Mastercard Inc. (NYSE:MA)

Debt to equity

The debt to equity ratio demonstrates an upward trend over the five-year period, increasing from 1.17 in 2018 to 2.23 in 2022. This indicates a growing reliance on debt relative to shareholders' equity.

Debt to equity (including operating lease liability)

When including operating lease liabilities, the debt to equity ratio shows a similar upward trend, rising from 1.17 in 2018 to 2.35 in 2022. This suggests that financial obligations from leases contribute meaningfully to overall leverage.

Debt to capital

The debt to capital ratio also ascends steadily, moving from 0.54 in 2018 to 0.69 in 2022, reflecting increased debt as a proportion of total capital structure.

Debt to capital (including operating lease liability)

Including operating lease liabilities, the debt to capital ratio follows the same rising path, from 0.54 in 2018 to 0.70 in 2022, underscoring the role of lease commitments in total financing.

Debt to assets

The debt to assets ratio rises from 0.25 in 2018 to a peak of 0.38 in 2020, then slightly declines to 0.36 by 2022. This signals an increase in leverage against total assets, with a small reduction in the most recent years.

Debt to assets (including operating lease liability)

Similar to the conventional debt to assets ratio, the inclusion of operating lease liabilities raises the ratio from 0.25 in 2018 to 0.38 in 2022, showing a consistent increase in liabilities against assets over the period.

Financial leverage

Financial leverage saw an increase from 4.61 in 2018 to 6.15 in 2022, indicating a growing degree of total asset financing through debt relative to equity.

Interest coverage

Interest coverage ratio experienced a notable decline from 39.73 in 2018 to 21.42 in 2020, before recovering modestly to 25.91 in 2022. Despite this recovery, the ratio remains significantly lower than the initial level, suggesting diminished capacity to cover interest expenses from operating earnings.

Fixed charge coverage

Fixed charge coverage follows a similar pattern to interest coverage, decreasing from 25.01 in 2018 to 16.43 in 2020 and improving slightly to 20.3 in 2022. This indicates a reduced buffer for covering fixed financial obligations during the period, with some recovery in recent years.

Total Debt

The total debt exhibited a consistent upward trend over the five-year period. Starting at US$6,334 million at the end of 2018, it increased annually, reaching US$14,023 million by the end of 2022. The most notable growth occurred between 2019 and 2020, where the debt rose by approximately 48.6%. After 2020, the increase continued at a slower pace but maintained a positive trajectory.

Total Stockholders’ Equity

Stockholders’ equity showed a general increasing trend from 2018 through 2021, growing from US$5,395 million to a peak of US$7,312 million. However, in 2022, there was a decline to US$6,298 million, indicating a reversal in previous equity growth. This downward movement represents a reduction of about 13.9% compared to the prior year.

Debt to Equity Ratio

The debt to equity ratio increased notably throughout the period. Starting at 1.17 in 2018, the ratio climbed steadily, reaching 1.98 by the end of 2020, which signifies a considerable rise in leverage. After a slight decrease to 1.9 in 2021, the ratio rose again to 2.23 in 2022, marking the highest level in the observed period. This increasing trend reflects a growing reliance on debt financing relative to equity.

Total Debt (including operating lease liability)

The total debt shows a consistent upward trend over the five-year period. It increased from US$6,334 million at the end of 2018 to US$14,793 million by the end of 2022. The most significant growth occurred between 2018 and 2020, with the total debt more than doubling. Growth continued at a slower pace between 2021 and 2022, indicating ongoing but moderated leverage increases.

Total Stockholders' Equity

Stockholders' equity also rose from US$5,395 million in 2018 to a peak of US$7,312 million at the end of 2021. However, in 2022, equity declined to US$6,298 million. This indicates positive equity growth in the early years, followed by a notable reduction in the latest period, which may reflect changes in retained earnings, dividends, or other equity components.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio increased from 1.17 in 2018 to 2.35 in 2022, signifying a notable rise in leverage. The ratio more than doubled over the period, with a peak in 2020 at 2.12, a slight improvement in 2021 to 2.01, and then a rise again in 2022. This suggests that while the company initially increased its leverage substantially, it temporarily managed to reduce its relative debt burden before it climbed once more in the final year observed.

Total Debt

The total debt increased consistently over the analyzed period, starting from US$ 6,334 million at the end of 2018 and rising to US$ 14,023 million by the end of 2022. This represents more than a doubling of the debt level within five years, indicating a significant increase in leverage or financing through borrowing.

Total Capital

Total capital also showed a rising trend from US$ 11,729 million in 2018 to a peak of US$ 21,213 million in 2021. However, in 2022 there was a slight decline to US$ 20,321 million. Despite this minor reduction in the final year, the overall trend across the years points to notable growth in the company’s capital base.

Debt to Capital Ratio

The debt to capital ratio reveals a steady increase from 0.54 in 2018 to 0.69 in 2022. This indicates that debt comprises an increasing proportion of the total capital structure. The ratio remained fairly stable at 0.66 in 2020 and 2021 before rising to its highest point of 0.69 in 2022. This trend suggests a gradual shift towards higher financial leverage over time.

Summary

Overall, the data reflects a consistent growth in total debt, a general increase in total capital with a slight dip in the final year, and a rising debt to capital ratio. These patterns suggest an increasing reliance on debt financing relative to equity or other capital components. The shift towards greater leverage might impact the company's financial risk profile and indicates strategic decisions favoring debt-funded growth or operations.

Total Debt (including operating lease liability)

The total debt shows a consistent upward trend throughout the five-year period. Beginning at $6,334 million in 2018, it increased significantly to $9,289 million in 2019, marking a sizeable growth. This upward trajectory continued in the subsequent years, reaching $13,523 million in 2020 and then rising further to $14,673 million in 2021. By the end of 2022, total debt slightly increased to $14,793 million. The data indicates a steady increase in the company's financial leverage over the period.

Total Capital (including operating lease liability)

Total capital also increased over the period under review, starting at $11,729 million in 2018. It rose noticeably to $15,182 million in 2019, then experienced significant growth in 2020, reaching $19,914 million. This growth trend continued into 2021 with total capital at $21,985 million. However, in 2022, a slight decrease was observed as total capital declined to $21,091 million. Despite this minor dip, the general trend over the five years reflects capital expansion.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio began at 0.54 in 2018, indicating that just over half of the company's capital structure was composed of debt. This ratio increased steadily each year to 0.61 in 2019 and further to 0.68 in 2020. A small decrease to 0.67 occurred in 2021, but by 2022 the ratio rose again to 0.70. Overall, the ratio reveals an increasing propensity towards using debt within the capital structure, signaling a gradual shift in financial leverage and potentially greater financial risk.

Summary

The financial data indicate that both total debt and total capital have generally increased over the five-year period, reflecting growth and expansion activities. The rise in the debt to capital ratio suggests an increasing reliance on debt financing relative to total capital, with the ratio moving from just above half to 70 percent. While total capital showed a slight decline in the final year, the overall trend is growth-oriented, accompanied by a concurrent increase in financial leverage. This information could imply a strategic choice to finance growth more through debt, which may affect the company's risk profile.

Total Debt

The total debt exhibited a continuous upward trend over the five-year period, increasing from $6,334 million in 2018 to $14,023 million in 2022. The most significant growth occurred between 2019 and 2020, where total debt surged by approximately 48.6%, reflecting potentially increased borrowing or leveraged financing strategies during that interval. After 2020, the rate of increase moderated but remained positive, indicating sustained use of debt financing.

Total Assets

Total assets also showed consistent growth throughout the period, rising from $24,860 million in 2018 to $38,724 million in 2022. The asset base expanded steadily year-over-year, with an average annual increase of around 9%. This indicates a continuous accumulation of resources and investments, supporting growth initiatives or operational expansion. The pace of asset growth was somewhat more moderate compared to the spike seen in debt between 2019 and 2020.

Debt to Assets Ratio

The debt to assets ratio increased from 0.25 in 2018 to a peak of 0.38 in 2020, aligning with the sharp increase in total debt during that year. This rise indicates a higher leverage level at that point in time. However, from 2020 onwards, the ratio slightly decreased to 0.37 in 2021 and further to 0.36 in 2022, suggesting a modest improvement in the leverage position despite the continuing growth in total debt. The ratio trends imply that while debt levels increased, asset growth partially offset the leverage effect, leading to a more stabilized capital structure post-2020.

Total Debt (Including Operating Lease Liability)

The total debt demonstrated a consistent increase over the five-year period. Beginning at $6,334 million in 2018, it rose to $9,289 million in 2019 and further to $13,523 million in 2020. Growth continued in 2021, reaching $14,673 million, and slightly increased again in 2022 to $14,793 million. The rate of increase slowed in the last two years compared to the earlier period.

Total Assets

Total assets showed a steady upward trend from 2018 through 2022. Starting at $24,860 million in 2018, assets increased each year to reach $29,236 million in 2019 and $33,584 million in 2020. The growth continued in 2021 with $37,669 million and culminated at $38,724 million in 2022. The asset base expanded consistently, although the rate of growth slightly moderated after 2020.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio increased significantly from 0.25 in 2018 to a peak of 0.40 in 2020, reflecting a rising proportion of debt relative to assets during the initial years. In 2021, the ratio slightly decreased to 0.39 and continued a small downward adjustment to 0.38 in 2022, suggesting a modest improvement in balance sheet leverage after the peak in 2020.

Summary

Over the five-year period, debt levels increased considerably, particularly between 2018 and 2020, with a subsequent slowing in growth thereafter. Asset levels rose steadily throughout, supporting the company's expansion or investments. The leverage ratio followed the upward debt trend initially but began to moderate after 2020, indicating a relative stabilization of financial leverage despite ongoing asset growth. These patterns indicate a period of expanding financial activity, with increased borrowing balanced by consistent asset accumulation and a recent move toward maintaining or slightly reducing leverage.

Total Assets

Over the five-year period, total assets showed a consistent upward trend. Starting at 24,860 million USD at the end of 2018, total assets increased annually, reaching 38,724 million USD by the end of 2022. The growth rate appears steady, with the largest yearly increment occurring between 2020 and 2021. This indicates expansion and asset accumulation over time.

Total Stockholders’ Equity

Stockholders’ equity increased from 5,395 million USD in 2018 to a peak of 7,312 million USD in 2021, demonstrating positive equity growth for most years. However, there was a notable decline in 2022, with equity decreasing to 6,298 million USD. This suggests that despite previous gains, equity contraction occurred in the most recent year.

Financial Leverage

The financial leverage ratio showed a generally ascending trajectory from 4.61 times in 2018 to 6.15 times in 2022. After rising steadily until 2020, the ratio slightly declined in 2021 but increased significantly again in 2022. This pattern implies growing use of debt relative to equity, with a minor reduction in leverage in 2021, followed by a substantial increase.

The analysis of the financial data reveals several trends regarding earnings and interest-related metrics over the five-year period ending in 2022.

Earnings before interest and tax (EBIT)

The EBIT displays a generally positive trend, increasing from 7,390 million US dollars in 2018 to 12,203 million US dollars in 2022. Despite a dip in 2020 to 8,140 million US dollars, there is a notable recovery and growth in subsequent years, reaching its highest level in 2022. This suggests improving operational profitability over the evaluated period, with some volatility likely related to external or internal factors impacting 2020.

Interest expense

The interest expense shows a steady upward trend, increasing from 186 million US dollars in 2018 to 471 million US dollars in 2022. This gradual rise indicates a growing cost of borrowing or increased debt levels over time, which may have implications for the company's financial leverage and interest obligations.

Interest coverage ratio

The interest coverage ratio, which measures the company’s ability to meet interest payments through EBIT, starts at a high level of 39.73 in 2018 and peaks at 44.44 in 2019. However, it then declines sharply to 21.42 in 2020, reflecting the reduction in EBIT combined with the increase in interest expenses. Following 2020, the ratio improves to 25.91 by 2022, indicating an enhanced capacity to cover interest expenses, though it remains considerably lower than the levels recorded in 2018 and 2019.

Overall interpretation

The data suggests that while profitability improved substantially by the end of the period, the rising interest expense exerted pressure on interest coverage, particularly noticeable in 2020. The improvement in EBIT after 2020 helped restore some strength to the interest coverage ratio, but the lower ratio compared to earlier years signals increased financial risk relative to the company's ability to service debt. The company appears to be managing increased interest obligations through enhanced earnings, though monitoring of interest cost trends remains crucial.

The financial data reveals several noteworthy trends over the five-year period examined. Earnings before fixed charges and tax demonstrated a generally upward trajectory, increasing from 7,504 million US dollars in 2018 to 12,340 million US dollars in 2022. Despite a dip in 2020 to 8,263 million, earnings showed strong recovery and continuous growth thereafter.

Fixed charges, representing financial obligations such as interest expenses, exhibited a steady increase across the years. They rose from 300 million US dollars in 2018 to 608 million US dollars in 2022. This gradual rise suggests an increasing level of fixed financial commitments.

Regarding the fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings before fixed charges and tax, the ratio started at a robust 25.01 in 2018 and peaked at 31.13 in 2019. However, it significantly declined to 16.43 in 2020, reflecting the impact of decreased earnings in that year. Following this decline, the ratio improved to 19.64 in 2021 and further to 20.3 in 2022 but remained below the initial levels observed in 2018 and 2019.

Overall, the data indicates that while earnings experienced some volatility, notably in 2020, the company managed to enhance its earnings capacity post-2020. Fixed financial obligations consistently increased, and although the ability to cover these obligations was temporarily weakened in 2020, it showed signs of recovery in subsequent years.