp. | 0.42 | — | — | — | — | |
| Intuit Inc. | 0.16 | — | — | — | — | |
| Microsoft Corp. | 0.25 | — | — | — | — | |
| Oracle Corp. | 0.66 | — | — | — | — | |
| Palantir Technologies Inc. | 0.08 | — | — | — | — | |
| Palo Alto Networks Inc. | 0.35 | — | — | — | — | |
| Salesforce Inc. | 0.10 | — | — | — | — | |
| ServiceNow Inc. | 0.21 | — | — | — | — | |
| Synopsys Inc. | 0.08 | 0.08 | — | — | — | |
| Workday Inc. | 0.26 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.32 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.31 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 21,974 ÷ 76,249 = 0.29
2 Click competitor name to see calculations.
The analysis of solvency ratios from 2017 to 2021 reveals a significant transformation in the capital structure, characterized by a massive expansion of both liabilities and assets, followed by a period of stabilization.
- Total Debt Trends
- Total debt, including operating lease liabilities, remained relatively stable between 2017 and 2018, increasing from 4,900 million to 5,959 million. A substantial surge occurred in 2019, where debt levels jumped to 22,642 million. Following this spike, the debt levels entered a plateau phase, fluctuating slightly to 21,280 million in 2020 and ending at 21,974 million in 2021.
- Total Asset Growth
- The asset base followed a growth trajectory similar to debt but on a much larger scale. Assets grew marginally from 10,289 million in 2017 to 11,262 million in 2018, before experiencing an exponential increase to 77,539 million in 2019. This expansion was maintained through 2021, with assets closing the period at 76,249 million.
- Debt to Assets Ratio Analysis
- The debt to assets ratio initially exhibited an upward trend, rising from 0.48 in 2017 to 0.53 in 2018, suggesting a slight increase in financial leverage. However, in 2019, the ratio dropped sharply to 0.29. This indicates that the growth in total assets significantly outpaced the increase in total debt during that year. From 2019 through 2021, the ratio remained perfectly stagnant at 0.29, demonstrating a consistent and stable solvency position relative to the total asset base over the final three years of the observed period.
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Financial Leverage
Fiserv Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 76,249) | 74,619) | 77,539) | 11,262) | 10,289) | |
| Total Fiserv, Inc. shareholders’ equity | 30,952) | 32,330) | 32,979) | 2,293) | 2,731) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.46 | 2.31 | 2.35 | 4.91 | 3.77 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Accenture PLC | 2.21 | 2.18 | — | — | — | |
| Adobe Inc. | 1.84 | 1.83 | — | — | — | |
| AppLovin Corp. | 2.88 | — | — | — | — | |
| Cadence Design Systems Inc. | 1.60 | — | — | — | — | |
| Datadog Inc. | 2.29 | — | — | — | — | |
| International Business Machines Corp. | 6.98 | — | — | — | — | |
| Intuit Inc. | 1.57 | — | — | — | — | |
| Microsoft Corp. | 2.35 | — | — | — | — | |
| Oracle Corp. | 25.03 | — | — | — | — | |
| Palantir Technologies Inc. | 1.42 | — | — | — | — | |
| Palo Alto Networks Inc. | 16.14 | — | — | — | — | |
| Salesforce Inc. | 1.60 | — | — | — | — | |
| ServiceNow Inc. | 2.92 | — | — | — | — | |
| Synopsys Inc. | 1.65 | 1.64 | — | — | — | |
| Workday Inc. | 2.66 | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Software & Services | 2.95 | — | — | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.87 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Total Fiserv, Inc. shareholders’ equity
= 76,249 ÷ 30,952 = 2.46
2 Click competitor name to see calculations.
The financial position of the entity underwent a significant structural transformation between 2017 and 2021, characterized by a massive expansion of the balance sheet and a subsequent stabilization of solvency metrics.
- Asset and Equity Expansion
- A substantial increase in both total assets and shareholders' equity occurred in 2019. Total assets rose from $11,262 million in 2018 to $77,539 million in 2019, while shareholders' equity increased from $2,293 million to $32,979 million during the same period. Following this surge, these values remained relatively stable through 2021, with total assets concluding at $76,249 million and equity at $30,952 million.
- Financial Leverage Trends
- Financial leverage exhibited notable volatility before reaching a state of equilibrium. The ratio increased from 3.77 in 2017 to a peak of 4.91 in 2018, indicating a period of heightened reliance on debt relative to equity. However, coinciding with the balance sheet expansion in 2019, the leverage ratio decreased sharply to 2.35. This downward trend continued slightly into 2020 at 2.31, before settling at 2.46 by the end of 2021.
- Solvency Implications
- The sharp decline in the financial leverage ratio after 2018 suggests a fundamental shift toward a more conservative capital structure. The substantial growth in the equity base relative to total assets reduced the entity's financial risk and improved its solvency profile, resulting in a more balanced ratio of debt to equity compared to the initial two-year period.
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Interest Coverage
Fiserv Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Fiserv, Inc. | 1,334) | 958) | 893) | 1,187) | 1,246) | |
| Add: Net income attributable to noncontrolling interest | 69) | 17) | 21) | —) | —) | |
| Less: Income from discontinued operations, net of income taxes | —) | —) | —) | —) | 14) | |
| Add: Income tax expense | 363) | 196) | 198) | 378) | 158) | |
| Add: Interest expense | 696) | 716) | 507) | 193) | 176) | |
| Earnings before interest and tax (EBIT) | 2,462) | 1,887) | 1,619) | 1,758) | 1,566) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 3.54 | 2.64 | 3.19 | 9.11 | 8.90 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Accenture PLC | 131.46 | 205.84 | — | — | — | |
| Adobe Inc. | 51.49 | 37.00 | — | — | — | |
| AppLovin Corp. | 1.45 | — | — | — | — | |
| Cadence Design Systems Inc. | 46.26 | — | — | — | — | |
| Datadog Inc. | 0.12 | — | — | — | — | |
| International Business Machines Corp. | 5.20 | — | — | — | — | |
| Intuit Inc. | 89.14 | — | — | — | — | |
| Microsoft Corp. | 31.31 | — | — | — | — | |
| Oracle Corp. | 6.28 | — | — | — | — | |
| Palantir Technologies Inc. | -133.20 | — | — | — | — | |
| Palo Alto Networks Inc. | -1.85 | — | — | — | — | |
| Salesforce Inc. | 21.49 | — | — | — | — | |
| ServiceNow Inc. | 9.89 | — | — | — | — | |
| Synopsys Inc. | 240.38 | 125.16 | — | — | — | |
| Workday Inc. | -3.00 | — | — | — | — | |
| Interest Coverage, Sector | ||||||
| Software & Services | 17.09 | — | — | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 19.66 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,462 ÷ 696 = 3.54
2 Click competitor name to see calculations.
The analysis of solvency ratios from 2017 to 2021 reveals a significant shift in the capacity to service interest obligations, characterized by a period of sharp contraction followed by a modest recovery.
- Interest Coverage Ratio Trends
- The interest coverage ratio transitioned from a robust position of 9.11 in 2018 to a low of 2.64 in 2020. This represents a substantial reduction in the margin of safety for debt servicing. A recovery was initiated in 2021, with the ratio improving to 3.54.
- Earnings Before Interest and Tax (EBIT) Performance
- Operational profitability exhibited an overall upward trajectory, increasing from 1,566 million US dollars in 2017 to 2,462 million US dollars in 2021. Despite a minor contraction in 2019, the substantial growth in EBIT by the end of the period provided a stronger foundation for managing interest obligations.
- Interest Expense Dynamics
- A marked increase in interest expenses occurred beginning in 2019, where costs rose from 193 million US dollars to 507 million US dollars. Expenses peaked at 716 million US dollars in 2020 before stabilizing at 696 million US dollars in 2021. This trend indicates a significant expansion of the debt load during the 2019-2020 window.
- Correlation Between Profitability and Solvency
- The deterioration of the interest coverage ratio between 2018 and 2020 was primarily driven by the rapid escalation of interest expenses, which significantly outpaced EBIT growth. The improvement observed in 2021 is attributable to a combination of record EBIT levels and a slight reduction in total interest expenses.
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Fixed Charge Coverage
Fiserv Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Fiserv, Inc. | 1,334) | 958) | 893) | 1,187) | 1,246) | |
| Add: Net income attributable to noncontrolling interest | 69) | 17) | 21) | —) | —) | |
| Less: Income from discontinued operations, net of income taxes | —) | —) | —) | —) | 14) | |
| Add: Income tax expense | 363) | 196) | 198) | 378) | 158) | |
| Add: Interest expense | 696) | 716) | 507) | 193) | 176) | |
| Earnings before interest and tax (EBIT) | 2,462) | 1,887) | 1,619) | 1,758) | 1,566) | |
| Add: Operating lease cost | 162) | 198) | 207) | 118) | 126) | |
| Earnings before fixed charges and tax | 2,624) | 2,085) | 1,826) | 1,876) | 1,692) | |
| Interest expense | 696) | 716) | 507) | 193) | 176) | |
| Operating lease cost | 162) | 198) | 207) | 118) | 126) | |
| Fixed charges | 858) | 914) | 714) | 311) | 302) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 3.06 | 2.28 | 2.56 | 6.03 | 5.60 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Accenture PLC | 10.41 | 9.66 | — | — | — | |
| Adobe Inc. | 25.59 | 18.77 | — | — | — | |
| AppLovin Corp. | 1.35 | — | — | — | — | |
| Cadence Design Systems Inc. | 13.77 | — | — | — | — | |
| Datadog Inc. | 0.55 | — | — | — | — | |
| International Business Machines Corp. | 3.13 | — | — | — | — | |
| Intuit Inc. | 25.58 | — | — | — | — | |
| Microsoft Corp. | 16.90 | — | — | — | — | |
| Oracle Corp. | 5.17 | — | — | — | — | |
| Palantir Technologies Inc. | -7.89 | — | — | — | — | |
| Palo Alto Networks Inc. | -1.09 | — | — | — | — | |
| Salesforce Inc. | 2.92 | — | — | — | — | |
| ServiceNow Inc. | 2.95 | — | — | — | — | |
| Synopsys Inc. | 9.29 | 7.46 | — | — | — | |
| Workday Inc. | -0.69 | — | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Software & Services | 9.14 | — | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 12.08 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,624 ÷ 858 = 3.06
2 Click competitor name to see calculations.
The analysis of the fixed charge coverage reveals a period of significant volatility in the company's solvency profile between 2017 and 2021. While earnings before fixed charges and tax exhibited a general upward trajectory, the ratio of coverage was heavily impacted by a substantial increase in fixed obligations starting in 2019.
- Earnings before fixed charges and tax
- A consistent growth trend is observed in earnings, rising from 1,692 million US dollars in 2017 to 2,624 million US dollars by 2021. Aside from a marginal decline in 2019, the earnings capacity expanded steadily, with the most significant acceleration occurring between 2020 and 2021.
- Fixed charges
- Fixed charges remained relatively stable between 2017 and 2018, but experienced a sharp increase in 2019, jumping from 311 million US dollars to 714 million US dollars. This upward trend peaked in 2020 at 914 million US dollars before retreating slightly to 858 million US dollars in 2021. The magnitude of the increase suggests a significant expansion in fixed financial obligations during this period.
- Fixed charge coverage ratio
- The coverage ratio demonstrates a strong inverse correlation with the rise in fixed charges. After peaking at 6.03 in 2018, the ratio declined sharply to 2.56 in 2019 and reached a low of 2.28 in 2020. This indicates a reduced margin of safety for meeting fixed obligations. However, a recovery is observed in 2021, with the ratio improving to 3.06, driven by the substantial increase in earnings relative to a slight decrease in fixed charges.
Overall, the data indicates that the company successfully managed a period of increased financial leverage. The recovery in the fixed charge coverage ratio in 2021 suggests that operational earnings growth is beginning to outpace the elevated fixed costs incurred in previous years.
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