Mastercard Inc. (NYSE:MA)

The financial data reveals several notable trends and patterns over the given periods.

Net Operating Profit After Taxes (NOPAT)

There is an overall upward trend in NOPAT from 2018 to 2022, increasing from 5,750 million US$ to 9,638 million US$. A notable rise occurred between 2018 and 2019, followed by a decline in 2020. However, the figures recovered and continued to grow in 2021 and 2022, reaching the highest value within the observed timeframe.

Cost of Capital

The cost of capital remains relatively stable across the five years, fluctuating marginally between 15.17% and 15.38%. This stability suggests consistent capital costs over the period with no significant upward or downward shifts.

Invested Capital

Invested capital shows a steady increase from 11,243 million US$ in 2018 to a peak of 22,365 million US$ in 2021, followed by a slight decrease to 21,548 million US$ in 2022. This indicates substantial growth in capital deployment until 2021, with a minor reduction thereafter.

Economic Profit

Economic profit follows a pattern similar to that of NOPAT, increasing significantly from 2018 to 2019, dropping in 2020, then rising again in the subsequent years. It increased from 4,024 million US$ in 2018 to a high of 6,347 million US$ in 2022. This reflects an overall enhancement in value creation over the period, despite the dip in 2020.

In summary, the company experienced growth in operating profitability and economic profit, with a steady cost of capital, and expanding invested capital until 2021. The decline in 2020 appears as an anomaly, possibly due to external factors, but recovery and further growth in subsequent years are evident. The slight decrease in invested capital in 2022 may warrant closer examination going forward.

Net Income

The net income exhibited a general upward trend over the five-year period. Starting at $5,859 million in 2018, it increased notably to $8,118 million in 2019. Following this peak, there was a decline to $6,411 million in 2020. However, the net income recovered in the subsequent years, reaching $8,687 million in 2021 and further increasing to $9,930 million by the end of 2022. This suggests a strong recovery and growth trajectory after a dip in 2020.

Net Operating Profit After Taxes (NOPAT)

The NOPAT values similarly reflect a pattern consistent with net income. It rose from $5,750 million in 2018 to $8,254 million in 2019. A decline was observed in 2020, with NOPAT reducing to $6,937 million. Subsequently, there was a steady increase across 2021 and 2022, reaching $9,129 million and $9,638 million respectively. The data show a comparable recovery and expansion post-2020, indicating operational efficiency improvements alongside profitability growth.

Overall Insights

Both net income and NOPAT demonstrate resilience and growth over the observed period, despite a contraction in 2020, which may be attributable to broader economic factors impacting that year. The recovery in 2021 and continued growth through 2022 imply effective management strategies and operational execution. The consistency between net income and NOPAT trends highlights alignment between overall profitability and core operating performance.

Income tax expense

The income tax expense demonstrated moderate fluctuations over the five-year period. Beginning at $1,345 million in 2018, it increased notably to $1,613 million in 2019, suggesting a rise in taxable income or a change in tax policies. In 2020, the expense decreased to $1,349 million, potentially reflecting decreased profitability or tax adjustments during that year. Subsequently, it rose again to $1,620 million in 2021 and further to $1,802 million in 2022, indicating a consistent upward trend in tax obligations in the latter years.

Cash operating taxes

Cash operating taxes exhibited some variability with a clear upward trend toward the end of the period. Starting at $1,606 million in 2018, the figure edged up slightly to $1,651 million in 2019 before dropping to $1,356 million in 2020. This reduction might be indicative of lower taxable cash operating profits or tax deferrals. However, a substantial increase occurred in 2021, with cash operating taxes reaching $1,782 million, followed by a significant spike to $2,543 million in 2022. This sharp rise in the last year suggests increased taxable cash flow or changes in tax payment timing or rates.

The financial data indicates several notable trends over the five-year period ending December 31, 2022. First, total reported debt and leases have consistently increased year over year, rising from $6,916 million in 2018 to $14,793 million in 2022. This near doubling suggests an increasing reliance on debt financing or lease obligations.

In contrast, total stockholders’ equity showed a generally positive trend until 2021, moving from $5,395 million in 2018 to a peak of $7,312 million in 2021. However, there was a decline in equity in 2022 to $6,298 million, indicating a potential erosion of owners' residual interest in the company during that final year.

Invested capital, which encompasses the total of debt and equity invested in the company, rose steadily from $11,243 million in 2018 to a high of $22,365 million in 2021. This represents almost a doubling over the period. In 2022, a slight decrease to $21,548 million was observed, consistent with the drop in stockholders’ equity and the stabilization of total debt.

Total Reported Debt & Leases

Exhibits a clear upward trend, increasing by approximately 114% over five years, reflecting increased leverage or funding through leases.

Total Stockholders’ Equity

Generally increased from 2018 through 2021, rising by about 36%, but declined by 14% in 2022, possibly signaling reduced retained earnings or share repurchases.

Invested Capital

More than doubled from 2018 to 2021, then experienced a minor decrease in the final year, suggesting a peak in invested resources followed by slight contraction.

Overall, the data indicate that the entity has progressively expanded its capital base driven mostly by increasing debt and leases, with equity contributing to growth until 2021. The partial reversal in equity and invested capital levels in 2022 may warrant further examination to understand the underlying causes, such as market conditions, operational performance, or capital structure adjustments.

Economic Profit

The economic profit demonstrated notable fluctuations over the observed period. Beginning at 4,024 million US dollars in 2018, it increased substantially to 5,997 million in 2019, followed by a decline to 3,925 million in 2020. Subsequently, it rebounded to 5,731 million in 2021 and further rose to 6,347 million in 2022, indicating an overall positive trend with some year-to-year volatility.

Invested Capital

Invested capital showed a consistent growth trajectory from 11,243 million US dollars in 2018, rising steadily each year to reach 21,548 million in 2022. This continuous increase suggests significant capital allocation and expansion efforts over the five-year period, although there was a slight decrease from 22,365 million in 2021 to 21,548 million in 2022.

Economic Spread Ratio

The economic spread ratio exhibited variations during the timeframe. It peaked at 40.87% in 2019 after starting at 35.79% in 2018, then sharply declined to 19.77% in 2020. Following this drop, the ratio showed recovery by increasing to 25.62% in 2021 and further to 29.46% in 2022. Despite the fluctuation, the ratio ended the period at a lower level than the 2019 peak but higher than in 2020.

Economic Profit

The economic profit demonstrates a fluctuating but overall increasing trend over the five-year period. Beginning at 4024 million US dollars in 2018, the figure rose significantly to 5997 million in 2019. However, it then declined to 3925 million in 2020, suggesting a potential impact during that year. Recovery followed, with economic profit climbing to 5731 million in 2021 and reaching the highest level in the dataset at 6347 million in 2022.

Adjusted Net Revenue

Adjusted net revenue shows a general upward trend throughout the years. Starting at 15,022 million US dollars in 2018, it increased moderately to 16,908 million in 2019 but then decreased to 15,455 million in 2020. From 2020 onwards, revenue grew substantially, reaching 19,048 million in 2021 and further increasing to 22,257 million in 2022, marking the highest revenue across the period.

Economic Profit Margin

The economic profit margin has varied, with some volatility across the years. The margin was 26.79% in 2018, rising notably to 35.47% in 2019, the highest in the period, before dropping to 25.39% in 2020. It partially recovered to 30.09% in 2021 but then decreased again to 28.52% in 2022. This pattern indicates fluctuations in profitability relative to the adjusted net revenue.

Summary and Insights

Overall, both economic profit and adjusted net revenue exhibit resilience, with recovery and growth after the declines observed in 2020. The dip in 2020 across all metrics could be indicative of external challenges affecting performance during that year. While economic profit and net revenue end on a higher note than at the start of the period, economic profit margin shows more variability, suggesting changes in efficiency or cost structure impacting profit relative to revenue. The highest economic profit margin in 2019 aligns with a substantial increase in economic profit during that year, highlighting strong profitability before the subsequent volatility.