Stock Analysis on Net

Visa Inc. (NYSE:V)

Analysis of Income Taxes

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Income Tax Expense (Benefit)

Visa Inc., income tax expense (benefit), continuing operations

US$ in millions

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12 months ended: Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
U.S. federal 1,943  1,662  1,504  2,819  2,377  2,250 
State and local 69  212  243  219  291  181 
Non-U.S. 869  743  843  754  629  368 
Current taxes 2,881  2,617  2,590  3,792  3,297  2,799 
U.S. federal (57) 42  184  (1,214) 1,607  (508)
State and local (28) 28  (96) 66  (63)
Non-U.S. 956  256  23  25  (207)
Deferred taxes 871  307  214  (1,287) 1,698  (778)
Income tax provision 3,752  2,924  2,804  2,505  4,995  2,021 

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

Item Description The company
Current taxes Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Visa Inc. current taxes increased from 2019 to 2020 and from 2020 to 2021.
Deferred taxes Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Visa Inc. deferred taxes increased from 2019 to 2020 and from 2020 to 2021.
Income tax provision Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Visa Inc. income tax provision increased from 2019 to 2020 and from 2020 to 2021.

Effective Income Tax Rate (EITR)

Visa Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
U.S. federal income tax statutory rate 21.00% 21.00% 21.00% 25.00% 35.00% 35.00%
State income taxes, net of federal benefit 1.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Non-U.S. tax effect, net of federal benefit -3.00% -4.00% -4.00% -4.00% -5.00% -7.00%
Transition tax on foreign earnings 0.00% 0.00% 0.00% 9.00% 0.00% 0.00%
Remeasurement of deferred tax balances 6.00% 2.00% 0.00% -9.00% 0.00% -1.00%
Conclusion of audits -2.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Revaluation of Visa Europe put option 0.00% 0.00% 0.00% 0.00% 0.00% -1.00%
Reorganization of Visa Europe and other legal entities 0.00% 0.00% 0.00% 0.00% 13.00% 0.00%
Other, net 0.00% 0.00% 0.00% -3.00% -2.00% -3.00%
Effective income tax rate 23.00% 21.00% 19.00% 20.00% 43.00% 25.00%

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Visa Inc. effective income tax rate increased from 2019 to 2020 and from 2020 to 2021.

Components of Deferred Tax Assets and Liabilities

Visa Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
Accrued compensation and benefits 166  114  117  135  194  277 
Accrued litigation obligation 234  204  273  329  373  373 
Client incentives 327  121  125  213  272  266 
Net operating loss carryforwards 104  80  65  34  45  32 
Comprehensive loss 106  148  33  17  29  106 
Federal benefit of state taxes 157  203  148  120  236  195 
Federal benefit of foreign taxes —  —  —  —  —  1,214 
Other 55  12  127  193  280 
Deferred tax assets, before valuation allowance 1,149  882  767  975  1,342  2,743 
Valuation allowance (103) (84) (69) (34) (35) (31)
Deferred tax assets 1,046  798  698  941  1,307  2,712 
Property, equipment and technology, net (346) (343) (314) (286) (391) (278)
Intangible assets (6,452) (5,492) (4,983) (5,153) (6,756) (7,013)
Unrealized gains on equity securities (203) —  —  —  —  — 
Foreign taxes (93) (137) (184) (106) (59) (106)
Other —  —  —  —  —  (101)
Deferred tax liabilities (7,094) (5,972) (5,481) (5,545) (7,206) (7,498)
Net deferred tax assets (liabilities) (6,048) (5,174) (4,783) (4,604) (5,899) (4,786)

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

Item Description The company
Deferred tax assets, before valuation allowance Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Visa Inc. deferred tax assets, before valuation allowance increased from 2019 to 2020 and from 2020 to 2021.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Visa Inc. deferred tax assets increased from 2019 to 2020 and from 2020 to 2021.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Visa Inc. net deferred tax assets (liabilities) decreased from 2019 to 2020 and from 2020 to 2021.

Deferred Tax Assets and Liabilities, Classification

Visa Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
Net deferred tax assets (reflected in Other assets) 80  63  24  14  81  22 
Deferred tax liabilities 6,128  5,237  4,807  4,618  5,980  4,808 

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

Item Description The company
Net deferred tax assets (reflected in Other assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Visa Inc. net deferred tax assets (reflected in Other assets) increased from 2019 to 2020 and from 2020 to 2021.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Visa Inc. deferred tax liabilities increased from 2019 to 2020 and from 2020 to 2021.

Adjustments to Financial Statements: Removal of Deferred Taxes

Visa Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
Adjustment to Total Assets
Total assets (as reported) 82,896  80,919  72,574  69,225  67,977  64,035 
Less: Noncurrent deferred tax assets, net 80  63  24  14  81  22 
Total assets (adjusted) 82,816  80,856  72,550  69,211  67,896  64,013 
Adjustment to Total Liabilities
Total liabilities (as reported) 45,307  44,709  37,890  35,219  35,217  31,123 
Less: Noncurrent deferred tax liabilities, net 6,128  5,237  4,807  4,618  5,980  4,808 
Total liabilities (adjusted) 39,179  39,472  33,083  30,601  29,237  26,315 
Adjustment to Equity
Equity (as reported) 37,589  36,210  34,684  34,006  32,760  32,912 
Less: Net deferred tax assets (liabilities) (6,048) (5,174) (4,783) (4,604) (5,899) (4,786)
Equity (adjusted) 43,637  41,384  39,467  38,610  38,659  37,698 
Adjustment to Net Income
Net income (as reported) 12,311  10,866  12,080  10,301  6,699  5,991 
Add: Deferred income tax expense (benefit) 871  307  214  (1,287) 1,698  (778)
Net income (adjusted) 13,182  11,173  12,294  9,014  8,397  5,213 

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).


Visa Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Visa Inc., adjusted financial ratios

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Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
Net Profit Margin
Reported net profit margin 51.07% 49.74% 52.57% 49.98% 36.49% 39.72%
Adjusted net profit margin 54.69% 51.14% 53.51% 43.74% 45.74% 34.56%
Total Asset Turnover
Reported total asset turnover 0.29 0.27 0.32 0.30 0.27 0.24
Adjusted total asset turnover 0.29 0.27 0.32 0.30 0.27 0.24
Financial Leverage
Reported financial leverage 2.21 2.23 2.09 2.04 2.08 1.95
Adjusted financial leverage 1.90 1.95 1.84 1.79 1.76 1.70
Return on Equity (ROE)
Reported ROE 32.75% 30.01% 34.83% 30.29% 20.45% 18.20%
Adjusted ROE 30.21% 27.00% 31.15% 23.35% 21.72% 13.83%
Return on Assets (ROA)
Reported ROA 14.85% 13.43% 16.65% 14.88% 9.85% 9.36%
Adjusted ROA 15.92% 13.82% 16.95% 13.02% 12.37% 8.14%

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Visa Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Visa Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Visa Inc. adjusted financial leverage ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Visa Inc. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Visa Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Visa Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 12,311  10,866  12,080  10,301  6,699  5,991 
Net revenues 24,105  21,846  22,977  20,609  18,358  15,082 
Profitability Ratio
Net profit margin1 51.07% 49.74% 52.57% 49.98% 36.49% 39.72%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 13,182  11,173  12,294  9,014  8,397  5,213 
Net revenues 24,105  21,846  22,977  20,609  18,358  15,082 
Profitability Ratio
Adjusted net profit margin2 54.69% 51.14% 53.51% 43.74% 45.74% 34.56%

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

2021 Calculations

1 Net profit margin = 100 × Net income ÷ Net revenues
= 100 × 12,311 ÷ 24,105 = 51.07%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenues
= 100 × 13,182 ÷ 24,105 = 54.69%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Visa Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net revenues 24,105  21,846  22,977  20,609  18,358  15,082 
Total assets 82,896  80,919  72,574  69,225  67,977  64,035 
Activity Ratio
Total asset turnover1 0.29 0.27 0.32 0.30 0.27 0.24
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net revenues 24,105  21,846  22,977  20,609  18,358  15,082 
Adjusted total assets 82,816  80,856  72,550  69,211  67,896  64,013 
Activity Ratio
Adjusted total asset turnover2 0.29 0.27 0.32 0.30 0.27 0.24

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

2021 Calculations

1 Total asset turnover = Net revenues ÷ Total assets
= 24,105 ÷ 82,896 = 0.29

2 Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 24,105 ÷ 82,816 = 0.29

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Visa Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 82,896  80,919  72,574  69,225  67,977  64,035 
Equity 37,589  36,210  34,684  34,006  32,760  32,912 
Solvency Ratio
Financial leverage1 2.21 2.23 2.09 2.04 2.08 1.95
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 82,816  80,856  72,550  69,211  67,896  64,013 
Adjusted equity 43,637  41,384  39,467  38,610  38,659  37,698 
Solvency Ratio
Adjusted financial leverage2 1.90 1.95 1.84 1.79 1.76 1.70

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

2021 Calculations

1 Financial leverage = Total assets ÷ Equity
= 82,896 ÷ 37,589 = 2.21

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity
= 82,816 ÷ 43,637 = 1.90

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Visa Inc. adjusted financial leverage ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 12,311  10,866  12,080  10,301  6,699  5,991 
Equity 37,589  36,210  34,684  34,006  32,760  32,912 
Profitability Ratio
ROE1 32.75% 30.01% 34.83% 30.29% 20.45% 18.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 13,182  11,173  12,294  9,014  8,397  5,213 
Adjusted equity 43,637  41,384  39,467  38,610  38,659  37,698 
Profitability Ratio
Adjusted ROE2 30.21% 27.00% 31.15% 23.35% 21.72% 13.83%

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

2021 Calculations

1 ROE = 100 × Net income ÷ Equity
= 100 × 12,311 ÷ 37,589 = 32.75%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted equity
= 100 × 13,182 ÷ 43,637 = 30.21%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Visa Inc. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 12,311  10,866  12,080  10,301  6,699  5,991 
Total assets 82,896  80,919  72,574  69,225  67,977  64,035 
Profitability Ratio
ROA1 14.85% 13.43% 16.65% 14.88% 9.85% 9.36%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 13,182  11,173  12,294  9,014  8,397  5,213 
Adjusted total assets 82,816  80,856  72,550  69,211  67,896  64,013 
Profitability Ratio
Adjusted ROA2 15.92% 13.82% 16.95% 13.02% 12.37% 8.14%

Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).

2021 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 12,311 ÷ 82,896 = 14.85%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 13,182 ÷ 82,816 = 15.92%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Visa Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.