Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Fiserv Inc., short-term (operating) activity 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 financial ratios indicate several notable trends over the five-year period.
- Receivables Turnover
-
The receivables turnover ratio experienced fluctuations, initially declining from 5.71 in 2017 to 3.66 in 2019, before recovering to 5.98 in 2020 and slightly decreasing to 5.67 in 2021. This suggests a temporary slowdown in the company's effectiveness at collecting receivables in 2019, followed by improvement in subsequent years.
- Payables Turnover
-
There is a clear downward trend in the payables turnover ratio, which decreased substantially from a high of 37.8 in 2017 to 13.71 in 2021. The significant drop indicates that the company has been taking longer to pay its suppliers, potentially reflecting changes in payment policies or cash management strategies.
- Working Capital Turnover
-
The working capital turnover demonstrated a sharp decline from an exceptionally high 153.95 in 2017 to 7.72 in 2019, followed by a partial recovery to 28.22 by 2021. This could imply that working capital efficiency diminished significantly around 2018-2019 but improved afterward, although it remained well below the initial level.
- Average Receivable Collection Period
-
This metric mirrored the changes seen in receivables turnover, rising from 64 days in 2017 to a peak of 100 days in 2019, then reverting to 61 days in 2020 and 64 days in 2021. The increase in 2019 indicates slower collection during that year, while the subsequent return to previous levels suggests improved collections timing.
- Average Payables Payment Period
-
The average payables payment period extended from 10 days in 2017 to 27 days in both 2019 and 2021. This growth aligns with the decreasing payables turnover ratio and indicates that the company consistently delayed payments to its suppliers over the years.
Overall, the data reveals fluctuations in the company's collection efficiency and working capital management, with a notable slowdown in receivables collection in 2019 and a persistent lengthening of payment periods to suppliers. The recovery in receivables turnover post-2019 suggests corrective measures or improved operational conditions, while the extended payable periods may reflect strategic cash flow management.
Turnover Ratios
Average No. Days
Receivables Turnover
Fiserv Inc., receivables turnover 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) | ||||||
| Revenue | 16,226) | 14,852) | 10,187) | 5,823) | 5,696) | |
| Trade accounts receivable, less allowance for doubtful accounts | 2,860) | 2,482) | 2,782) | 1,049) | 997) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 5.67 | 5.98 | 3.66 | 5.55 | 5.71 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Accenture PLC | 5.74 | 6.16 | 5.79 | — | — | |
| Adobe Inc. | 8.41 | 9.20 | 7.28 | — | — | |
| Cadence Design Systems Inc. | 8.85 | 7.93 | — | — | — | |
| CrowdStrike Holdings Inc. | 3.66 | 2.92 | — | — | — | |
| Fair Isaac Corp. | 4.22 | 3.87 | 3.90 | — | — | |
| International Business Machines Corp. | 8.49 | 10.32 | — | — | — | |
| Intuit Inc. | 24.64 | 51.54 | 77.98 | — | — | |
| Microsoft Corp. | 4.42 | 4.47 | 4.26 | — | — | |
| Oracle Corp. | 7.48 | 7.04 | — | — | — | |
| Palantir Technologies Inc. | 8.08 | 6.96 | — | — | — | |
| Palo Alto Networks Inc. | 3.43 | 3.29 | 4.98 | — | — | |
| Salesforce Inc. | 2.73 | 2.77 | — | — | — | |
| ServiceNow Inc. | 4.24 | 4.48 | — | — | — | |
| Synopsys Inc. | 7.40 | 4.72 | 6.07 | — | — | |
| Workday Inc. | 4.18 | 4.13 | — | — | — | |
| Receivables Turnover, Sector | ||||||
| Software & Services | 5.22 | 5.57 | — | — | — | |
| Receivables Turnover, Industry | ||||||
| Information Technology | 7.52 | 7.91 | — | — | — | |
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
Receivables turnover = Revenue ÷ Trade accounts receivable, less allowance for doubtful accounts
= 16,226 ÷ 2,860 = 5.67
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue increased steadily from 2017 through 2021. Starting at $5,696 million in 2017, revenue showed a modest growth to $5,823 million in 2018. A significant jump occurred in 2019, with revenue reaching $10,187 million, followed by further substantial increases in 2020 and 2021, culminating in $16,226 million. This pattern indicates accelerated business expansion during the latter years of the period.
- Trade Accounts Receivable
- The balance of trade accounts receivable, net of doubtful accounts, rose consistently over the five-year span. Beginning at $997 million in 2017, the receivables increased slightly to $1,049 million in 2018, then surged to $2,782 million in 2019. A mild decline to $2,482 million occurred in 2020, followed by another increase to $2,860 million in 2021. This suggests an overall growth in credit extended to customers, albeit with some fluctuation in 2020.
- Receivables Turnover Ratio
- The receivables turnover ratio exhibits variability throughout the period. It started at 5.71 in 2017 and decreased slightly to 5.55 in 2018. A notable dip to 3.66 occurred in 2019, indicating slower collection of receivables relative to sales during that year. The ratio rebounded strongly in 2020 to 5.98 and settled to 5.67 in 2021. This fluctuation suggests varying efficiency in collecting accounts receivable, with a temporary slowdown in 2019 but recovery afterward.
- Overall Analysis
- The data reveals robust revenue growth coinciding with increased trade accounts receivable, reflecting expansion in sales volume and credit sales. Despite the growing receivables, the company maintained a generally strong receivables turnover ratio, signaling effective credit and collection management except for a temporary decline in 2019. The combination of higher revenue and controlled receivables turnover suggests improved operational performance and liquidity management over the analyzed period.
Payables Turnover
Fiserv Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of revenue | 8,128) | 7,812) | 5,309) | 3,069) | 3,024) | |
| Trade accounts payable | 593) | 437) | 392) | 127) | 80) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 13.71 | 17.88 | 13.54 | 24.17 | 37.80 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Accenture PLC | 15.03 | 22.48 | 18.16 | — | — | |
| Adobe Inc. | 5.98 | 5.63 | 7.98 | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| CrowdStrike Holdings Inc. | 19.03 | 105.30 | — | — | — | |
| Fair Isaac Corp. | 16.02 | 15.68 | 14.57 | — | — | |
| International Business Machines Corp. | 6.54 | 7.75 | — | — | — | |
| Intuit Inc. | 2.70 | 4.52 | 4.26 | — | — | |
| Microsoft Corp. | 3.44 | 3.68 | 4.57 | — | — | |
| Oracle Corp. | 10.54 | 12.46 | — | — | — | |
| Palantir Technologies Inc. | 4.53 | 21.55 | — | — | — | |
| Palo Alto Networks Inc. | 22.41 | 15.72 | 11.03 | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | 15.20 | 28.83 | — | — | — | |
| Synopsys Inc. | 31.44 | 26.49 | 38.00 | — | — | |
| Workday Inc. | 15.85 | 18.51 | — | — | — | |
| Payables Turnover, Sector | ||||||
| Software & Services | 5.76 | 6.65 | — | — | — | |
| Payables Turnover, Industry | ||||||
| Information Technology | 4.63 | 4.92 | — | — | — | |
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
Payables turnover = Cost of revenue ÷ Trade accounts payable
= 8,128 ÷ 593 = 13.71
2 Click competitor name to see calculations.
The financial data over the five-year period demonstrates several notable trends related to cost of revenue, trade accounts payable, and payables turnover ratio.
- Cost of Revenue
- The cost of revenue shows a consistent upward trajectory throughout the period under observation. Starting at 3,024 million US dollars in 2017, it increased slightly to 3,069 million in 2018, followed by a substantial rise to 5,309 million in 2019. The upward trend continued significantly, reaching 7,812 million in 2020 and further to 8,128 million in 2021. This pattern reflects a nearly exponential growth over five years, more than doubling from 2017 to 2021.
- Trade Accounts Payable
- Trade accounts payable also demonstrates a rising trend, though at a different scale relative to cost of revenue. Beginning at 80 million US dollars in 2017, payables increased progressively to 127 million in 2018, then saw a substantial jump to 392 million in 2019. In subsequent years, payables continued to grow to 437 million in 2020 and 593 million in 2021. The steady increase indicates growing short-term obligations to suppliers and vendors.
- Payables Turnover Ratio
- The payables turnover ratio exhibits notable fluctuations and an overall declining pattern. The ratio starts high at 37.8 in 2017, then declines sharply to 24.17 in 2018, further decreasing to 13.54 in 2019. There is a slight rebound to 17.88 in 2020, followed by a decrease again to 13.71 in 2021. This decline generally suggests that the company is taking longer to pay its suppliers over time, which could point to changes in payment policies or cash management strategies. The slight uptick in 2020 might reflect temporary operational adjustments possibly influenced by external factors.
Working Capital Turnover
Fiserv Inc., working capital turnover 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) | ||||||
| Current assets | 18,870) | 16,219) | 17,046) | 2,224) | 1,975) | |
| Less: Current liabilities | 18,295) | 15,637) | 15,727) | 2,010) | 1,938) | |
| Working capital | 575) | 582) | 1,319) | 214) | 37) | |
| Revenue | 16,226) | 14,852) | 10,187) | 5,823) | 5,696) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 28.22 | 25.52 | 7.72 | 27.21 | 153.95 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Accenture PLC | 12.77 | 8.71 | 9.85 | — | — | |
| Adobe Inc. | 9.09 | 4.89 | — | — | — | |
| Cadence Design Systems Inc. | 4.01 | 3.94 | — | — | — | |
| CrowdStrike Holdings Inc. | 0.61 | 0.71 | — | — | — | |
| Fair Isaac Corp. | — | 10.83 | — | — | — | |
| International Business Machines Corp. | — | — | — | — | — | |
| Intuit Inc. | 3.85 | 1.73 | 4.17 | — | — | |
| Microsoft Corp. | 1.76 | 1.30 | 1.19 | — | — | |
| Oracle Corp. | 1.29 | 1.12 | — | — | — | |
| Palantir Technologies Inc. | 0.70 | 0.66 | — | — | — | |
| Palo Alto Networks Inc. | — | 1.40 | 1.80 | — | — | |
| Salesforce Inc. | 5.11 | 15.29 | — | — | — | |
| ServiceNow Inc. | 21.76 | 5.76 | — | — | — | |
| Synopsys Inc. | 10.65 | 9.00 | — | — | — | |
| Workday Inc. | 8.31 | 28.97 | — | — | — | |
| Working Capital Turnover, Sector | ||||||
| Software & Services | 2.76 | 2.19 | — | — | — | |
| Working Capital Turnover, Industry | ||||||
| Information Technology | 4.35 | 3.31 | — | — | — | |
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
Working capital turnover = Revenue ÷ Working capital
= 16,226 ÷ 575 = 28.22
2 Click competitor name to see calculations.
The financial data reveals several notable trends across the examined periods.
- Working Capital
- Working capital demonstrated significant volatility over the years. It started relatively low at 37 million USD at the end of 2017 and then experienced a substantial spike to 1,319 million USD by the end of 2019. Following this peak, working capital decreased sharply in 2020 to 582 million USD and further declined slightly to 575 million USD by the end of 2021, indicating a reduction in short-term liquidity after 2019.
- Revenue
- Revenue exhibited a consistent upward trend throughout the analyzed period. Beginning at 5,696 million USD in 2017, revenue showed incremental growth year over year, accelerating further from 10,187 million USD in 2019 to 16,226 million USD in 2021. This steady increase reflects successful business expansion or enhanced sales performance over these years.
- Working Capital Turnover
- The working capital turnover ratio decreased markedly from 153.95 in 2017 to 7.72 in 2019 but then recovered somewhat to 28.22 by 2021. This ratio measures the efficiency with which the company utilizes its working capital to generate revenue. The initial sharp decline may be attributable to the large increase in working capital outpacing revenue growth through 2019. Subsequently, the ratio's partial recovery suggests an improvement in working capital management relative to revenue generation in the later years.
Overall, while the company’s revenue steadily increased, working capital showed substantial fluctuations, with a peak followed by declines. The efficiency of working capital use, reflected in turnover ratio, dropped significantly, likely due to the surge in working capital in 2019, but then improved modestly. These patterns suggest that despite growing revenues, the company faced challenges in optimizing working capital management until recent improvements.
Average Receivable Collection Period
Fiserv Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 5.67 | 5.98 | 3.66 | 5.55 | 5.71 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 64 | 61 | 100 | 66 | 64 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Accenture PLC | 64 | 59 | 63 | — | — | |
| Adobe Inc. | 43 | 40 | 50 | — | — | |
| Cadence Design Systems Inc. | 41 | 46 | — | — | — | |
| CrowdStrike Holdings Inc. | 100 | 125 | — | — | — | |
| Fair Isaac Corp. | 87 | 94 | 94 | — | — | |
| International Business Machines Corp. | 43 | 35 | — | — | — | |
| Intuit Inc. | 15 | 7 | 5 | — | — | |
| Microsoft Corp. | 83 | 82 | 86 | — | — | |
| Oracle Corp. | 49 | 52 | — | — | — | |
| Palantir Technologies Inc. | 45 | 52 | — | — | — | |
| Palo Alto Networks Inc. | 106 | 111 | 73 | — | — | |
| Salesforce Inc. | 134 | 132 | — | — | — | |
| ServiceNow Inc. | 86 | 82 | — | — | — | |
| Synopsys Inc. | 49 | 77 | 60 | — | — | |
| Workday Inc. | 87 | 88 | — | — | — | |
| Average Receivable Collection Period, Sector | ||||||
| Software & Services | 70 | 65 | — | — | — | |
| Average Receivable Collection Period, Industry | ||||||
| Information Technology | 49 | 46 | — | — | — | |
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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.67 = 64
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover showed variability over the observed period. It started at 5.71 in 2017 and slightly declined to 5.55 in 2018. A significant drop to 3.66 occurred in 2019, indicating a reduced efficiency in collecting receivables that year. However, a recovery followed in 2020, with the ratio increasing sharply to 5.98, the highest point within the timeframe. In 2021, the turnover ratio slightly declined to 5.67 but remained close to the earlier high, suggesting a return to more consistent receivables management.
- Average Receivable Collection Period
- The average collection period mirrored the inverse of the turnover trend. It was relatively stable at 64 days in 2017 and increased marginally to 66 days in 2018. In 2019, there was a marked increase to 100 days, reflecting slower receivable collections and potential liquidity concerns during that year. The period improved considerably in 2020 to 61 days, reaching the shortest duration in the series, indicating faster conversion of receivables to cash. In 2021, it slightly rose again to 64 days, aligning with more normalized collection practices after the previous year’s improvement.
Average Payables Payment Period
Fiserv Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 13.71 | 17.88 | 13.54 | 24.17 | 37.80 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 27 | 20 | 27 | 15 | 10 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Accenture PLC | 24 | 16 | 20 | — | — | |
| Adobe Inc. | 61 | 65 | 46 | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| CrowdStrike Holdings Inc. | 19 | 3 | — | — | — | |
| Fair Isaac Corp. | 23 | 23 | 25 | — | — | |
| International Business Machines Corp. | 56 | 47 | — | — | — | |
| Intuit Inc. | 135 | 81 | 86 | — | — | |
| Microsoft Corp. | 106 | 99 | 80 | — | — | |
| Oracle Corp. | 35 | 29 | — | — | — | |
| Palantir Technologies Inc. | 81 | 17 | — | — | — | |
| Palo Alto Networks Inc. | 16 | 23 | 33 | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | 24 | 13 | — | — | — | |
| Synopsys Inc. | 12 | 14 | 10 | — | — | |
| Workday Inc. | 23 | 20 | — | — | — | |
| Average Payables Payment Period, Sector | ||||||
| Software & Services | 63 | 55 | — | — | — | |
| Average Payables Payment Period, Industry | ||||||
| Information Technology | 79 | 74 | — | — | — | |
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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 13.71 = 27
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibited a declining trend from 37.8 in 2017 to 13.71 in 2021. This represents a significant decrease, indicating that the company is turning over its accounts payable less frequently over the years. The decline was particularly notable between 2017 and 2019, dropping from 37.8 to 13.54, followed by some fluctuations with an increase to 17.88 in 2020 before decreasing again to 13.71 in 2021.
- Average Payables Payment Period
- The average payables payment period increased substantially from 10 days in 2017 to 27 days in 2021. This reflects a lengthening of the time the company takes to pay its suppliers. The most considerable increase occurred between 2017 and 2019, moving from 10 to 27 days. Despite a slight reduction to 20 days in 2020, the period extended again to 27 days in 2021, aligning with the longer payment cycle indicated by the payables turnover ratio.
- Overall Trend and Insight
- The trends in both metrics suggest that the company has progressively extended the time taken to settle its payables over the five-year period. The inverse relationship between the payables turnover ratio and the average payment period is consistent, as the lower turnover ratio corresponds with a longer payment duration. This may indicate changes in company policy regarding cash flow management or supplier payment terms, potentially aimed at optimizing liquidity or renegotiating payment conditions with vendors.