Fidelity National Information Services Inc. (NYSE:FIS)

Return on Assets (ROA)

The ROA exhibits significant fluctuations over the analyzed periods. Initially, it declines steadily from 3.37% in March 2019 to 0.04% in June 2020, even reaching negative territory by September 2020 with -0.13%. Following a recovery phase, ROA increases gradually, peaking around 1.2% in September 2022. However, a sharp and pronounced decline occurs afterwards, with ROA plummeting drastically to -26.42% in March 2023 and further to -27.34% in the subsequent quarter, indicating severe deterioration in asset profitability during the most recent periods.

Financial Leverage

The financial leverage ratio shows moderate variability. It starts at 2.43 in March 2019, reaching a high of 3.29 in June 2019, before stabilizing around 1.7 for multiple consecutive quarters until late 2022. A mild upward trend toward 2.32 and 2.25 is observed in the last two quarters, suggesting a slight increase in the company's use of debt relative to equity near the end of the time frame.

Return on Equity (ROE)

The ROE follows a pattern similar to ROA but with more pronounced changes. Beginning at 8.21% in March 2019, ROE declines sharply, reaching near-zero and negative values through late 2019 and 2020. From early 2021, a gradual improvement phase is visible, with ROE climbing back up to just over 2% by the third quarter of 2022. A subsequent drastic collapse occurs, with ROE falling to -61.43% and -61.63% in the two most recent quarters respectively, reflecting substantial negative returns for equity holders, likely linked to extraordinary losses or impairments.

Overall Trends and Insights

The data indicates a period of declining profitability and increasing instability starting around early 2019 and reaching critical levels by early 2023. Both return metrics, ROA and ROE, demonstrate a recovery phase during 2021 and early 2022, but the recovery is short-lived as they both plummet dramatically by the first quarter of 2023. Financial leverage remains relatively stable for most of the analyzed period, implying that the volatility in return measures is less influenced by changes in capital structure and more likely attributable to operational performance or asset impairments. The extreme negative returns in the latest periods suggest significant financial distress or exceptional charges impacting the company’s profitability and shareholder value.

The analyzed financial data reveals several notable trends and fluctuations across the reported periods.

Net Profit Margin

The net profit margin exhibits considerable volatility over the reported quarters. Initially, it started at a relatively healthy level around 9.65% in the first quarter of 2019 but showed a declining trend towards the end of 2019, reaching as low as 1.26% by December 2020. The margin briefly improved in 2021 and early 2022, peaking at approximately 6.47% in September 2022. However, a dramatic decline occurred starting from the last quarter of 2022 into the first quarter of 2023, plunging to deeply negative values around -115%. This steep negative margin indicates significant losses or extraordinary financial distress during this period.

Asset Turnover

Asset turnover generally remained relatively stable and low throughout most of the periods, fluctuating between 0.11 and 0.18 from 2019 through late 2022. Notably, from late 2022 to early 2023, asset turnover increased significantly, reaching approximately 0.24 by the first quarter of 2023. This suggests a recent improvement in the efficiency of asset utilization to generate revenue, albeit from a low base.

Financial Leverage

Financial leverage showed high variability during the initial periods, peaking at 3.29 in the second quarter of 2019 before stabilizing near 1.7 through most of 2020 and 2021. In late 2022 and early 2023, leverage notably increased again, rising to around 2.25 in the first quarter of 2023. This indicates a moderate increase in the use of debt financing or liabilities relative to equity in the most recent quarters.

Return on Equity (ROE)

Return on equity mirrored the volatility seen in net profit margin, starting at 8.21% in early 2019 and declining sharply over the next two years. Between 2020 and 2022, ROE remained close to zero, with occasional slight positive or negative fluctuations indicating low or negative profitability relative to shareholders' equity. A severe deterioration is observed in the last two quarters reported, with ROE plunging to approximately -61%, reflecting substantial losses impacting shareholders’ returns during this recent period.

In summary, the firm exhibited declining profitability and returns from 2019 to early 2021, followed by a modest recovery through 2022. However, the financial position deteriorated significantly by the end of 2022 and into 2023, as evidenced by sharply negative net profit margins and ROE despite improving asset turnover and increasing financial leverage. These patterns suggest operational challenges and increased financial risk in the most recent periods.

Net Profit Margin

The net profit margin exhibited a declining trend from early 2019 through most of 2020, reaching negative values by the third quarter of 2020. It then recovered gradually through 2021 and into early 2022, peaking at over 6%. However, in the most recent quarters, there was an abrupt and extreme decline, with margins plummeting to approximately -115%, indicating significant losses relative to revenue.

Asset Turnover

Asset turnover started relatively moderate at 0.35 in the first quarter of 2019, then decreased sharply to a low of around 0.11 in the third quarter of 2019. After this trough, it stabilized around 0.15 for several quarters through 2021. From early 2022 onward, asset turnover showed incremental improvement, reaching 0.24 by the first quarter of 2023, the highest level observed in the data set.

Return on Assets (ROA)

ROA mirrored the trends seen in net profit margin and asset turnover, with an initial decline from 3.37% in the first quarter of 2019 to negative values by late 2020. Afterward, it experienced a gradual recovery, rising modestly to just over 1.2% by the third quarter of 2022. This positive trajectory reversed dramatically in the last two quarters, where ROA plunged to approximately -27%, indicating significant inefficiencies in asset utilization or severe net losses.