Analysis of Geographic Areas
Mastercard Inc. operates in 2 regions: United States and Other countries.
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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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Area Asset Turnover
Mastercard Inc., asset turnover by geographic area
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | |||||
| Other countries |
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).
- United States Asset Turnover
- The asset turnover ratio in the United States exhibited a declining trend from 2018 to 2020, decreasing from 8.05 in 2018 to 4.26 in 2020. This downward movement indicates a reduced efficiency in utilizing assets for revenue generation during this period. However, a recovery was observed from 2020 onwards, with the ratio rising to 5.41 in 2021 and further to 6.53 in 2022. Despite this rebound, the ratio in 2022 remained below the 2018 peak, suggesting the company had not yet returned to its earlier efficiency levels in the U.S. market.
- Other Countries Asset Turnover
- For regions outside the United States, the asset turnover ratio also showed a significant decline between 2018 and 2020, falling sharply from 32.52 in 2018 to 14.30 in 2020. This indicates a substantial reduction in the efficiency of asset use in generating revenue in these markets. From 2020 to 2022, the ratio slightly increased, reaching 16.87 in 2022, suggesting some recovery but still remaining well below the 2018 figure. The relatively high values compared to the U.S. indicate that asset turnover in other countries, despite the decline, was substantially greater in magnitude throughout the period.
- Comparative Insights
- Overall, both geographic segments experienced a decline in asset turnover ratios from 2018 through 2020, likely reflecting broader operational or economic challenges. The subsequent recovery from 2020 to 2022 was evident in both areas, although levels did not return to those seen in 2018. The magnitude of turnover ratios in other countries was consistently higher than in the U.S., indicating a more intensive use of assets in revenue generation outside the domestic market despite the declines. This trend suggests differing dynamics or efficiencies in geographic markets that may warrant further strategic consideration.
Area Asset Turnover: United States
Mastercard Inc.; United States; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net revenue | |||||
| Property, equipment and right-of-use assets, net | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
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
Area asset turnover = Net revenue ÷ Property, equipment and right-of-use assets, net
= ÷ =
- Net Revenue
- The net revenue shows an overall upward trend from 2018 through 2022. Starting at $4,934 million in 2018, it increased to $5,403 million in 2019, followed by a slight decline to $5,049 million in 2020. Subsequently, the revenue rose significantly, reaching $6,043 million in 2021 and peaking at $7,338 million in 2022. This pattern indicates resilience and recovery in the latter years after a minor dip in 2020.
- Property, Equipment, and Right-of-Use Assets, Net
- The net value of property, equipment, and right-of-use assets increased markedly from $613 million in 2018 to $1,147 million in 2019. Following this sharp rise, it showed relative stability, with small fluctuations—$1,185 million in 2020, a slight decrease to $1,117 million in 2021, and a marginal increase to $1,123 million in 2022. This suggests significant capital investment prior to 2019, with maintenance of asset levels in the subsequent years.
- Area Asset Turnover
- The area asset turnover ratio experienced a downward trend from 8.05 in 2018 to 4.26 in 2020, indicating a reduction in revenue generated per unit of assets. However, starting in 2021, the ratio improved to 5.41 and further increased to 6.53 in 2022. This rebound suggests enhanced efficiency in utilizing assets to generate revenue after the initial decline.
- Summary of Trends
- Overall, the data indicates an initial period of investment in assets and a corresponding decrease in efficiency as reflected by the asset turnover ratio. Following a dip in revenue in 2020, there is a recovery phase where net revenue increased significantly alongside improvements in asset turnover, despite relatively stable asset levels. This reflects a positive shift toward more efficient use of assets and stronger financial performance in the most recent years.
Area Asset Turnover: Other countries
Mastercard Inc.; Other countries; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net revenue | |||||
| Property, equipment and right-of-use assets, net | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
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
Area asset turnover = Net revenue ÷ Property, equipment and right-of-use assets, net
= ÷ =
The data for the “Other countries” geographic area reveals several notable financial trends over the five-year period analyzed.
- Net Revenue
- Net revenue exhibited overall growth, increasing from 10,016 million US dollars in 2018 to 14,899 million US dollars in 2022. There was a dip in 2020, decreasing to 10,252 million US dollars from the 2019 level of 11,480 million US dollars. However, this was followed by a substantial recovery and growth, reaching the highest value of the period in 2022. This indicates resilience and strong revenue expansion after the temporary decline observed in 2020.
- Property, Equipment, and Right-of-Use Assets, Net
- The net value of property, equipment, and right-of-use assets showed consistent and steady growth throughout the period. Starting at 308 million US dollars in 2018, the figure more than doubled to 883 million US dollars by 2022. This suggests ongoing investments in physical and leased assets, potentially supporting operations and growth initiatives in the geographic area.
- Area Asset Turnover
- The area asset turnover ratio demonstrated a declining trend from 2018 through 2020, dropping sharply from 32.52 to 14.3. From 2021 onward, the ratio showed moderate improvement, moving slightly upwards to 16.87 by 2022. This indicates that asset efficiency, measured by revenue generated per unit of asset value, decreased significantly in the earlier years but has since been recovering somewhat, albeit remaining well below the 2018 peak.
Overall, the data suggests expanding investment in assets alongside growing revenues in the “Other countries” segment. The temporary decline in net revenue in 2020 likely impacted asset turnover ratios negatively, but the subsequent recovery in revenue and continued asset growth point to improving operational performance and market conditions post-2020.
Net revenue
Mastercard Inc., net revenue by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | |||||
| Other countries | |||||
| Total |
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 net revenue data across geographic areas over the five-year period exhibits notable trends and patterns. Overall, the company has experienced consistent growth in total net revenue from 2018 to 2022.
- United States
- The net revenue in the United States fluctuated slightly in the initial years but showed a strong upward trend towards the end of the period. Starting at 4,934 million US dollars in 2018, the revenue increased to 5,403 million in 2019 but then declined to 5,049 million in 2020. From 2020 onward, a steady increase was observed, reaching 6,043 million in 2021 and further rising to 7,338 million in 2022. This signifies a recovery and expansion phase after a brief dip in 2020.
- Other countries
- Other countries demonstrated a generally increasing trend with some volatility. Revenues grew from 10,016 million US dollars in 2018 to 11,480 million in 2019, then decreased to 10,252 million in 2020, reflecting possible challenges that year. Post-2020, the region saw a robust recovery and expansion, with revenues climbing to 12,841 million in 2021 and 14,899 million in 2022. The growth in other countries consistently outpaced that of the United States, contributing significantly to the overall revenue increase.
- Total
- The aggregate net revenue followed a pattern influenced by the combined results of both geographic segments. Total revenue increased from 14,950 million US dollars in 2018 to 16,883 million in 2019, then declined to 15,301 million in 2020. The subsequent years were marked by strong growth, reaching 18,884 million in 2021 and culminating at 22,237 million in 2022. The overall upward trajectory after 2020 indicates recovery from a challenging period and underscores the company’s growing market presence internationally and domestically.
Property, equipment and right-of-use assets, net
Mastercard Inc., property, equipment and right-of-use assets, net by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | |||||
| Other countries | |||||
| Total |
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).
- Trends in Property, Equipment, and Right-of-Use Assets
- Over the examined five-year period, there is a clear upward trend in the net value of property, equipment, and right-of-use assets. The total assets increased steadily from 921 million US dollars at the end of 2018 to 2,006 million US dollars by the end of 2022.
- Geographic Breakdown Analysis
- The United States segment shows significant growth from 613 million US dollars in 2018 to a peak of 1,185 million US dollars in 2020, followed by a slight decline and stabilization around 1,120 million US dollars through 2021 and 2022. This indicates some volatility but overall growth relative to the starting point.
- For other countries, a consistent and robust growth pattern is observed throughout the period. Values rose from 308 million US dollars at the end of 2018 to 883 million US dollars by the end of 2022, demonstrating sustained international expansion or increased investment outside the US.
- Comparative Insights
- While the United States continues to represent the larger portion of total assets throughout the timeline, the rate of increase in other countries’ assets is notably higher, with nearly triple the growth in absolute terms compared to the domestic segment between 2018 and 2022.
- The steady total asset growth, driven mainly by international expansion, could imply strategic focus on global scaling and increasing asset base outside the United States. This diversification may reduce concentration risk and reflect efforts to penetrate or strengthen presence in other markets.