Analysis of Investments
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- Income Statement
- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2008
- Current Ratio since 2008
- Price to Book Value (P/BV) since 2008
- Analysis of Debt
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Visa Inc., adjustment to net income
US$ in millions
| 12 months ended: | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | |
|---|---|---|---|---|---|---|---|
| Net income (as reported) | |||||||
| Add: Investment securities | |||||||
| Net income (adjusted) |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
- Net Income Trends
- Reported net income exhibited a generally upward trajectory over the six-year period analyzed. Starting at 6,699 million US dollars in 2017, it increased significantly to 10,301 million in 2018 and continued to rise to 12,080 million in 2019. A minor decline was observed in 2020, where net income decreased to 10,866 million, potentially influenced by economic conditions impacting that fiscal year. Following this dip, net income rebounded to 12,311 million in 2021 and achieved the highest level of 14,957 million in 2022.
- Adjusted Net Income Patterns
- The adjusted net income closely followed the trend of reported net income with only minor variations in values. It began at 6,736 million in 2017, rose to 10,211 million in 2018, and then increased further to 12,096 million in 2019. Similar to reported net income, adjusted net income fell slightly in 2020 to 10,865 million, before increasing again to 12,307 million in 2021 and reaching 14,852 million in 2022. The minimal difference between reported and adjusted net income suggests relatively small adjustments were made for non-recurring items or other accounting adjustments in this period.
- Comparative Insights
- Both reported and adjusted net income demonstrate consistent growth with a notable exception in 2020, which saw a decline possibly due to external economic disruptions. Recovery post-2020 is strong, with both metrics surpassing prior peak levels by 2022. The alignment of reported and adjusted figures indicates stable earnings quality and limited impact from extraordinary items or accounting adjustments over the period.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Visa Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
- Net Profit Margin
- The net profit margin exhibited a generally upward trend from 2017 to 2022. Reported figures increased significantly from 36.49% in 2017 to over 50% in subsequent years, peaking at 52.57% in 2019 before stabilizing around 51% in 2021 and 2022. Adjusted margins mirrored this pattern closely, indicating consistent profitability after adjustments. The steady margins above 49% from 2018 onwards suggest strong operational efficiency and sustained profitability.
- Return on Equity (ROE)
- ROE showed marked growth over the period, starting at approximately 20.45% in 2017 and climbing to an elevated level of 42.04% in 2022 for the reported measure. Adjusted ROE values followed a similar trajectory. While there was a slight dip in 2020 to around 30%, a robust recovery and growth occurred by 2022. This trend reflects an increasing ability to generate profits from shareholder equity, signaling enhanced capital efficiency and potentially favorable leverage or profit retention strategies.
- Return on Assets (ROA)
- ROA demonstrated a positive trend with reported values ascending from 9.85% in 2017 to 17.49% in 2022. Adjusted ROA values tracked closely, indicating that non-operating effects had minimal impact. After a dip in 2020 to approximately 13.43%, ROA rebounded, suggesting improved asset utilization or higher asset profitability in the latter years. The increase in ROA indicates better overall effectiveness in using assets to generate earnings.
- Overall Insights
- The financial ratios analyzed indicate a company with strong and improving profitability and efficiency metrics over the six-year period. Both reported and adjusted figures align closely, demonstrating consistency and reliability in reported data. The brief downturn in 2020 across ROE and ROA aligns with industry-wide challenges during that fiscal year but was followed by a swift recovery. The sustained high net profit margins combined with rising ROE and ROA imply strong operational performance and effective capital and asset management.
Visa Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
2022 Calculations
1 Net profit margin = 100 × Net income ÷ Net revenues
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenues
= 100 × ÷ =
The financial data over the six-year period reveals notable trends in net income and profit margins.
- Net Income
- Reported net income exhibits a consistent upward trajectory across the timeframe, increasing from 6,699 million US dollars in 2017 to 14,957 million US dollars in 2022. This represents more than a twofold growth during the six years. Adjusted net income follows a parallel pattern, rising from 6,736 million US dollars in 2017 to 14,852 million US dollars in 2022, reflecting a nearly identical pace of growth as the reported figures. Both metrics show a slight dip in 2020, likely attributable to external factors affecting that fiscal year, followed by a recovery and continuation of the growth trend in subsequent years.
- Net Profit Margin
- Reported net profit margin demonstrates an overall growth over the period, advancing from 36.49% in 2017 to approximately 51% in 2022. Growth is particularly marked from 2017 through 2019, with margins exceeding 50% repeatedly from 2019 onward, indicating strong profitability. Adjusted net profit margin trends mirror the reported margins closely, rising from 36.69% in 2017 to about 50.67% in 2022. Both margins exhibit a minor decline in 2020, consistent with the dip observed in net income, but maintain a high level of profitability thereafter.
Overall, the data indicates robust financial performance characterized by significant growth in net income and consistently high profit margins. The close alignment between reported and adjusted figures suggests limited impacts from non-recurring items or accounting adjustments on underlying profitability. The temporary setback observed in 2020 was followed by recovery, underscoring resilience in financial results.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
2022 Calculations
1 ROE = 100 × Net income ÷ Equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Equity
= 100 × ÷ =
The financial data reveals a consistent upward trend in both reported and adjusted net income from the fiscal year ending September 30, 2017, through September 30, 2022. The reported net income increased from approximately 6.7 billion US dollars in 2017 to nearly 15 billion US dollars in 2022, showing a substantial growth over the six-year period. Adjusted net income closely follows this pattern, with values slightly varying from the reported figures but maintaining a similar trajectory.
In terms of profitability as measured by return on equity (ROE), both reported and adjusted ROE exhibit a strong performance with notable fluctuations across the years. Starting at around 20.5% in 2017, ROE peaked in 2019 at approximately 34.8%, followed by a dip in 2020 to about 30%. The ROE then recovered and increased steadily, reaching over 42% by 2022. The adjusted ROE measures parallel these movements with minimal deviations, indicating that adjustments have a limited impact on reported profitability ratios.
- Net Income Trends
- There is a clear upward trajectory in net income figures, indicating growth in profitability and possibly operational efficiency or revenue increases. The consistent growth year-over-year suggests positive business momentum.
- Return on Equity (ROE)
- The ROE demonstrates strong and generally increasing profitability relative to shareholders' equity over the period analyzed. The peak in 2019 followed by a slight decline in 2020 could reflect external factors or investment impacts, but the recovery and eventual increase to above 40% highlight effective capital utilization.
- Comparison of Reported vs. Adjusted Figures
- The reported and adjusted figures are closely aligned, implying that adjustments made to net income and ROE do not significantly alter the overall financial performance picture. This consistency provides reliability to the financial metrics presented.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
2022 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
- Net Income Trends
- The reported net income demonstrates a consistent upward trend over the six-year period, increasing from 6,699 million USD in 2017 to 14,957 million USD in 2022. Similarly, the adjusted net income follows a comparable trajectory, rising from 6,736 million USD in 2017 to 14,852 million USD in 2022.
- The data shows a pronounced growth from 2017 through 2019, where net income increased substantially, peaking in 2019. In 2020, both reported and adjusted net income experienced a slight decline, which may be attributed to broader economic conditions during that period. Subsequently, income levels recover and escalate through 2021 and 2022, reaching their highest levels in the dataset.
- Return on Assets (ROA) Analysis
- The reported ROA exhibits an overall positive progression, moving from 9.85% in 2017 to 17.49% in 2022. This pattern aligns closely with that of adjusted ROA, which rises from 9.91% to 17.37% over the same time frame.
- Both ROA metrics peak in 2019 (16.65% reported, 16.67% adjusted) before decreasing in 2020, which mirrors the reduction noted in net income. The subsequent recovery and increase in ROA in 2021 and 2022 suggest improvements in asset utilization and operational efficiency, supporting stronger profitability despite any interim challenges.
- Comparative Observations
- The minimal gap between reported and adjusted figures across net income and ROA indicates a consistent and transparent reporting process, with adjustments having a limited effect on the overall financial performance depiction.
- The observed financial trends imply robust growth and resilience, with the company managing to improve profitability and asset efficiency over the reviewed years, notwithstanding the downturn in 2020.