Balance Sheet: Assets
The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.
Assets are resources controlled by the company as a result of past events and from which future economic benefits are expected to flow to the entity.
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- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2006
- Price to Operating Profit (P/OP) since 2006
- Analysis of Revenues
- Analysis of Debt
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Mastercard Inc., consolidated balance sheet: assets
US$ in millions
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).
The analysis of the annual financial data reveals several noteworthy trends in the company's asset composition and valuation over the evaluated periods.
- Cash and Cash Equivalents
- The cash and cash equivalents showed a generally fluctuating trend, increasing from 6,682 million US dollars in 2018 to a peak of 10,113 million in 2020, before declining again to around 7,008 million by the end of 2022. This indicates periods of cash buildup followed by strategic utilization or redistribution.
- Restricted Cash for Litigation Settlement
- This item remained relatively stable over the years, with slight increases, suggesting ongoing or resolved legal matters requiring reserved liquidity without major variation.
- Investments
- Investments decreased steadily from 1,696 million in 2018 to 400 million in 2022, indicating a reduction in the investment portfolio or reclassification of these assets.
- Accounts Receivable
- There is a clear upward trajectory in accounts receivable, growing from 2,276 million in 2018 to 3,425 million in 2022. This growth suggests increased sales on credit or extended payment terms.
- Settlement Assets
- Settlement assets exhibited a declining trend from 2,452 million in 2018 to 1,270 million in 2022, reflecting either a decrease in the company's settlement obligations or a shift in operational processes.
- Restricted Security Deposits Held for Customers
- These deposits increased steadily from 1,080 million in 2018 to a peak of 1,873 million in 2021 before decreasing to 1,568 million in 2022, demonstrating fluctuating customer-related securities.
- Customer and Merchant Incentives (Current and Noncurrent)
- Both current and noncurrent incentives increased consistently: current incentives rose from 778 million in 2018 to 1,392 million in 2022, and noncurrent incentives grew from 2,458 million to 4,578 million over the same period. This reflects a strategic emphasis on incentivizing customer and merchant engagement.
- Prepaid Income Taxes and Income Taxes Receivable
- Prepaid income taxes fluctuated without a clear trend and showed a marked drop in 2022. Income taxes receivable steadily increased from 298 million to 633 million, indicating changes in tax positions or deferred tax assets.
- Other Current Assets
- There is an increasing trend in other current assets as well as prepaid expenses and other current assets, suggesting a buildup of miscellaneous short-term assets supporting operations.
- Property, Equipment, and Right-of-Use Assets, Net
- Property and equipment steadily increased from 921 million to 1,327 million, while the operating lease right-of-use assets introduced in 2019 remained relatively stable. Combined, these asset bases reflect ongoing investment in physical and leased assets.
- Deferred Income Taxes
- Deferred income taxes remained relatively flat until 2021, then sharply increased to 1,151 million in 2022, implying significant tax deferrals or changes in tax regulations.
- Goodwill and Other Intangible Assets
- Goodwill grew substantially from 2,904 million in 2018 to a peak of 7,662 million in 2021 before slightly declining in 2022. Similarly, other intangible assets expanded notably from 991 million to 3,859 million. These trends reflect acquisitions or capitalization of intangible resources growing the asset base.
- Equity Investments
- Equity investments rose from 337 million to a peak of 1,834 million in 2021 before a slight reduction to 1,730 million in 2022, indicating expansion followed by modest retraction in equity stakes.
- Other Assets and Noncurrent Assets
- Other assets increased significantly, supporting a rise in total noncurrent assets from 8,689 million to 22,118 million, indicating substantial capitalized investments and long-term resource accumulation.
- Total Assets
- Total assets grew consistently from 24,860 million in 2018 to 38,724 million in 2022, reflecting overall expansion in the company's resource base and asset valuation.
In summary, the data demonstrates a general expansion in asset base driven by increases in goodwill, intangible assets, customer incentives, and long-term assets, alongside fluctuations in cash and investments. The growth in accounts receivable and prepaid taxes indicates changing operational and tax dynamics. The steep rise in deferred income taxes suggests evolving tax strategies or regulations affecting future tax liabilities. Overall, the company appears to be investing heavily in intangible resources and maintaining a robust asset profile to support its operations and strategic objectives.