Fidelity National Information Services Inc. (NYSE:FIS)

The analysis of the financial leverage and debt ratios over the observed periods reveals notable trends and shifts in the company's capital structure.

Debt to Equity Ratio

This ratio experienced significant volatility initially, with a sharp increase from 0.93 in March 2019 to 1.83 in June 2019, followed by a pronounced decrease to 0.41 by September 2019. For most of the subsequent periods until September 2022, the ratio remained relatively stable around 0.40 to 0.43, indicating a consistent balance between debt and equity. However, starting in the final quarter of 2022 and continuing into the first quarter of 2023, the ratio increased notably to 0.74, suggesting a renewed reliance on debt relative to equity.

Debt to Capital Ratio

This ratio mirrored aspects of the debt to equity ratio movement, peaking early in June 2019 at 0.65 before declining sharply to roughly 0.29 by September 2019. It then maintained a steady level close to 0.29 throughout most of the timeframe until September 2022. In the last two observed quarters, there was an increase to around 0.42 to 0.43, reflecting a higher proportion of debt within the company’s total capital.

Debt to Assets Ratio

The ratio began relatively high at 0.38 in March 2019, climbed to 0.56 in June 2019, then decreased to approximately 0.24 by September 2019. It remained fairly stable around 0.23 to 0.25 through September 2022. The period ended with an increasing trend to approximately 0.32 and 0.33 in the final two quarters, indicating an increase in debt compared to total assets.

Financial Leverage Ratio

Starting at 2.43 in March 2019, financial leverage rose to a peak of 3.29 in June 2019. Subsequently, it sharply declined to about 1.7 by September 2019 and remained consistently in the range of 1.68 to 1.75 through September 2022. The ratio then increased significantly to 2.32 in December 2022 and remained elevated at 2.25 in March 2023. This suggests a rising use of debt financing and a higher degree of leverage in the recent periods.

In summary, after an initial period of fluctuation in 2019, the company maintained a relatively conservative debt profile with stable ratios through most of 2020 to 2022. Toward the end of 2022 and into early 2023, however, there is a discernible shift towards higher leverage, with all ratios indicating an increasing reliance on debt relative to equity, capital, and assets. This trend may warrant further attention as it could implicate changes in the company's risk profile and capital management strategy.

Total Debt

The total debt showed a significant increase from the first quarter of 2019 to mid-2019, more than doubling from approximately 9.2 billion to 18.2 billion US dollars. After this sharp rise, it continued to increase gradually, peaking around the end of 2019 and remaining relatively stable through 2020 at roughly 20 billion. In the following years, the debt level fluctuated modestly, mostly hovering slightly below or above 20 billion. By the first quarter of 2023, the total debt stood at just over 20 billion, indicating limited net change over the last few years despite earlier volatility.

Total Stockholders' Equity

Stockholders' equity experienced a dramatic increase starting in the third quarter of 2019, jumping from just under 10 billion to nearly 49,000 million US dollars and maintaining this elevated level through 2021, with minor declines. However, starting in the first quarter of 2022, equity began to decline steadily and sharply, falling to about 27 billion by the first quarter of 2023. This decline suggests a substantial decrease in the company's net asset value during the most recent periods covered, erasing much of the previous gains observed in 2019 and 2020.

Debt to Equity Ratio

The debt to equity ratio reflects the earlier changes observed in debt and equity. Initially, it spiked from below 1 to over 1.8 by mid-2019, corresponding to the surge in debt and before the equity increase. With the rapid growth in equity in late 2019, the ratio dropped sharply to approximately 0.4 and stabilized around this level through most of 2020 and 2021, indicating a balanced leverage position. Starting in 2022, the ratio began to rise again, reaching around 0.74 by the first quarter of 2023, reflecting the concurrent decline in equity while debt remained relatively stable. This upward trend in leverage suggests increasing financial risk or more aggressive capital structuring in the recent period.

Total Debt

The total debt exhibited significant volatility over the analyzed period. Initially, there was a steep increase from approximately 9.2 billion USD to over 20 billion USD between the first and third quarters of 2019. Following this peak, total debt generally stabilized around the 20 billion USD mark through to the end of 2020. From 2021 onward, the levels fluctuated modestly, remaining between 19 and 20 billion USD, with a slight uptick observed in the last recorded quarter of March 2023 where debt reached approximately 20 billion USD again.

Total Capital

Total capital showed a marked increase in the first three quarters of 2019, rising considerably from around 19 billion USD to nearly 70 billion USD. This elevated level was sustained through 2019 and 2020, with minor variations. However, starting in 2021, total capital gradually declined, moving from about 68 billion USD to below 65 billion USD by late 2022. A notable drop occurred at the end of 2022, where the capital value decreased sharply to approximately 47 billion USD and remained near that level into the first quarter of 2023.

Debt to Capital Ratio

The debt to capital ratio reflected the trends seen in both total debt and total capital. The ratio surged in mid-2019, reaching 0.65, indicative of a rapid increase in debt relative to capital at that time. It then sharply decreased to about 0.29 by the third quarter of 2019 and maintained a stable range around 0.29 to 0.30 through most of 2019, 2020, and 2021, signaling a balanced capital structure during this period. Toward late 2022 and into early 2023, the ratio increased to approximately 0.42–0.43, corresponding to the significant decline in total capital with only a moderate reduction in debt, thus indicating a relatively higher leverage in the most recent periods.

Overall Insights

The data suggests that the company underwent a period of leveraged expansion around 2019, with both debt and capital rising sharply. Afterward, the total capital decreased notably beginning in 2021, prominently at the end of 2022, while debt remained relatively stable. This shift led to an increased leverage ratio, pointing to a potentially higher financial risk exposure. The steadiness in debt levels amid falling capital may warrant closer monitoring of liquidity and solvency metrics going forward.

The analysis of the financial data reveals several distinct trends concerning total debt, total assets, and the debt-to-assets ratio over the examined periods.

Total Debt

Total debt showed a significant increase from the first quarter of 2019 through mid-2019, almost doubling from approximately $9.2 billion to over $18.2 billion. This elevated level of debt remained relatively stable through 2019 and 2020, fluctuating around the $20 billion mark. From early 2021 onwards, the debt level exhibited moderate variation but generally stayed within the range of approximately $19.2 billion to $20.3 billion. Notably, the most recent period reported shows total debt at about $20 billion, indicating stability at a higher debt level compared to the early 2019 baseline.

Total Assets

Total assets experienced substantial volatility during the timeline. Initially, assets increased from roughly $24.1 billion in early 2019 to a peak of about $83.8 billion by the end of 2019, a more than threefold increase within that year. This elevated asset base was maintained through 2020 and 2021, with minor fluctuations around the $82 billion to $83 billion level. However, starting in 2022, there was a noticeable gradual decline in total assets, decreasing from approximately $81.2 billion down to about $61.1 billion by the first quarter of 2023. This decline represents a substantial contraction in the asset base over approximately a year.

Debt to Assets Ratio

The debt-to-assets ratio depicted significant variation over time, reflecting the combined movements in debt and asset levels. Initially, the ratio increased sharply from 0.38 in the first quarter of 2019 to a peak of 0.56 in mid-2019, coinciding with the increase in debt and asset base fluctuations. Thereafter, the ratio stabilized around 0.24 to 0.25 from late 2019 through most of 2021, indicating a lower proportion of debt relative to assets during this period of expanded asset base. From 2022 onwards, the ratio increased gradually, rising from approximately 0.24 to 0.33 by early 2023. This increase corresponds with the declining asset base and relatively stable debt levels, suggesting increasing financial leverage and potential upward pressure on financial risk.

In summary, the data exhibits an initial phase of rapid asset growth and increased debt, followed by a sustained period where both total debt and total assets remained relatively stable at elevated levels. Recently, a notable decline in total assets coupled with stable debt has led to an increased debt-to-assets ratio, signaling a trend toward higher leverage that warrants attention for its implications on financial stability and risk profile.

Total Assets

The total assets exhibit significant fluctuations throughout the observed periods. Starting at approximately 24 billion USD in the first quarter of 2019, the assets notably surged to over 83 billion USD by the third quarter of 2019 and maintained levels around 83–84 billion through the end of 2020. Subsequently, there is a gradual declining trend from early 2021, where assets decreased consistently, reaching about 61 billion USD by the first quarter of 2023. This downward movement marks a substantial contraction in asset base during the final periods.

Total Stockholders’ Equity

Stockholders’ equity follows a somewhat parallel pattern to assets but with distinct characteristics. It started near 9.9 billion USD in early 2019, then experienced a sharp increase to around 49 billion USD in the third quarter of 2019, and remained relatively stable, fluctuating slightly in the 47–49 billion range until late 2022. A pronounced decline becomes apparent at the start of 2023, with equity falling steeply to approximately 27 billion USD, mirroring the contraction in total assets.

Financial Leverage

Financial leverage shows considerable variability over time. Initially, the ratio stood at 2.43 in early 2019, rising sharply to 3.29 by the second quarter of 2019. It then decreased significantly to approximately 1.7 by the third quarter of 2019 and remained fairly stable around this level for most of 2019 through 2022, fluctuating narrowly between 1.68 and 1.75. However, starting late 2022 and into early 2023, financial leverage increased noticeably to above 2.3, indicating a higher reliance on debt funding relative to equity in the latest periods.

Overall Insights

The data reflects a period of rapid growth and asset accumulation in 2019, followed by a phase of stability throughout 2020 and much of 2021 and 2022. The assets and equity remained at peak levels during this period, indicating robust capital structure and balance sheet strength. The sudden and significant declines in both assets and equity starting late 2022 and continuing into 2023 suggest either asset disposals, impairments, or reclassifications that drastically reduced the balance sheet size. Concurrently, the rise in financial leverage during this recent period implies that financing structure shifted towards higher debt levels relative to equity, possibly reflecting changes in capital strategy or response to market conditions. The overall trends indicate a more conservative leverage posture during the mid periods, reverting to a higher leveraged position by early 2023 amid declining asset and equity bases.