Etsy Inc. (NASDAQ:ETSY)

The financial data reveals several important trends over the five-year period from 2017 to 2021. The total asset turnover ratios, both reported and adjusted, generally exhibit a decline from 2017 through 2019, dropping from approximately 0.7 to around 0.53. However, this metric recovers in 2020 before declining again in 2021, indicating variability in asset utilization efficiency.

The current ratio, which measures short-term liquidity, shows a peak in 2018 with values above 6, then declines steadily each subsequent year to reach near 2.2 by the end of 2021. This downward trend suggests a weakening in liquidity or a reduction in current assets relative to current liabilities over time.

Leverage ratios depict notable changes. The debt to equity ratio increases markedly, from a low of 0.18 in 2017 to a high of 3.8 in 2021, approximately a twentyfold increase, signaling a significant rise in reliance on debt financing relative to equity. The debt to capital ratio follows a similar upward trend, growing from 0.15 to 0.79 over the period, reinforcing this observation. Financial leverage ratios also increase substantially, more than tripling from about 1.5 in 2017 to above 6 in 2021, indicating growing use of debt to amplify returns.

The net profit margin displays an irregular pattern. The reported figures decrease from 18.54% in 2017 to around 11.7% in 2019, then increase sharply in 2020 and 2021, peaking above 21%. Adjusted net profit margin discrepancies early on display a markedly lower margin in 2017, but also show a similarly strong increase by 2020, followed by a decline in 2021.

Return on equity (ROE) experiences a significant upward trajectory. Reported ROE remains relatively stable from 2017 through 2019 (ranging roughly from 19% to 24%), then surges dramatically in 2020 and 2021, reaching nearly 79%. Adjusted ROE follows the same rising trend, increasing more than tenfold from 3.39% in 2017 to over 51% in 2021. This sharp increase aligns with the rising financial leverage, suggesting amplified returns on shareholder equity possibly driven by increased debt usage.

Return on assets (ROA) shows a decreasing trend from 2017 to 2019, declining from about 13.5% to just over 6%, but it then rises again in 2020 before dropping slightly in 2021. Adjusted ROA remains considerably lower than reported in earlier years but increases in 2020 before declining again in 2021. These fluctuations indicate variability in asset profitability that does not follow the same pronounced increase seen in ROE, consistent with higher leverage impacting equity returns disproportionately to asset returns.

In summary, the data illustrates a company increasingly leveraging debt over time, which amplifies returns on equity but also introduces greater financial risk, as reflected in the rising debt ratios and financial leverage. The declining current ratio suggests a reduction in liquidity cushion. Asset efficiency as measured by asset turnover exhibits some volatility without a clear improving trend. Profitability metrics such as net profit margin and ROE show strong improvement post-2019, likely influenced by increased leverage and potentially other operational factors.

Total Asset Turnover

Declined from 2017 to 2019, rebounded in 2020, then decreased in 2021.

Current Ratio

Peaked in 2018, then steadily decreased through 2021, indicating reduced liquidity.

Debt to Equity and Debt to Capital Ratios

Increased significantly from 2017 to 2021, highlighting increased debt reliance.

Financial Leverage

Rose substantially, more than tripling over the five years.

Net Profit Margin

Fell initially, then increased sharply in 2020 and 2021, with some volatility in adjusted figures.

Return on Equity (ROE)

Remained moderate until 2019, then surged notably in 2020 and 2021, correlated with increased leverage.

Return on Assets (ROA)

Declined early in the period, increased in 2020, then showed slight decline in 2021.

Revenue Trends

The revenue exhibited a consistent and robust growth across the five-year period. Starting at approximately 441 million US dollars in 2017, it increased steadily each year, reaching over 2.3 billion US dollars by the end of 2021. This indicates a significant expansion in the company's sales or service activities.

Total Assets Growth

Total assets showed a strong upward trend as well, rising from about 606 million US dollars in 2017 to nearly 3.8 billion US dollars in 2021. This substantial increase suggests ongoing investments in assets, which could be attributed to business expansion, acquisitions, or capital expenditures.

Reported Total Asset Turnover

The reported total asset turnover ratio fluctuated during the period. It began at 0.73 in 2017, declined to 0.53 by 2019, then rose again to 0.72 in 2020 before decreasing to 0.61 in 2021. These variations imply changes in how efficiently the company utilized its assets to generate revenue, with 2019 being a low point for asset efficiency and a partial recovery observed in 2020 followed by a slight decline in 2021.

Adjusted Revenue and Assets

Adjusted figures mirrored the reported financials closely, showing consistent revenue and asset growth. Adjusted revenue rose from about 442 million in 2017 to over 2.3 billion in 2021, while adjusted total assets increased from approximately 626 million to 3.7 billion over the same period.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio demonstrated a pattern similar to the reported ratio, moving from 0.71 in 2017 down to 0.53 in 2019, rebounding to 0.72 in 2020, and finally settling at 0.62 in 2021. This consistency suggests that adjustments made to revenues and assets did not materially alter the interpretation of asset utilization efficiency.

General Insights

Overall, the data indicates strong revenue growth accompanied by significant asset accumulation. However, the asset turnover ratios reveal variability in asset efficiency, with a notable decrease by 2019 and partial recovery thereafter. This pattern may reflect changes in business strategy, market conditions, or capital investment timing that affected operational efficiency in generating revenue from assets.

The financial data indicates fluctuations in both current assets and current liabilities over the five-year period ending December 31, 2021.

Current Assets

Current assets demonstrate a general upward trend from 2017 through 2020, increasing from approximately 439 million USD to nearly 1.9 billion USD. However, in 2021, there is a noticeable decline to about 1.34 billion USD, indicating a reduction in liquidity or asset base in the most recent year.

Current Liabilities

Current liabilities have consistently increased each year, starting from roughly 102 million USD in 2017 and reaching over 615 million USD by the end of 2021. This shows a continuous rise in short-term obligations, with a marked acceleration after 2018.

Reported Current Ratio

The reported current ratio reflects the company’s ability to meet short-term obligations and moves in a downward trajectory overall. It peaks at 6.07 in 2018, followed by gradual decreases each year to 2.18 in 2021. This decline suggests a weakening short-term liquidity position, despite current assets remaining substantially higher than liabilities.

Adjusted Current Assets and Liabilities

The adjusted current assets and liabilities, which may consider more refined or normalized values, follow a similar pattern to the reported figures. Adjusted current assets rise from 442 million USD to over 1.9 billion USD by 2020, then decrease to about 1.35 billion USD in 2021. Adjusted current liabilities also steadily increase, from 96 million USD in 2017 to just above 603 million USD in 2021.

Adjusted Current Ratio

The adjusted current ratio mirrors the trend found in the reported ratio. It rises to a high of 6.55 in 2018, then declines to 2.24 by 2021. This consistent decrease points to a relative increase in liabilities compared to assets when adjustments are considered, reinforcing the indication of reduced liquidity strength in the latest year assessed.

Overall, the data reflects a period of expansion in current assets and liabilities until 2020, followed by a contraction in assets and continued growth in liabilities in 2021. The decreasing current ratios, both reported and adjusted, imply a diminishing margin of safety in covering short-term obligations, which may warrant closer monitoring of liquidity management going forward.

Total Debt

The total debt has shown a consistent and substantial increase over the five-year period. Starting at approximately 70 million USD in 2017, it escalated sharply to about 2.39 billion USD by the end of 2021. This represents a more than 34-fold increase, indicating a significant rise in the company's leverage and borrowing activity.

Stockholders' Equity

Stockholders’ equity exhibited modest growth from 2017 to 2019, increasing slightly from 397 million USD to around 407 million USD. A significant jump was observed in 2020, reaching approximately 742 million USD. However, in 2021, equity declined to roughly 629 million USD, suggesting a reduction following the peak in the prior year.

Reported Debt to Equity Ratio

The debt to equity ratio follows a clear upward trend, reflecting increasing leverage. It rose steadily from 0.18 in 2017 to 0.85 in 2018, then more than doubled to 2.08 in 2019. The ratio decreased slightly to 1.5 in 2020 but surged dramatically to 3.8 in 2021. This indicates that debt has grown at a much faster pace compared to equity, especially in the final year.

Adjusted Total Debt

The adjusted total debt data parallels the trend of reported total debt, confirming the consistent increase in leverage. Adjusted debt values are generally higher than reported debt, starting at about 88 million USD in 2017 and expanding to nearly 2.44 billion USD in 2021. This adjustment further underscores the increasing obligations of the company.

Adjusted Stockholders' Equity

Adjusted stockholders' equity shows a similar pattern to the reported equity, with slight increases initially, a significant peak in 2020, followed by a decline in 2021. It increased from approximately 429 million USD in 2017 to 822 million USD in 2020, then decreased to 632 million USD in 2021.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio trends closely mirror the reported ratios, reinforcing the analysis of rising leverage. The ratio increased from 0.21 in 2017 to 0.87 in 2018, declined somewhat to 1.38 in 2020 after a peak of 1.86 in 2019, and surged significantly to 3.85 in 2021. This indicates that the company's capital structure has shifted considerably toward debt financing in the most recent year.

The financial data exhibits significant changes in the company's debt and capital structure over the analyzed five-year period. The trends suggest an increasing reliance on debt financing with notable fluctuations in key leverage ratios.

Total Debt

Total debt increased substantially from 69,962 thousand USD in 2017 to 2,388,119 thousand USD in 2021. The most pronounced growth occurred between 2020 and 2021, where the debt more than doubled, indicating a considerable expansion in borrowings.

Total Capital

Total capital also grew consistently from 466,856 thousand USD in 2017 to 3,016,738 thousand USD in 2021. The increase appears steady over the years, reflecting an overall expansion in the company’s financing base, including both debt and equity.

Reported Debt to Capital Ratio

The reported debt to capital ratio rose from a low level of 0.15 in 2017 to 0.79 in 2021. The ratio increased sharply between 2017 and 2019, suggesting a rapid rise in debt relative to total capital. After a slight decline in 2020 to 0.60, the ratio surged again in 2021, reaching its highest point for the period.

Adjusted Total Debt

The adjusted total debt figures, which may reflect additional debt considerations, follow a pattern similar to reported total debt. They increased from 88,048 thousand USD in 2017 to 2,435,883 thousand USD in 2021, showing consistent growth with a sharp increase in the final year.

Adjusted Total Capital

Adjusted total capital rose from 517,518 thousand USD in 2017 to 3,068,192 thousand USD in 2021, showing a strong upward trend consistent with reported total capital values. The growth in adjusted capital supports the interpretation of an expanding financing base.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio trends closely resemble the reported ratio, starting at 0.17 in 2017 and rising to 0.79 in 2021. The ratio peaked in 2019 (0.65), decreased in 2020 (0.58), and then sharply increased again, reaching 0.79 in 2021, indicating heightened leverage and possibly increased financial risk in the latter period.

Overall, the data indicates a clear upward trend in debt levels relative to capital, reflecting a strategic shift towards greater leverage. The peak ratios in 2021 highlight a potential increase in financial risk, which may warrant closer monitoring of the company's debt management and capital structure going forward.

Total Assets

Total assets demonstrated a consistent and significant increase over the period. Starting at approximately 606 million USD in 2017, the value rose to around 3.83 billion USD by the end of 2021. This represents a more than sixfold increase, signaling strong expansion or asset accumulation activities.

Stockholders’ Equity

Stockholders’ equity showed moderate growth from 2017 to 2019, increasing from roughly 397 million USD to about 407 million USD. A substantial rise occurred in 2020, where equity nearly doubled to 742 million USD, followed by a decrease in 2021 to approximately 629 million USD. This fluctuation suggests significant changes in equity financing or retained earnings during 2020 and 2021.

Reported Financial Leverage

Reported financial leverage increased notably over the five-year span. Starting at 1.53 in 2017, the ratio escalated to 6.1 by 2021, reflecting a growing reliance on debt relative to equity. The leverage peaked sharply in 2021, indicating potentially heightened financial risk or increased use of borrowed capital.

Adjusted Total Assets

Adjusted total assets followed a similar growth trajectory as reported total assets, rising from approximately 626 million USD in 2017 to about 3.74 billion USD in 2021. The parallel trend suggests that adjustments made to asset valuations did not significantly alter the overall upward pattern of asset expansion.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity exhibited steady increases from 2017 through 2020, growing from roughly 429 million USD to over 820 million USD. However, in 2021, adjusted equity declined to approximately 632 million USD, mirroring the drop observed in reported equity. This decline could be indicative of asset revaluation, dividend payments, or other equity-reducing activities.

Adjusted Financial Leverage

Adjusted financial leverage showed rising tendencies similar to reported leverage but at a slightly lower magnitude. Beginning at 1.46 in 2017, it increased to about 5.92 in 2021. The ratio declined temporarily in 2020 before surging in 2021, suggesting changes in debt or equity adjustments impacting the leverage measure.

Revenue Trend

Revenue demonstrated consistent and significant growth over the five-year period. Starting at approximately $441 million in 2017, it increased steadily each year, reaching over $2.3 billion by 2021. The most notable jump occurred between 2019 and 2020, where revenue more than doubled, indicating a substantial expansion in sales or operational scale.

Net Income Trend

Net income displayed an upward trajectory with some fluctuations in the earlier years, starting at $81.8 million in 2017, dipping slightly in 2018 to $77.5 million, and then rising steadily to nearly $494 million by 2021. The pronounced increase in net income after 2019 suggests improved profitability or operational efficiency during this period.

Reported Net Profit Margin

The reported net profit margin exhibited variability in the initial years, declining from 18.54% in 2017 to around 11.7% in 2019. However, it recovered significantly in 2020 and 2021, reaching levels above 20%. This pattern suggests enhanced cost control or improved revenue quality contributing to higher profitability margins.

Adjusted Net Income and Revenue

Adjusted net income started comparatively low at $14.6 million in 2017 and experienced a substantial rise to $374.5 million by 2020, before declining to $322.6 million in 2021. Adjusted revenue mirrored the reported revenue closely, with steady growth across the period, reinforcing the overall positive financial performance trajectory.

Adjusted Net Profit Margin

The adjusted net profit margin displayed a marked increase from 3.29% in 2017 to 21.65% in 2020, indicating improved profitability when considering adjustments. However, the margin decreased notably to 13.85% in 2021, suggesting that non-operating factors or one-time adjustments may have influenced profitability in that year.

Overall Insights

The data depicts a company experiencing rapid growth in revenue, particularly notable in the 2019-2020 period. Profitability, as reflected in both reported and adjusted measures, improved significantly over time with some fluctuations, especially in adjusted net income and margins in 2021. The strong increase in reported net profit margin in the last two years points to effective management of costs and operations, although the decline in adjusted margins in 2021 may warrant closer analysis of exceptional items or operational changes during that year.

Net Income

Net income exhibited a mostly increasing trend from 2017 through 2021. Starting at 81,800 thousand USD in 2017, earnings dipped slightly to 77,491 thousand USD in 2018 before rising steadily to 95,894 thousand USD in 2019. A significant jump occurred in 2020 to 349,246 thousand USD, followed by further growth to 493,507 thousand USD in 2021. This pattern reflects accelerated profitability in the latter years.

Stockholders’ Equity

Stockholders’ equity rose gradually from 396,894 thousand USD in 2017 to 406,634 thousand USD in 2019. A marked increase took place in 2020, reaching 742,424 thousand USD. However, in 2021, equity decreased to 628,619 thousand USD. The sharp increase in 2020 could suggest capital infusions or retained earnings growth, while the decline in 2021 may indicate distributions, losses, or other equity adjustments.

Reported Return on Equity (ROE)

The reported ROE showed a declining trend from 20.61% in 2017 to 19.33% in 2018, then increased to 23.58% in 2019. A notable rise occurred from 2020 onward, reaching 47.04% and further intensifying to 78.51% in 2021. This indicates that the company became significantly more efficient in generating profit from its equity base during these years, despite the fluctuation in absolute equity values.

Adjusted Net Income

Adjusted net income started low at 14,558 thousand USD in 2017 but showed continuous growth through 2018 and 2019, reaching 82,774 thousand USD. There was an exceptional increase in 2020 to 374,468 thousand USD, followed by a slight decrease to 322,638 thousand USD in 2021. This adjusted measure mirrors the net income trend but highlights fluctuations likely related to non-recurring or exceptional items adjusted out of net income.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity declined slightly from 429,470 thousand USD in 2017 to 420,087 thousand USD in 2018, then increased to 469,524 thousand USD in 2019. A more significant rise was observed in 2020 to 821,811 thousand USD, followed by a decrease to 632,309 thousand USD in 2021. This pattern is consistent with that of the reported equity figures, indicating similar underlying adjustments affecting equity values.

Adjusted Return on Equity (ROE)

The adjusted ROE was relatively low at 3.39% in 2017 but rose steadily to 13.37% in 2018 and 17.63% in 2019. A substantial increase occurred in 2020, reaching 45.57%, with a subsequent rise to 51.03% in 2021. Despite a dip in adjusted net income in 2021, adjusted ROE remained high, suggesting ongoing strong profitability relative to the equity base after adjustments.

Net Income Trends

Net income demonstrated an overall upward trajectory from 2017 to 2021. Starting at 81.8 million USD in 2017, it slightly declined to 77.5 million USD in 2018, then rose moderately to 95.9 million USD in 2019. A significant surge was observed in 2020, reaching 349.2 million USD, followed by further growth to 493.5 million USD in 2021. This indicates strong profitability improvement particularly from 2019 onwards.

Total Assets Development

Total assets showed substantial growth over the period analyzed. From 605.6 million USD at the end of 2017, assets increased consistently each year, culminating in 3.83 billion USD by the end of 2021. The most pronounced growth occurred between 2019 and 2021, reflecting possible expansion or increased investment activity during this period.

Reported Return on Assets (ROA) Analysis

The reported ROA initially declined from 13.51% in 2017 to 6.22% in 2019, suggesting decreasing efficiency in asset utilization during those years. However, it rebounded sharply to 14.52% in 2020, before slightly tapering to 12.88% in 2021. The fluctuations indicate variations in profitability relative to asset base, with notable improvement post-2019.

Adjusted Net Income Variations

Adjusted net income, which likely excludes certain non-recurring items, showed a markedly different pattern compared to reported net income. It started significantly lower at 14.6 million USD in 2017, before increasing steadily through to 82.8 million USD in 2019. A sharp increase occurred in 2020 reaching 374.5 million USD, followed by a decrease to 322.6 million USD in 2021. This pattern suggests adjustments had a significant impact and that 2020 was an exceptional year in terms of profitability.

Adjusted Total Assets Movement

The adjusted total assets followed a growth trend similar to the reported total assets, rising from 626.2 million USD in 2017 to 3.74 billion USD in 2021. This consistent increase supports the observation of asset base expansion throughout the period, with a slight deviation from the reported assets but maintaining overall directional alignment.

Adjusted ROA Insights

Adjusted ROA started very low at 2.32% in 2017 but increased to 6.19% in 2018 before declining slightly to 5.4% in 2019. It then experienced a sharp rise to 15.51% in 2020, followed by a decrease to 8.62% in 2021. This volatility indicates adjusted profitability relative to assets was initially weak but improved significantly in 2020, although it did not sustain the peak level in the following year.