Fiserv Inc. (NASDAQ:FISV)

Debt to Equity Ratio

The debt to equity ratio showed an overall upward trend from March 2018 through June 2019, increasing from 1.55 to a peak of 5.4, indicating a substantial rise in leverage relative to shareholder equity during this period. However, starting in September 2019, the ratio experienced a sharp decrease to levels around 0.66 to 0.69, and this more conservative leverage position was maintained consistently through March 2022.

Debt to Capital Ratio

This ratio followed a similar pattern to the debt to equity ratio. Initially, there was an increase from 0.61 in March 2018 to 0.84 by June 2019, reflecting higher reliance on debt financing within total capital structure. Afterward, a significant reduction occurred in September 2019 down to about 0.40, and the ratio stabilized near this value for the subsequent periods, indicating a more balanced capital structure with lower debt proportion.

Debt to Assets Ratio

The debt to assets ratio also increased from 0.45 at the start of the period to a peak of 0.70 by June 2019, implying greater leverage with respect to the asset base. Subsequently, the ratio declined sharply to approximately 0.28 by September 2019 and remained relatively stable around that level through the end of the observation period. This trend suggests an improvement in asset funding structure with reduced debt utilization.

Financial Leverage Ratio

Financial leverage showed an upward trajectory from 3.42 in March 2018 to a high of 7.71 in June 2019, indicating increased asset coverage by equity, likely due to the rise in debt levels. From September 2019 onward, financial leverage decreased significantly to values near 2.3–2.5 and remained steady, reflecting a less aggressive use of debt and more stable equity base supporting assets.

Total Debt

Total debt increased steadily from US$4,604 million at the end of Q1 2018 to US$5,959 million by Q4 2018. A significant jump occurred in Q2 and Q3 2019, rising sharply to US$13,756 million and US$22,491 million respectively, before slightly declining and stabilizing around US$21,000 to US$22,000 million through Q4 2021 to Q1 2022.

Total Shareholders' Equity

Shareholders' equity decreased from US$2,971 million in Q1 2018 to a low of US$2,293 million by Q4 2018. Subsequently, equity showed a substantial increase, rising dramatically to US$32,669 million in Q3 2019 and maintaining a similar level just below US$33,000 million in Q4 2019. From Q1 2020 through Q1 2022, equity remained relatively stable, fluctuating slightly around US$31,000 to US$32,000 million, with a mild downward trend toward US$31,272 million by Q1 2022.

Debt to Equity Ratio

The debt to equity ratio exhibited a rising trend initially, from 1.55 in Q1 2018 to 2.6 in Q4 2018. A peak was observed in mid-2019, reaching as high as 5.4 in Q2 2019, likely reflecting the large increase in debt prior to the surge in equity. From Q3 2019 onwards, the ratio dropped significantly to around 0.7 and remained stable over the subsequent quarters, staying between 0.64 and 0.69 through Q1 2022, indicating a more balanced capital structure after mid-2019.

Overall Analysis

The financials indicate a major restructuring or transaction in mid-2019, evidenced by the dramatic increases in both debt and equity. This event caused a temporary spike in the debt-to-equity ratio, reflecting an initial surge in leverage, which was quickly balanced by an increase in equity by Q3 2019. Since then, the company has maintained a relatively stable debt-to-equity ratio below 0.7, suggesting disciplined management of debt levels in relation to equity. The gradual decline in shareholders' equity after 2019 may warrant monitoring to assess future financial stability.

The financial review focuses on the debt structure and capital composition over the examined quarterly periods. The analysis covers the trends in total debt, total capital, and the debt-to-capital ratio to provide insights into the company's leverage and financial stability.

Total Debt

Total debt initially showed a gradual increase from 4,604 million USD at the end of Q1 2018 to a peak of 21,899 million USD in Q4 2019. This considerable rise, particularly between Q1 2019 and Q4 2019, suggests substantial borrowing or debt accumulation during this phase. After reaching its peak, total debt slightly declined and then stabilized around the range of 20,600 to 21,200 million USD from Q1 2020 through Q1 2022, indicating controlled debt levels following the rapid expansion.

Total Capital

Total capital followed a somewhat similar pattern, with a steady increase from 7,575 million USD in Q1 2018 to a significant surge reaching 55,160 million USD by Q3 2019. This spike aligns with the rise seen in total debt, implying a large increase in the capital base, likely tied to financing activities or restructuring events. Subsequently, total capital slightly contracted and then remained relatively stable around the 52,000 to 53,000 million USD mark from Q4 2019 through Q1 2022, mirroring the post-peak stabilization observed in total debt.

Debt to Capital Ratio

The debt-to-capital ratio was 0.61 at the start of the period but rose steadily to reach 0.84 by Q2 2019, reflecting a growing reliance on debt financing relative to the capital base. Interestingly, a sharp decline occurred in Q3 2019 when the ratio dropped drastically to approximately 0.41, coinciding with the large increase in total capital that outpaced the growth in debt. From Q3 2019 onwards, the ratio stabilized around 0.40 to 0.41, indicating a balanced leverage position maintained through Q1 2022.

Overall, the company experienced a significant increase in both total debt and capital between early 2018 and late 2019, followed by a phase of stabilized leverage. The sharp reduction in the debt-to-capital ratio in mid-2019 suggests a notable capital structure shift, possibly due to capital raises or debt refinancing, resulting in a lower relative debt burden. The subsequent stability in debt, capital, and leverage ratio indicates a consistent financial strategy with controlled risk levels during the most recent quarters observed.

Total Debt

The total debt exhibits a significant increase from early 2018 through 2019, rising from approximately 4.6 billion USD in the first quarter of 2018 to a peak of around 22.5 billion USD in the third quarter of 2019. Following this peak, debt levels stabilize and subsequently gradually decrease, maintaining a range between roughly 20.6 billion USD and 21.2 billion USD from the first quarter of 2020 to the first quarter of 2022.

Total Assets

Total assets demonstrate a generally upward trajectory from early 2018 through mid-2019, increasing from about 10.2 billion USD to nearly 19.6 billion USD in the second quarter of 2019. However, there is a sharp and large-scale increase in assets in the third quarter of 2019, reaching over 77.8 billion USD, which then remains relatively stable with minor fluctuations through the first quarter of 2022. This jump in assets corresponds with the same period when total debt peaked, suggesting a major corporate event impacting the balance sheet.

Debt to Assets Ratio

The debt to assets ratio rises consistently from 0.45 at the start of 2018 to 0.7 in mid-2019, a reflection of debt growing faster than assets. This ratio then dramatically decreases to approximately 0.29 by late 2019 and remains steady around 0.28 through early 2022. The sharp decline in the ratio corresponds with the substantial increase in total assets during the same period, indicating a significant improvement in the company's leverage position following the major shift in asset levels.

Summary of Trends

Overall, the data reveals a period of rapid growth in debt and assets culminating in the third quarter of 2019, likely indicative of a major acquisition or financial restructuring. Post this event, the company maintains a more balanced and stable debt to assets ratio, reflecting a controlled leverage strategy despite relatively high absolute levels of debt. The steady asset base combined with moderate deleveraging suggests a focus on maintaining financial stability and capital structure optimization in the recent periods.

The analysis of the provided quarterly financial data reveals several noteworthy trends in Fiserv Inc.’s balance sheet components over the period from March 2018 through March 2022.

Total Assets

Total assets demonstrated a generally increasing trend from March 2018, starting at approximately $10.2 billion, rising steadily through 2018 and early 2019. A significant jump occurred in mid-2019, peaking at over $77 billion during the third quarter of 2019. After this peak, total assets fluctuated moderately around the $72 billion to $77 billion range through the end of 2021 and into early 2022, ending slightly lower at around $75.5 billion as of March 2022.

Total Shareholders’ Equity

Shareholders' equity initially declined from $2.97 billion in the first quarter of 2018 to approximately $2.3 billion by December 2018. From early 2019, equity increased sharply alongside total assets, reaching an unprecedented high near $32.7 billion in the third quarter of 2019, corresponding with the spike in total assets. Subsequently, equity levels stabilized at roughly $31 billion to $32 billion through 2020 and 2021 but displayed a slight downward trend towards the end of the period, finishing near $31.3 billion in the first quarter of 2022.

Financial Leverage

Financial leverage ratios started relatively high, around 3.4 in early 2018, then climbed to a peak near 4.9 by the end of 2018. A dramatic reduction followed in 2019, with leverage dropping to approximately 2.4 where it remained fairly stable, even lower than initial levels, throughout subsequent quarters. This decline aligns with the significant increase in shareholders' equity relative to total assets during that period, suggesting a capital structure shift likely initiated by an equity infusion or acquisition financing.

Overall, the financial data reflects a major transformation in the company’s scale and capital structure around mid to late 2019, evidenced by a fivefold increase in total assets and a more than tenfold rise in shareholders' equity. Following this transformation, the company maintained a consistent and conservative leverage ratio close to 2.4, indicating prudent financial management post-expansion. The moderate fluctuations in total assets and equity post-2019 suggest a stabilization period after the significant growth phase.