Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Mastercard Inc., long-term (investment) activity ratios
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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio showed a declining trend from 16.23 in 2018 to 13.26 in 2020, followed by a recovery to 16.76 by 2022. This indicates an initial decrease in efficiency in using fixed assets to generate sales, which improved in the later years, surpassing the 2018 level by 2022.
- Net Fixed Asset Turnover Including Operating Lease Right-of-Use Asset
- This ratio exhibited a significant decline from 16.23 in 2018 to 8.04 in 2020, reflecting the impact of incorporating operating lease assets on the asset base. Subsequent years showed gradual improvement, reaching 11.09 in 2022, though still below the 2018 figure. The lower values compared to the standard net fixed asset turnover suggest that right-of-use assets have increased the asset base, reducing the turnover ratio initially.
- Total Asset Turnover
- The total asset turnover ratio decreased steadily from 0.6 in 2018 to a low of 0.46 in 2020, indicating reduced efficiency in using total assets to generate revenue during this period. After 2020, the ratio improved to 0.57 by 2022, nearing its 2018 level, suggesting enhanced asset utilization in recent years.
- Equity Turnover
- The equity turnover ratio showed an overall upward trend, with a slight decrease from 2.86 in 2019 to 2.39 in 2020, followed by consistent increases to 3.53 in 2022. This pattern indicates progressively more effective use of shareholder equity to generate revenue, reaching its highest efficiency in the latest period analyzed.
Net Fixed Asset Turnover
Mastercard Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 22,237) | 18,884) | 15,301) | 16,883) | 14,950) | |
| Property and equipment, net | 1,327) | 1,236) | 1,154) | 1,117) | 921) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 16.76 | 15.28 | 13.26 | 15.11 | 16.23 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Accenture PLC | 37.12 | 30.83 | 28.68 | 31.06 | — | |
| Adobe Inc. | 9.23 | 9.44 | 8.48 | 8.64 | — | |
| Cadence Design Systems Inc. | 9.59 | 9.77 | 8.62 | — | — | |
| CrowdStrike Holdings Inc. | 5.57 | 5.24 | 3.54 | — | — | |
| Fair Isaac Corp. | 78.34 | 47.17 | 27.89 | 21.88 | — | |
| International Business Machines Corp. | 11.35 | 10.07 | 7.33 | — | — | |
| Intuit Inc. | 14.33 | 12.35 | 10.46 | 8.70 | — | |
| Microsoft Corp. | 2.66 | 2.81 | 3.24 | 3.45 | — | |
| Oracle Corp. | 4.37 | 5.74 | 6.26 | — | — | |
| Palantir Technologies Inc. | 27.55 | 49.26 | 36.99 | — | — | |
| Palo Alto Networks Inc. | 15.38 | 13.37 | 9.79 | 9.80 | — | |
| Salesforce Inc. | 9.41 | 8.64 | 7.20 | — | — | |
| ServiceNow Inc. | 6.88 | 7.70 | 6.85 | — | — | |
| Synopsys Inc. | 10.51 | 8.90 | 7.62 | 7.82 | — | |
| Workday Inc. | 4.58 | 4.44 | 3.87 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Software & Services | 4.49 | 4.73 | 5.15 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | 4.44 | 4.74 | 4.57 | — | — | |
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
Net fixed asset turnover = Net revenue ÷ Property and equipment, net
= 22,237 ÷ 1,327 = 16.76
2 Click competitor name to see calculations.
- Net revenue
- Net revenue displayed a generally upward trend over the five-year period. Starting at 14,950 million US dollars in 2018, it increased significantly to 16,883 million in 2019. Although there was a decline in 2020 to 15,301 million, revenue rebounded strongly in the following years, reaching 18,884 million in 2021 and further increasing to 22,237 million in 2022. Overall, net revenue showed resilience and solid growth beyond the temporary dip in 2020.
- Property and equipment, net
- The net value of property and equipment steadily increased each year, moving from 921 million US dollars in 2018 to 1,327 million in 2022. This consistent upward movement suggests ongoing investment in fixed assets throughout the period, contributing to the expansion of the company's asset base.
- Net fixed asset turnover
- The net fixed asset turnover ratio experienced fluctuations during the timeline. Initially, it declined from 16.23 in 2018 to 13.26 in 2020, indicating a reduction in revenue generated per unit of fixed asset. However, the ratio recovered to 15.28 in 2021 and further improved to 16.76 in 2022, surpassing the initial 2018 level. This improvement may reflect enhanced efficiency in utilizing fixed assets to generate revenue in the later years.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Mastercard Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 22,237) | 18,884) | 15,301) | 16,883) | 14,950) | |
| Property and equipment, net | 1,327) | 1,236) | 1,154) | 1,117) | 921) | |
| Operating lease right-of-use assets, net | 679) | 671) | 748) | 711) | —) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 2,006) | 1,907) | 1,902) | 1,828) | 921) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 11.09 | 9.90 | 8.04 | 9.24 | 16.23 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Accenture PLC | 13.17 | 10.48 | 9.37 | 31.06 | — | |
| Adobe Inc. | 7.61 | 7.46 | 6.42 | 8.64 | — | |
| Cadence Design Systems Inc. | 6.57 | 6.85 | 6.04 | — | — | |
| CrowdStrike Holdings Inc. | 4.97 | 4.30 | 3.54 | — | — | |
| Fair Isaac Corp. | 25.38 | 17.51 | 12.44 | 21.88 | — | |
| International Business Machines Corp. | 7.37 | 6.43 | 5.00 | — | — | |
| Intuit Inc. | 8.86 | 8.30 | 8.00 | 8.70 | — | |
| Microsoft Corp. | 2.26 | 2.37 | 2.70 | 2.87 | — | |
| Oracle Corp. | 3.21 | 4.20 | 4.74 | — | — | |
| Palantir Technologies Inc. | 7.07 | 6.21 | 4.43 | — | — | |
| Palo Alto Networks Inc. | 9.17 | 7.32 | 5.62 | 9.80 | — | |
| Salesforce Inc. | 4.65 | 3.75 | 3.16 | — | — | |
| ServiceNow Inc. | 4.18 | 4.34 | 4.06 | — | — | |
| Synopsys Inc. | 4.87 | 4.35 | 3.88 | 7.82 | — | |
| Workday Inc. | 3.75 | 3.11 | 2.96 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Software & Services | 3.50 | 3.58 | 3.82 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | 3.85 | 4.03 | 3.87 | — | — | |
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Net revenue ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 22,237 ÷ 2,006 = 11.09
2 Click competitor name to see calculations.
- Net Revenue
- The net revenue exhibited an overall upward trend from 2018 through 2022. Beginning at $14,950 million in 2018, it increased to $16,883 million in 2019. There was a decline in 2020, with revenue falling to $15,301 million, potentially reflecting broader economic challenges. However, the subsequent years showed a strong recovery and growth, with revenues reaching $18,884 million in 2021 and further increasing to $22,237 million in 2022. This indicates a robust growth trajectory after the temporary setback in 2020.
- Property and Equipment, Net (including operating lease, right-of-use asset)
- The value of property and equipment demonstrated consistent growth over the five-year period. Starting at $921 million in 2018, the value approximately doubled by 2019 to $1,828 million. From 2019 onwards, the increase was more gradual, reaching $1,902 million in 2020, $1,907 million in 2021, and $2,006 million in 2022. This steady rise suggests ongoing investment in physical and leased assets, contributing to the company's operational capacity.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio declined significantly from 16.23 in 2018 to 9.24 in 2019, indicating a substantial drop in efficiency in generating revenue from fixed assets. This downward trend continued into 2020, reaching a low of 8.04. In 2021, the ratio improved to 9.9, followed by a further increase to 11.09 in 2022. Despite the recent improvement, the turnover remains well below the initial 2018 level, suggesting that although revenue has grown, it has not yet fully matched the rate of increase in fixed assets associated with the company's investments in property and equipment.
Total Asset Turnover
Mastercard Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 22,237) | 18,884) | 15,301) | 16,883) | 14,950) | |
| Total assets | 38,724) | 37,669) | 33,584) | 29,236) | 24,860) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.57 | 0.50 | 0.46 | 0.58 | 0.60 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Accenture PLC | 1.30 | 1.17 | 1.20 | 1.45 | — | |
| Adobe Inc. | 0.65 | 0.58 | 0.53 | 0.54 | — | |
| Cadence Design Systems Inc. | 0.69 | 0.68 | 0.68 | — | — | |
| CrowdStrike Holdings Inc. | 0.40 | 0.32 | 0.34 | — | — | |
| Fair Isaac Corp. | 0.96 | 0.84 | 0.81 | 0.81 | — | |
| International Business Machines Corp. | 0.48 | 0.43 | 0.47 | — | — | |
| Intuit Inc. | 0.46 | 0.62 | 0.70 | 1.08 | — | |
| Microsoft Corp. | 0.54 | 0.50 | 0.47 | 0.44 | — | |
| Oracle Corp. | 0.39 | 0.31 | 0.34 | — | — | |
| Palantir Technologies Inc. | 0.55 | 0.47 | 0.41 | — | — | |
| Palo Alto Networks Inc. | 0.45 | 0.42 | 0.38 | 0.44 | — | |
| Salesforce Inc. | 0.28 | 0.32 | 0.31 | — | — | |
| ServiceNow Inc. | 0.54 | 0.55 | 0.52 | — | — | |
| Synopsys Inc. | 0.54 | 0.48 | 0.46 | 0.52 | — | |
| Workday Inc. | 0.49 | 0.50 | 0.53 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Software & Services | 0.53 | 0.49 | 0.48 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Information Technology | 0.65 | 0.62 | 0.58 | — | — | |
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
Total asset turnover = Net revenue ÷ Total assets
= 22,237 ÷ 38,724 = 0.57
2 Click competitor name to see calculations.
- Net Revenue
- Net revenue exhibits a general upward trend over the five-year period. Starting at approximately 14.95 billion US dollars in 2018, revenue increased to nearly 22.24 billion US dollars by the end of 2022. A slight decline was observed in 2020, with revenue decreasing to 15.3 billion, likely reflecting external economic conditions during that year. However, the company rebounded strongly in 2021 and 2022, achieving the highest revenue in the period analyzed.
- Total Assets
- Total assets show consistent growth from 24.86 billion US dollars in 2018 to 38.72 billion in 2022. The increase is steady each year, indicating expansion in the company's asset base. Growth is more pronounced between 2019 and 2021, where assets grew by over 8 billion US dollars, suggesting significant investment or accumulation of resources during this timeframe.
- Total Asset Turnover
- The total asset turnover ratio, which measures efficiency in generating revenue from assets, initially decreased from 0.6 in 2018 to a low of 0.46 in 2020. This decline corresponds with the dip in net revenue and the increase in assets in the same year, reflecting reduced operational efficiency. From 2020 onwards, the ratio improved, reaching 0.57 in 2022, indicating a recovery in the asset utilization efficiency, although it did not quite return to 2018 levels.
Equity Turnover
Mastercard Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 22,237) | 18,884) | 15,301) | 16,883) | 14,950) | |
| Total Mastercard Incorporated stockholders’ equity | 6,298) | 7,312) | 6,391) | 5,893) | 5,395) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 3.53 | 2.58 | 2.39 | 2.86 | 2.77 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Accenture PLC | 2.79 | 2.59 | 2.61 | 3.00 | — | |
| Adobe Inc. | 1.25 | 1.07 | 0.97 | 1.06 | — | |
| Cadence Design Systems Inc. | 1.30 | 1.09 | 1.08 | — | — | |
| CrowdStrike Holdings Inc. | 1.42 | 1.00 | 0.65 | — | — | |
| Fair Isaac Corp. | — | — | 3.91 | 4.00 | — | |
| International Business Machines Corp. | 2.76 | 3.03 | 3.57 | — | — | |
| Intuit Inc. | 0.77 | 0.98 | 1.50 | 1.81 | — | |
| Microsoft Corp. | 1.19 | 1.18 | 1.21 | 1.23 | — | |
| Oracle Corp. | — | 7.73 | 3.24 | — | — | |
| Palantir Technologies Inc. | 0.74 | 0.67 | 0.72 | — | — | |
| Palo Alto Networks Inc. | 26.20 | 6.71 | 3.09 | 1.83 | — | |
| Salesforce Inc. | 0.46 | 0.51 | 0.50 | — | — | |
| ServiceNow Inc. | 1.44 | 1.60 | 1.59 | — | — | |
| Synopsys Inc. | 0.92 | 0.79 | 0.75 | 0.82 | — | |
| Workday Inc. | 1.13 | 1.32 | 1.46 | — | — | |
| Equity Turnover, Sector | ||||||
| Software & Services | 1.44 | 1.44 | 1.51 | — | — | |
| Equity Turnover, Industry | ||||||
| Information Technology | 1.74 | 1.80 | 1.82 | — | — | |
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
Equity turnover = Net revenue ÷ Total Mastercard Incorporated stockholders’ equity
= 22,237 ÷ 6,298 = 3.53
2 Click competitor name to see calculations.
- Net Revenue
- The net revenue exhibited a generally upward trend over the five-year period. Starting at 14,950 million US dollars in 2018, it increased to 16,883 million in 2019, followed by a slight decline to 15,301 million in 2020. Subsequently, the revenue rose significantly to 18,884 million in 2021 and continued this positive trajectory to 22,237 million in 2022. This pattern indicates recovery and strong growth momentum after the dip in 2020.
- Total Stockholders’ Equity
- The total stockholders’ equity consistently grew from 5,395 million US dollars in 2018 to a peak of 7,312 million in 2021. However, in 2022, the equity decreased to 6,298 million. This reversal in 2022 suggests a possible reduction in retained earnings, distributions to shareholders, or other equity-related adjustments after several years of accumulation.
- Equity Turnover Ratio
- The equity turnover ratio showed some variability across the years. It was fairly stable between 2.77 and 2.86 in 2018 and 2019, then declined to 2.39 in 2020. The ratio recovered modestly to 2.58 in 2021 and rose sharply to 3.53 in 2022. The increase in 2022 indicates improved efficiency in generating revenue from shareholders' equity despite the decrease in equity reported that year.
- Overall Insights
- The analysis reveals resilience and growth in revenue generation with an especially strong performance in the most recent year observed. While stockholders’ equity increased steadily for four years, the decline in 2022 merits further investigation. The increasing equity turnover ratio in 2022 suggests higher operational leverage or possibly enhanced asset utilization. These dynamics imply a focus on improving financial efficiency and responsiveness to market conditions over the observed timeframe.