Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
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- Analysis of Revenues
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Liquidity Ratios (Summary)
Fidelity National Information Services Inc., liquidity ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2022-12-31), 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).
- Current Ratio
- The current ratio demonstrates a declining trend from 1.19 in 2018 to a low of 0.74 in 2021, followed by a slight recovery to 0.79 in 2022. This pattern indicates a reduction in current assets relative to current liabilities over the period, suggesting a decrease in short-term liquidity and potentially tighter working capital management.
- Quick Ratio
- The quick ratio mirrors the current ratio trend, decreasing from 1.06 in 2018 to 0.7 in 2021, then marginally increasing to 0.75 in 2022. The consistent lower values compared to the current ratio imply that inventory forms a minor component of current assets. The decline points to a reduction in highly liquid assets excluding inventories, which could reflect strategic adjustments or operational pressures.
- Cash Ratio
- The cash ratio shows a generally low and fluctuating pattern, starting at 0.22 in 2018, dropping sharply to 0.11 in 2019, briefly rising to 0.16 in 2020, then decreasing slightly to 0.14 and 0.13 in the subsequent years. This indicates that cash and cash equivalents constitute a small portion of current liabilities throughout the period, reflecting conservative cash holdings or effective cash utilization policies.
Current Ratio
Fidelity National Information Services Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Current Ratio, Sector | ||||||
| Software & Services | ||||||
| Current Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 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).
1 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- Current assets demonstrated a consistent upward trend over the five-year period, increasing from $3,733 million in 2018 to $12,818 million in 2022. This represents more than a threefold increase, reflecting significant growth in the company's liquid or near-liquid resources available within one year.
- Current Liabilities
- Current liabilities also showed a marked increase, rising from $3,125 million in 2018 to $16,224 million in 2022. The liabilities grew at a faster rate than current assets, with a more than fivefold increase over the same period, suggesting an expansion in short-term obligations.
- Current Ratio
- The current ratio, which measures the ability to cover short-term liabilities with short-term assets, declined from 1.19 in 2018 to a low point of 0.74 in 2021, before slightly improving to 0.79 in 2022. Ratios below 1.0 indicate potential liquidity concerns, implying that current liabilities consistently exceeded current assets during most years analyzed.
- Overall Analysis
- The data reveals that while the company has significantly increased both its current assets and current liabilities, liabilities have risen at a proportionally higher rate. The decreasing current ratio over time indicates a weakening short-term liquidity position, which could affect the company's ability to meet immediate obligations without raising additional capital or liquidating assets. The slight recovery in the current ratio in the final year suggests some effort to improve liquidity management, but it remains below the generally desired threshold of 1.0.
Quick Ratio
Fidelity National Information Services Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Settlement assets | ||||||
| Trade receivables, net of allowance for credit losses | ||||||
| Other receivables | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Quick Ratio, Sector | ||||||
| Software & Services | ||||||
| Quick Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 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).
1 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets show a consistent upward trend over the five-year period. Starting at 3,322 million US dollars in 2018, there was a significant increase to 8,260 million in 2019. This growth continued at a slower but steady pace, reaching 12,235 million by the end of 2022. The rising quick assets indicate an improvement in the company’s liquid asset base over time.
- Current Liabilities
- Current liabilities have increased substantially from 3,125 million US dollars in 2018 to 16,224 million in 2022. The growth in liabilities is notable, especially between 2018 and 2019 when they more than tripled. The trend reflects an increasing short-term obligation load for the company over the period analyzed.
- Quick Ratio
- The quick ratio demonstrates a declining trend over the period. Beginning at 1.06 in 2018, it dropped steadily to a low of 0.70 in 2021 before slightly recovering to 0.75 in 2022. This decline suggests that despite increasing quick assets, current liabilities have risen at a faster rate, resulting in a weakening short-term liquidity position. The ratio remaining below 1 after 2018 implies that the company’s quick assets are insufficient to fully cover current liabilities in the subsequent years.
- Overall Analysis
- While the company has enhanced its liquidity in terms of quick assets substantially, this has been outpaced by an even more significant increase in current liabilities. This has led to a deterioration in the quick ratio, indicating potentially increased liquidity risk. The marginal improvement in the quick ratio in the last year, however, could suggest early signs of stabilization in liquidity management.
Cash Ratio
Fidelity National Information Services Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Cash Ratio, Sector | ||||||
| Software & Services | ||||||
| Cash Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 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).
1 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets exhibit a consistent upward trend over the five-year period. Starting at $703 million at the end of 2018, the amount nearly doubled by 2019 to $1,152 million and continued to increase significantly in the subsequent years, reaching $2,188 million by the end of 2022. This steady growth suggests an improving liquidity position in terms of cash holdings.
- Current liabilities
- Current liabilities show a substantial increase throughout the period. The figure rose sharply from $3,125 million in 2018 to $10,382 million in 2019, marking more than a threefold increase. This growth trend continues, though at a slower pace, reaching $16,224 million by the end of 2022. The sharp increase in current liabilities, especially between 2018 and 2019, indicates a rising short-term financial obligation.
- Cash ratio
- The cash ratio demonstrates a declining pattern over the timeframe. Beginning at 0.22 in 2018, the ratio dropped to 0.11 in 2019 and experienced minor fluctuations afterward, stabilizing around 0.13 by 2022. This decreasing trend reflects that, despite increasing cash assets, current liabilities have grown at a faster rate, leading to a weaker coverage of immediate liabilities by cash.
- Summary
- Overall, the data reveals that while total cash assets have consistently increased, the concurrent and more pronounced rise in current liabilities has led to a declining cash ratio. This indicates a reduction in the company's ability to cover short-term obligations solely with cash assets, potentially signaling increased liquidity risk or a strategic choice to leverage liabilities for growth or operational purposes.