Fiserv Inc. (NASDAQ:FISV)

The analysis of the financial ratios over the five-year period reveals several notable trends relating to asset utilization and efficiency metrics.

Net Fixed Asset Turnover

This ratio remained relatively stable and high in 2017 and 2018 at approximately 14.6, indicating efficient use of fixed assets during these years. However, there was a sharp decline in 2019 to 6.34, followed by a gradual recovery to 9.12 in 2020 and a slight increase to 9.31 in 2021. This pattern suggests a disruption or change affecting fixed asset utilization beginning in 2019, which partially corrected in subsequent years but did not return to earlier levels.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The trend here mirrors the standard net fixed asset turnover but at lower values from 2019 onwards—dropping from 14.63 in 2018 to 4.45 in 2019, then increasing to 6.97 in 2020 and reaching 7.00 in 2021. The adjusted calculation that includes operating leases reflects a more conservative assessment of asset efficiency, confirming the decline and moderate recovery trend observed.

Total Asset Turnover

Total asset turnover exhibited a declining trend, starting at 0.55 in 2017 and reducing gradually to 0.21 by 2021. The largest drop occurred between 2018 and 2019 (from 0.52 to 0.13), indicating a significant decrease in the company’s ability to generate sales from its total asset base. Minimal improvement occurred after 2019, suggesting ongoing challenges in asset utilization at a broader level.

Equity Turnover

This ratio rose from 2.09 in 2017 to 2.54 in 2018, which suggests improved sales generation relative to shareholders’ equity. However, a sharp decrease followed in 2019 to 0.31, with only a modest recovery to 0.52 by 2021. This decline corresponds with the drop in asset turnover ratios, illustrating a period of reduced efficiency in generating revenue from equity investment.

Overall, the data indicates that the company experienced a substantial decline in operational efficiency around 2019, affecting several key turnover measures. While there is evidence of recovery commencing in 2020, the ratios have not returned to the higher efficiency levels seen prior to 2019. This pattern may reflect external market conditions, strategic changes, or asset base alterations that impacted the effective utilization of both fixed and total assets as well as equity.

Revenue

Revenue displays a consistent upward trend over the observed periods. Starting at 5,696 million US dollars in 2017, it increased marginally to 5,823 million in 2018. A significant rise occurred in 2019, with revenue reaching 10,187 million, followed by continued growth to 14,852 million in 2020 and 16,226 million in 2021. This suggests robust business expansion and increasing sales over the five-year span.

Property and equipment, net

The net value of property and equipment remained relatively stable between 2017 and 2018, showing a slight increase from 390 million to 398 million US dollars. However, there was a substantial rise in 2019 to 1,606 million, which then continued to increase moderately through 2020 and 2021, reaching 1,628 million and 1,742 million, respectively. This pattern indicates significant investments or acquisitions related to property and equipment starting in 2019, followed by steady capital expenditure or asset appreciation in subsequent years.

Net fixed asset turnover

Net fixed asset turnover, defined as the ratio of revenue to net fixed assets, shows a contrasting trend. Between 2017 and 2018, the ratio remained stable around 14.6. However, it decreased sharply in 2019 to 6.34, likely due to the substantial increase in property and equipment during the same period. The ratio then improved to 9.12 in 2020 and 9.31 in 2021 but did not return to the earlier higher levels. This suggests that although revenue increased notably, the growth in fixed assets outpaced revenue growth in 2019, leading to lower efficiency in asset utilization followed by gradual improvement.

Revenue Trend

The revenue demonstrates a significant upward trend over the observed period. Starting at $5,696 million in 2017, it slightly increased to $5,823 million in 2018, followed by a substantial jump to $10,187 million in 2019. This growth accelerated in subsequent years, reaching $14,852 million in 2020 and $16,226 million in 2021. The data indicates strong revenue growth, particularly from 2018 onwards.

Property and Equipment, Net

The value of property and equipment, including operating lease right-of-use assets, displays notable changes. The figure remained relatively stable at $390 million in 2017 and $398 million in 2018, then surged significantly to $2,290 million in 2019. This level slightly decreased to $2,132 million in 2020 but increased again to $2,317 million in 2021. The sharp increase in 2019 suggests major investments or acquisitions related to fixed assets or lease rights during that year.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, which measures revenue generated per dollar of fixed assets, exhibits a declining trend initially, dropping from approximately 14.61 in 2017 and 14.63 in 2018 to 4.45 in 2019. This decline aligns with the large increase in fixed assets. However, from 2019 onwards, the ratio improves to 6.97 in 2020 and slightly increases to 7.00 in 2021. This partial recovery suggests improved asset utilization efficiency after the asset base expanded.

Summary Insights

The company experienced robust revenue growth alongside a substantial increase in fixed assets starting in 2019. This asset growth likely reflects strategic investments or acquisitions intended to support expanding operations. Initially, the surge in assets caused a drop in asset turnover efficiency, but the ratio improved over the following two years, indicating adaptations that enhanced asset productivity. Overall, the data points to a phase of aggressive growth supported by considerable capital investment, followed by efforts to optimize asset use.

The financial data presents notable trends and shifts over the period from 2017 to 2021. Revenue demonstrates a consistent upward trajectory, with a moderate increase between 2017 and 2018, followed by a significant jump in 2019, and continued growth through 2020 and 2021. This indicates robust top-line expansion, effectively more than doubling from 2017 to 2021.

Total assets present a different pattern, characterized by stability in the early years and a sharp increase in 2019, rising substantially from approximately $11.3 billion in 2018 to over $77 billion in 2019. After this spike, total assets slightly decreased in 2020 and then showed a marginal increase in 2021. This abrupt change could be indicative of substantial acquisitions, asset revaluations, or other significant balance sheet events impacting the asset base.

Total asset turnover, which measures the efficiency of asset use in generating revenue, reflects an inverse trend compared to revenue before 2019, with a slight decline from 0.55 in 2017 to 0.52 in 2018, and then dropping sharply to 0.13 in 2019. This decline correlates with the large increase in total assets, which outpaced revenue growth, resulting in a lower turnover ratio. However, from 2019 onwards, total asset turnover shows moderate improvement, rising to 0.20 in 2020 and 0.21 in 2021, suggesting some recovery in asset utilization effectiveness despite the larger asset base.

Revenue

Demonstrated consistent growth, particularly strong between 2018 and 2019, continuing through 2021.

Total assets

Remained stable initially, surged dramatically in 2019, then slightly decreased in 2020 and increased marginally in 2021.

Total asset turnover

Declined significantly in 2019 due to the asset base expansion, with gradual improvement from 2020 onwards.

Overall, the data suggest aggressive expansion or investment activity around 2019, accompanied by initially reduced asset efficiency that has begun to improve in subsequent years. Continued revenue growth alongside gradual recovery in asset turnover points toward efforts in leveraging the expanded asset base more effectively.

The financial data for the analyzed periods indicate notable shifts in revenue, shareholders' equity, and equity turnover ratios.

Revenue

The revenue showed a consistent upward trend over the five-year period. Starting at 5,696 million USD in 2017, it experienced moderate growth in 2018 to 5,823 million USD. Thereafter, a significant increase occurred in 2019, reaching 10,187 million USD, followed by continued growth in 2020 and 2021 with revenues of 14,852 million USD and 16,226 million USD, respectively. This reflects strong sales expansion and possibly strategic business growth or acquisitions.

Total Shareholders’ Equity

The shareholders’ equity demonstrated considerable volatility, particularly between 2018 and 2019. It decreased slightly from 2,731 million USD in 2017 to 2,293 million USD in 2018. However, there was a dramatic increase in 2019, with equity rising sharply to 32,979 million USD, remaining relatively stable but slightly declining in the following years with levels of 32,330 million USD in 2020 and 30,952 million USD in 2021. This large jump in 2019 likely indicates a significant capital event, such as an acquisition, recapitalization, or other equity transactions.

Equity Turnover Ratio

The equity turnover ratio, calculated as the ratio of revenue to shareholders’ equity, declined substantially from 2017 through 2019. It started at 2.09 in 2017 and rose to 2.54 in 2018, indicating relatively efficient use of equity to generate revenue during these years. From 2019 onward, the ratio sharply dropped to 0.31 and remained low but showed a slight improvement to 0.46 in 2020 and 0.52 in 2021. The decline corresponds with the significant increase in equity, suggesting that while the company’s equity base expanded rapidly, revenue growth was not proportional, resulting in lower equity turnover efficiency.

In summary, the data reveals rapid growth in revenue accompanied by an extraordinary increase in shareholders’ equity in 2019. The subsequent decline in equity turnover ratio highlights a dilution in the efficiency of equity usage relative to revenue generation. This pattern may point to transformative corporate actions during the period, potentially impacting financial structure and performance metrics.