Fidelity National Information Services Inc. (NYSE:FIS)

The financial data reveals significant fluctuations in turnover ratios and corresponding average periods related to receivables and payables over the five-year span.

Receivables Turnover

The receivables turnover ratio shows a marked downward trend, declining from 29.98 in 2018 to 5.31 in 2022. This indicates a substantial slowdown in the frequency at which receivables are collected.

Average Receivable Collection Period

Corresponding with the decreased turnover, the average receivable collection period increased from 12 days in 2018 to 69 days in 2022. This suggests that the company took longer to collect payments from customers over time, reflecting a deterioration in receivables management or changes in credit policy.

Payables Turnover

The payables turnover ratio also experienced a significant decline, dropping from 5.73 in 2018 to 1.31 in 2022. This reveals that the company slowed its rate of paying off suppliers and creditors throughout the period.

Average Payables Payment Period

The average payables payment period expanded markedly from 64 days in 2018 to 279 days in 2022, indicating an extended duration of time taken to settle obligations. This could reflect strategic cash management or liquidity challenges.

Working Capital Turnover

Data for working capital turnover is only available for 2018, recorded at 13.85. Without additional years, trend analysis is limited for this metric.

In summary, the company's liquidity dynamics shifted considerably from 2018 to 2022, with slower collection of receivables and extended payment terms to suppliers. These trends point to a lengthening cash conversion cycle and possible cash flow management considerations during the period under review.

Revenue Trends

The revenue demonstrates a consistent upward trajectory throughout the five-year period. Starting at 8,423 million USD in 2018, revenue increased annually, reaching 14,528 million USD by 2022. The most significant annual growth appears between 2018 and 2019 as well as between 2019 and 2020, with growth rates slightly moderating but still positive in subsequent years.

Settlement Receivables

Settlement receivables reveal considerable expansion, especially in the last two years of the data set. There is a progressive increase from 281 million USD in 2018 to 2,738 million USD in 2022. Notably, the growth accelerates sharply from 1,217 million USD in 2021 to 2,738 million USD in 2022, indicating a substantial rise in the amount of outstanding funds receivable from settlements.

Receivables Turnover

The receivables turnover ratio exhibits a marked decline over the period, moving from 29.98 times in 2018 down to 5.31 times in 2022. This downward trend suggests that the company is collecting its receivables more slowly over time, which corresponds with the rising settlement receivables balance. The decline is consistent year-over-year and highlights an elongation in the collection period or growth in receivables relative to revenue.

Overall Insights

The data indicate solid revenue growth alongside a substantial increase in settlement receivables, which appears to negatively impact the receivables turnover ratio. This may suggest adjustments in credit terms, changes in customer payment behavior, or operational factors affecting collections. The sharp rise in settlement receivables, especially in recent years, warrants close monitoring, as it could affect cash flow and working capital management.

Cost of Revenue

The cost of revenue demonstrates a consistent upward trend over the five-year period. Starting at 5,569 million USD at the end of 2018, it increased steadily each year to reach 8,820 million USD by the end of 2022. This upward trajectory indicates rising operational or production costs associated with generating revenue.

Settlement Payables

Settlement payables exhibited a significant increase from 972 million USD in 2018 to 4,228 million USD in 2019, marking a substantial jump within one year. Following this sharp rise, the figure continued to grow but at a slower pace, reaching 6,752 million USD by 2022. This pattern suggests a growing amount of short-term liabilities related to settlements, which might reflect increased volume of transactions or changes in payment terms.

Payables Turnover

The payables turnover ratio reveals a marked decline throughout the period. Beginning at 5.73 times in 2018, it dropped sharply to 1.56 times in 2019, and then remained relatively stable with minor fluctuations until decreasing slightly further to 1.31 times in 2022. A lower turnover ratio indicates that payables are being settled more slowly, implying longer payment cycles or increased days payable outstanding, which could affect liquidity and supplier relationships.

The financial data indicates several notable trends over the five-year period from 2018 to 2022.

Working Capital

There is a clear downward trend in working capital, which shifts from a positive figure of 608 million USD in 2018 to significantly negative values in the subsequent years. Specifically, working capital drops to -1,690 million USD in 2019, further decreases to -2,463 million USD in 2020, reaches its lowest point at -3,758 million USD in 2021, and slightly improves to -3,406 million USD in 2022. This pattern indicates increasing short-term liabilities relative to current assets over the period, suggesting potential liquidity concerns or changes in the company's operational financing.

Revenue

Revenue exhibits a consistent upward trajectory throughout the five years. Starting at 8,423 million USD in 2018, revenue increases steadily year-over-year to reach 10,333 million USD in 2019, 12,552 million USD in 2020, 13,877 million USD in 2021, and ultimately 14,528 million USD in 2022. This growth reflects expanding business operations or higher sales volume and suggests that the company has been successful in generating increasing income despite fluctuations in working capital.

Working Capital Turnover

The working capital turnover ratio is only available for 2018, where it stands at 13.85. The absence of data for subsequent years limits the ability to analyze its development, but the initial high ratio in 2018 may reflect efficient use of working capital at that time.

Overall, the analysis reveals that while revenue has grown substantially over the period, the company has experienced declining working capital, indicating increased reliance on short-term liabilities or a reduction in liquidity. The sharp decline in working capital contrasts with the steady increase in revenue, which may warrant further investigation into the company's financing and operational strategies to ensure sustainable growth and financial stability.

Receivables Turnover

The receivables turnover ratio displays a clear downward trend from 2018 through 2022. Starting at a high of 29.98 in 2018, the ratio sharply decreased to 15.97 in 2019, followed by a moderate recovery to 18.96 in 2020. However, this positive movement was short-lived as the ratio declined again to 11.4 in 2021 and fell further to a notably low level of 5.31 by the end of 2022. This consistent decline suggests a reduced efficiency in collecting receivables over the analyzed period.

Average Receivable Collection Period

The average receivable collection period exhibits an inverse but consistent upward trend relative to the receivables turnover. Starting at a minimal 12 days in 2018, the collection period expanded significantly year over year, reaching 23 days in 2019, then slightly improving to 19 days in 2020. Subsequent years saw a marked increase to 32 days in 2021 and a steep rise to 69 days by 2022. The lengthening collection period indicates growing delays in converting receivables to cash, signaling potential challenges in credit management or customer payment behaviors.

Overall Analysis

The combined trends of a declining receivables turnover ratio and extending collection period reflect diminishing efficiency in receivables management. The company appears to be taking significantly longer to collect outstanding amounts from customers. This could impact operational cash flow and may indicate a need for review of credit policies or collection processes to mitigate risks of bad debts and liquidity stress.

Payables Turnover

The payables turnover ratio experienced a significant decline from 5.73 in 2018 to 1.56 in 2019, followed by slight fluctuations in the subsequent years, reaching a low of 1.31 in 2022. This decreasing trend indicates a slowing rate at which the company is paying off its suppliers or creditors, suggesting extended payment cycles over the period analyzed.

Average Payables Payment Period

The average payment period increased dramatically from 64 days in 2018 to 233 days in 2019. Thereafter, it remained relatively stable with slight variations, recording values of 216 days in 2020, 223 days in 2021, and further increasing to 279 days in 2022. This prolonged payment duration aligns with the observed decrease in payables turnover, confirming a tendency towards delayed payments to suppliers or creditors over time.

Overall Analysis

The financial data reflects a clear shift toward longer payment periods and lower payables turnover ratios after 2018. This trend may reflect changes in the company's working capital management strategies, liquidity considerations, or supplier negotiations. Prolonged payment periods can impact supplier relationships and credit terms, thus warranting close monitoring in future financial periods.