Visa Inc. (NYSE:V)

The analysis of the annual current and deferred income tax expense data over the six-year period reveals several notable trends and fluctuations.

Current Taxes

Current tax expenses show an overall upward trend from 2017 through 2022, increasing from 3,297 million to 3,515 million US dollars. The expense peaked in 2018 at 3,792 million before experiencing a significant decline in 2019 to 2,590 million. From 2019 onwards, there is a gradual recovery, with minor fluctuations, culminating in the highest value in 2022.

Deferred Taxes

The deferred tax amounts demonstrate considerable volatility and lack a consistent directional trend. In 2017, deferred taxes were positive at 1,698 million but turned sharply negative in 2018 (-1,287 million), indicating a reversal or adjustment in deferred tax liabilities or assets. The subsequent years show moderate positive values until 2021, with a notable resurgence to 871 million. However, in 2022, deferred taxes again move into negative territory (-336 million), suggesting fluctuations in timing differences or tax rate assumptions impacting deferred tax calculations.

Income Tax Provision

The total income tax provision, which combines current and deferred taxes, presents a complex pattern. It starts high at 4,995 million in 2017, then declines sharply by 2018 to 2,505 million. From 2018 to 2021, the provision steadily increases, reaching a peak of 3,752 million. In 2022, there is a slight reduction to 3,179 million. This pattern reflects the interplay between current and deferred tax components, where the volatility in deferred taxes particularly influences the overall provision.

In summary, the current income tax expense exhibits a general upward trajectory with some year-on-year variability, whereas deferred taxes fluctuate more dramatically, indicating potential changes in tax planning, timing differences, or tax regulation effects over the years. The aggregate income tax provision mirrors these dynamics, showing an initial decline followed by recovery and moderate variation in the later years.

The data reveals significant variations and trends in the tax-related components over the analyzed periods.

U.S. Federal Income Tax Statutory Rate

This rate shows a marked decline from 35% in 2017 to a consistent 21% from 2019 onward, reflecting a structural change in U.S. tax policy.

State Income Taxes, Net of Federal Benefit

State taxes have remained largely stable at 2% during 2017 to 2020, then decreased slightly to 1% in the last two years, indicating a minor reduction in state tax burden relative to federal benefit.

Non-U.S. Tax Effect, Net of Federal Benefit

The non-U.S. tax effect has remained negative across all years, gradually improving from -5% in 2017 to -3% in 2021 and 2022, suggesting a slightly reduced net tax impact from foreign operations after federal benefit.

Transition Tax on Foreign Earnings

This item appears only in 2018 at 9%, indicating a one-time tax event related to foreign earnings transition, likely associated with a tax reform or repatriation effort.

Remeasurement of Deferred Tax Balances

This fluctuated notably, with a -9% impact in 2018, a 2% increase in 2020, and a higher 6% increase in 2021, indicating adjustments in deferred tax assets and liabilities affecting reported taxes variably across periods.

Conclusion of Audits

A negative 2% adjustment appears in 2021, pointing to a reduction in tax liabilities or favorable audit resolutions during that year.

State Tax Apportionment Position

This factor shows a -1% influence in 2022, suggesting a slight beneficial adjustment or correction related to state tax allocations.

Reorganization of Visa Europe and Other Legal Entities

Present only in 2017 at 13%, this item represents a significant tax-related impact from structural corporate changes, absent in later years.

Other, Net

Other miscellaneous effects have a small negative impact (-2% and -3%) in 2017 and 2018 but are not recorded thereafter.

Effective Income Tax Rate

The effective tax rate shows substantial volatility, starting very high at 43% in 2017, dropping sharply to 20% in 2018, and stabilizing in the range of 18% to 23% from 2019 to 2022. This pattern reflects the combined influences of statutory rate changes, special tax events, and adjustments noted above.

Overall, the data indicate a significant structural shift due to tax reforms primarily between 2017 and 2018, with more stable and lower effective tax rates in subsequent years supported by consistent statutory rates and moderating effects from deferred tax remeasurements and audit conclusions.

The financial data over the six-year period reveals several noteworthy trends and fluctuations across different items.

Accrued Compensation and Benefits

This liability generally decreased from 2017 to 2020, reaching its lowest point in 2020, before increasing again in 2021 and 2022. This suggests a reduction in accrued expenses followed by a resurgence, possibly reflecting changes in workforce costs or accrual policies.

Accrued Litigation Obligation

A clear downward trend is observed from 2017 through 2020, indicating a reduction in anticipated legal liabilities, but a notable increase occurs in 2021 and 2022, which may indicate new or unresolved legal challenges.

Client Incentives

This item shows significant volatility with an initial decline through 2019 and 2020, followed by a sharp increase in 2021 and 2022. The substantial growth in recent years may reflect intensified marketing or client retention efforts.

Net Operating Loss Carryforwards

A consistent upward trend is visible, increasing steadily each year. This accumulation might indicate growing tax loss carryforwards, potentially usable to offset future taxable income.

Comprehensive Loss

The comprehensive loss values fluctuate, peaking sharply in 2020, suggesting significant economic or accounting impacts that year, before decreasing notably in subsequent years.

Federal Benefit of State Taxes

This item varies substantially, with no clear linear trend, peaking in 2020 before declining over the next two years. The fluctuations could reflect varied state tax benefits or accounting adjustments over time.

Other

The ‘Other’ category declines substantially from 2017 to 2019, followed by a gradual increase through 2022, indicating smaller or more irregular miscellaneous items fluctuating in scale.

Deferred Tax Assets, before Valuation Allowance

A decreasing trend is seen from 2017 through 2019, followed by a recovery and increase through 2022. This may suggest improving expectations for future tax benefits.

Valuation Allowance

The valuation allowance consistently increases in magnitude (becoming more negative), indicating a growing reserve against deferred tax assets, which may imply increased uncertainty about realizing these tax benefits.

Deferred Tax Assets

These closely mirror the pattern of deferred tax assets before valuation allowance, declining initially and then increasing toward 2022, reflecting adjustments net of valuation allowances.

Property, Equipment, and Technology, net

The net value becomes progressively more negative over time, indicating ongoing capital expenditures or depreciation exceeding disposals and amortizations.

Intangible Assets

Though fluctuating, intangible assets remain significantly negative and do not show a clear recovery trend, with a notable decline in 2021. This may reflect amortization or impairment charges.

Unrealized Gains on Equity Securities

Data is absent until 2021, where a negative balance appears, suggesting unrealized losses, which slightly improve in 2022 but remain negative.

Foreign Taxes

This liability fluctuates, becoming more negative from 2017 to 2019, then showing a trend of recovery through 2022, potentially reflecting changes in foreign tax obligations or deferrals.

Deferred Tax Liabilities

These liabilities show a pattern similar to intangible assets, being consistently substantial and negative, with periodic fluctuations, indicating ongoing deferred tax obligations associated with long-term assets or income timing differences.

Net Deferred Tax Assets (Liabilities)

The net figure remains negative throughout all years, reflecting a net deferred tax liability position. This net liability increases in size until 2021 before reducing somewhat in 2022, indicating adjustments in the balance between deferred tax assets and liabilities.

The analysis of the deferred tax-related financial items over the specified periods reveals distinct trends in both net deferred tax assets and deferred tax liabilities.

Net Deferred Tax Assets

The net deferred tax assets, reflected within other assets, show considerable fluctuations across the years. Initially, there is a sharp decline from 81 million US dollars in 2017 to 14 million US dollars in 2018. Following this dip, the figure exhibits a recovery pattern, increasing to 24 million dollars in 2019 and further rising to 63 million dollars in 2020. This upward trend continues moderately, reaching 80 million in 2021 and 87 million in 2022. Overall, the net deferred tax assets demonstrate some volatility but trend upward in the latter years.

Deferred Tax Liabilities

Deferred tax liabilities show a generally decreasing trend across the period, with some variation. Starting at 5,980 million US dollars in 2017, there is a noticeable drop to 4,618 million in 2018. The subsequent years show slight fluctuations: an increase to 4,807 million in 2019, a rise to 5,237 million in 2020, then a peak at 6,128 million in 2021, followed by a decline to 5,332 million in 2022. Despite fluctuations, deferred tax liabilities remain at high absolute values, though the 2022 figure is lower than the initial 2017 level.

In summary, net deferred tax assets experienced a significant dip early on, with a consistent recovery thereafter, while deferred tax liabilities, although fluctuating, display an overall downward trend from 2017 to 2022. This pattern may suggest changes in tax positions or timing differences affecting the company's deferred tax accounting during the period under review.

The financial data reflects a consistent growth pattern in the company's total assets over the six-year period, with reported total assets increasing from approximately $67.98 billion in 2017 to $85.5 billion in 2022. The adjusted total assets closely mirror this trend, showing a slight but consistent gap below the reported figures, indicating minor adjustments primarily related to income tax considerations that slightly reduce the asset base.

Total liabilities exhibit a significant upward trajectory throughout the analyzed period. Reported liabilities rose from $35.2 billion in 2017 to $49.9 billion in 2022, demonstrating an overall increase in the company's obligations. However, adjusted total liabilities display a more moderate increase from $29.2 billion to $44.6 billion over the same time frame, suggesting notable adjustments that reduce the reported liabilities by accounting for deferred income taxes or other tax-related timing differences.

Regarding equity, the reported figures show a steady growth from $32.8 billion in 2017, peaking at $37.6 billion in 2021, followed by a decrease to $35.6 billion in 2022. In contrast, the adjusted equity consistently starts at a higher base than the reported equity, increasing from $38.6 billion in 2017 to a peak of $43.6 billion in 2021, before declining to $40.8 billion in 2022. This divergence suggests that income tax adjustments enhance the equity position, though both reported and adjusted equity reflect a slight reduction in the final year analyzed.

Net income presents a positive upward trend in both reported and adjusted data sets. Reported net income increased from $6.7 billion in 2017 to $14.96 billion in 2022, with a minor dip in 2020 likely related to broader economic impacts. Adjusted net income follows a somewhat smoother growth trajectory, rising from $8.4 billion to $14.6 billion over the same period. Notably, adjusted net income exceeds reported net income in most years except 2019, indicating greater profitability after adjustments for income taxes.

Overall, the data indicates robust asset growth accompanied by rising liabilities, with income tax adjustments playing a moderate role in reshaping the balance sheet components. The upward trend in net income, both reported and adjusted, underscores improving operational profitability, with adjusted figures suggesting a more favorable profitability outlook after considering tax effects. The decrease in equity in 2022 across both reported and adjusted measures warrants additional attention to understand the underlying factors contributing to this change after a period of growth.

Total assets

Consistent growth over the period, with adjusted totals closely tracking reported values but slightly lower.

Total liabilities

Marked increase with reported liabilities rising more sharply than adjusted liabilities, indicating significant tax or timing adjustments.

Equity

Steady growth until 2021, followed by a decrease in 2022. Adjusted equity consistently exceeds reported equity, highlighting the impact of income tax adjustments.

Net income

General upward trend with adjusted net income surpassing reported figures in most years, reflecting enhanced profitability after tax adjustments.

The financial data exhibits several notable trends in profitability, efficiency, and leverage ratios over the six-year period ending September 30, 2022.

Net Profit Margin

The reported net profit margin shows an upward trend from 36.49% in 2017 to a peak above 52% in 2019, followed by a slight decline and stabilization around 51% in the subsequent years. The adjusted net profit margin, which accounts for deferred income tax adjustments, fluctuates somewhat differently, starting higher at 45.74% in 2017, declining to 43.74% in 2018, then rising sharply to 53.51% in 2019. It remains elevated through 2021, peaking at 54.69%, before decreasing to 49.88% in 2022. This suggests that after tax adjustments, profitability experienced more pronounced variability, particularly with an above 54% margin in 2021 before a moderate decline.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios are identical throughout the period, indicating consistency in the measurement or absence of tax adjustments impact on this metric. The ratio starts at 0.27 in 2017, gradually improves to 0.32 by 2019, drops back to 0.27 in 2020, and then increases again, reaching 0.34 by 2022. This pattern reveals an overall improvement in asset utilization efficiency, with a minor dip in 2020 possibly due to external factors impacting the business environment.

Financial Leverage

The reported financial leverage ratio remains relatively stable at around 2.0 from 2017 to 2019, then steadily increases to reach 2.40 in 2022. The adjusted financial leverage, which appears lower initially, rises gradually from 1.76 in 2017 to 2.09 in 2022. The rising leverage ratios imply increasing use of debt or other liabilities in the capital structure, more pronounced when considering adjusted figures. This upward trend may contribute to the enhanced return on equity observed over the period.

Return on Equity (ROE)

Reported ROE experiences a robust increase from 20.45% in 2017 to 34.83% in 2019, followed by a slight dip and recovery to a peak of 42.04% in 2022. Adjusted ROE is consistently lower than reported ROE but displays a similar trend with growth from 21.72% in 2017 to 31.15% in 2019, a decrease in 2020, and a rise to 35.81% in 2022. The divergence between reported and adjusted figures narrows over time, indicating that tax adjustments have less impact on equity returns in later years. The increase in ROE aligns with rising financial leverage and asset turnover improvements, suggesting effective use of financial and operational resources to enhance shareholder returns.

Return on Assets (ROA)

Reported ROA increases from 9.85% in 2017 to a peak of 16.65% in 2019, declines to 13.43% in 2020, and then recovers to 17.49% by 2022. Adjusted ROA follows a similar but slightly smoother trajectory, rising from 12.37% to 16.95% by 2019, dipping in 2020, and climbing to 17.12% in 2022. The gap between reported and adjusted ROA narrows in later years. The patterns indicate rising asset efficiency and profitability, with a temporary setback in 2020, likely associated with external disruptions during that year.

Overall, the company demonstrates strong profitability metrics with improving efficiency and moderately increasing leverage over the examined period. The temporary declines noted in 2020 across several performance indicators likely reflect extraordinary conditions during that timeframe but are followed by recovery and continued growth through 2022. Adjusted figures generally trend closely with reported ones, with occasional deviations highlighting the impact of income tax adjustments on measured financial outcomes.

Reported Net Income

The reported net income demonstrates a generally positive trend over the period analyzed. Starting at 6,699 million US dollars in 2017, it increased notably to 10,301 million in 2018, followed by a further rise to 12,080 million in 2019. A slight decrease is observed in 2020 reaching 10,866 million, after which there is a renewed upward trajectory to 12,311 million in 2021 and further to 14,957 million in 2022. This pattern suggests a recovery and growth phase after a dip in 2020.

Adjusted Net Income

Adjusted net income shows more variability compared to reported net income. It starts higher than reported net income at 8,397 million in 2017 but then declines to 9,014 million in 2018. In 2019, it peaks at 12,294 million before falling again to 11,173 million in 2020. Subsequent years show an increase to 13,182 million in 2021 and a slight decline to 14,621 million in 2022. The adjusted figures tend to be higher than the reported figures but exhibit fluctuations that may reflect the impact of tax-related adjustments or other non-operating items.

Reported Net Profit Margin

The reported net profit margin shows a strong upward trend from 36.49% in 2017 to a peak of 52.57% in 2019. There is a slight decline to 49.74% in 2020, followed by a modest increase to around 51% in the subsequent two years (51.07% in 2021 and 51.03% in 2022). Despite some fluctuations, the margin remains robust above 49% from 2018 onward, indicating effective profitability maintenance relative to revenue.

Adjusted Net Profit Margin

The adjusted net profit margin exhibits a somewhat different trajectory. Initially at 45.74% in 2017, it declines to 43.74% in 2018, before rising sharply to 53.51% in 2019. The margin remains relatively stable around this high level through 2020 (51.14%) and peaks at 54.69% in 2021. However, in 2022, it decreases to 49.88%. This fluctuation suggests variability in the effects of adjustments made to reported income, which could include deferred tax items or other adjustments impacting profitability.

Overall Insights

The analysis reveals that both reported and adjusted net incomes generally increased over the six-year period, with a notable dip in 2020 likely reflecting external challenges or economic conditions affecting earnings. Profit margins, both reported and adjusted, improved considerably until 2019, sustained high profitability levels, and showed slight contractions in recent years. Adjusted figures consistently exceed reported amounts, indicating significant adjustments affecting net income. The observed trends imply resilience and profitability strength, although certain fluctuations suggest sensitivity to accounting and tax-related adjustments.

An analysis of the annual financial data reflecting reported and deferred income tax adjustments reveals several notable trends over the six-year period ending in 2022.

Total Assets

The reported total assets exhibit a steady upward trajectory from 67,977 million US dollars in 2017 to 85,501 million US dollars in 2022. This growth indicates a consistent expansion in the asset base, with the most significant increases occurring between 2019 and 2020, as well as continuing increases thereafter.

The adjusted total assets, which account for deferred income tax considerations, closely mirror the reported figures, with marginally lower values each year. This proximity suggests that deferred tax adjustments have a minimal impact on the total asset valuation but still maintain a consistent pattern aligned with the reported data over time.

Total Asset Turnover

The reported total asset turnover ratio illustrates variability, starting at 0.27 in 2017 and experiencing a peak of 0.32 in 2019. It then dips back to 0.27 in 2020 before gradually increasing to 0.34 in 2022. This pattern signals fluctuations in the efficiency with which assets are utilized to generate revenue, with the most recent years reflecting improved asset use efficiency.

Similar to total assets, the adjusted total asset turnover ratios match the reported figures exactly, indicating that adjustments related to deferred income taxes do not affect the operational efficiency metrics captured by this ratio.

Overall, the data depict a company experiencing steady growth in its asset base alongside improving efficiency in asset utilization in recent years. The minimal differences between reported and adjusted figures imply that deferred income tax adjustments have little influence on these key financial metrics, suggesting transparency and consistency in asset reporting and operational performance over the analyzed period.

The analyzed financial data presents key balance sheet items and related ratios for a six-year period, from September 2017 through September 2022. The focus is on total assets, equity, and financial leverage, both in reported figures and adjusted for annual reported and deferred income tax effects.

Total Assets

The reported total assets displayed a consistent upward trend over the observed period, increasing from approximately US$67,977 million in 2017 to US$85,501 million in 2022. The adjusted total assets follow a very similar path, starting at slightly lower levels but nearly parallel, increasing from US$67,896 million to US$85,414 million during the same interval. This steady growth indicates ongoing asset expansion or acquisition, with the minor differences between reported and adjusted figures suggesting modest tax-related adjustments.

Equity

Reported equity grew moderately from US$32,760 million in 2017 to a peak of US$37,589 million in 2021, then decreased to US$35,581 million in 2022. In contrast, adjusted equity values started significantly higher, at US$38,659 million in 2017, increased steadily to US$43,637 million by 2021, before declining to US$40,826 million in 2022. This divergence between reported and adjusted equity suggests that deferred tax adjustments or reclassifications notably affect equity measurements, especially evident in the higher adjusted equity levels throughout the period.

Financial Leverage

Financial leverage ratios show a clear upward trend over the six years, indicating increasing use of debt relative to equity. The reported financial leverage ratio rose from 2.08 in 2017 to 2.40 in 2022, with a peak near 2.23 in 2020 and slight variation thereafter. Adjusted financial leverage was consistently lower than reported figures, beginning at 1.76 in 2017 and increasing steadily to 2.09 by 2022. The growth in both measures suggests a gradual increase in leverage, but adjusted leverage presents a less leveraged profile compared to reported data, reflecting the influence of tax-related adjustments on equity or asset bases.

In summary, the company's total assets consistently increased over the reported period, with minor differences between reported and adjusted figures. Equity showed growth until 2021 followed by a decline in 2022, with adjustments significantly affecting the equity levels reported. Financial leverage ratios indicate an incremental increase in leverage, although adjusted leverage consistently reflects a more conservative measurement compared to reported figures. These patterns highlight the importance of considering tax-related adjustments when assessing financial leverage and equity quality.

The financial data over the six-year period exhibits several noteworthy trends and patterns in terms of income, equity, and return on equity (ROE), both on a reported basis and an adjusted basis for income tax considerations.

Net Income Trends

Reported net income shows a general upward trend, increasing from 6,699 million USD in 2017 to 14,957 million USD in 2022. Notably, there was a dip in 2020, where reported net income decreased to 10,866 million USD from 12,080 million USD in 2019, before recovering and reaching the highest value in 2022. Adjusted net income follows a similar pattern, starting at 8,397 million USD in 2017, fluctuating slightly in the following years, and peaking at 14,621 million USD in 2022. The adjusted figures generally exhibit a smoother growth trajectory, indicating the impact of deferred income tax adjustments on net income measurement.

Equity Levels

Reported equity displays modest growth from 32,760 million USD in 2017 to a peak of 37,589 million USD in 2021, with a decline to 35,581 million USD by 2022. Meanwhile, adjusted equity shows a more consistent increase, rising from 38,659 million USD in 2017 to a high of 43,637 million USD in 2021, followed by a slight decrease to 40,826 million USD in 2022. This divergence suggests that tax adjustments have a significant cumulative effect, leading to higher adjusted equity values compared to reported equity.

Return on Equity (ROE) Observations

Reported ROE demonstrates considerable variability but an overall upward trend, increasing from 20.45% in 2017 to 42.04% in 2022, despite a slight dip in 2020 to 30.01%. Adjusted ROE also shows growth but at a more moderate pace, moving from 21.72% in 2017 to 35.81% in 2022. The variation between reported and adjusted ROE indicates that tax adjustments moderate the calculated profitability relative to equity, reducing volatility and smoothing returns.

Comparative Insights

The adjusted figures for net income and equity are consistently higher than their reported counterparts, reflecting the impact of deferred income tax accounting on the company’s financials. The adjusted ROE, while generally lower than reported ROE, provides a potentially more conservative measure of profitability by considering tax timing differences. The dip observed in 2020 across net income and ROE metrics suggests a period of financial strain or external challenges, with subsequent recovery observable in the following years. Overall, both reported and adjusted data indicate improving profitability and capital base over the long term, despite short-term fluctuations.

Net Income Trends

Reported net income demonstrated a consistent upward trajectory from 2017 to 2022, increasing from 6,699 million USD to 14,957 million USD. Similarly, adjusted net income showed growth, starting at 8,397 million USD in 2017 and reaching 14,621 million USD by 2022. Notably, adjusted net income was higher than reported net income in all years except 2018, where a slight decline occurred compared to 2017.

Total Assets Development

Total assets, both reported and adjusted, increased steadily throughout the period. Reported total assets rose from 67,977 million USD in 2017 to 85,501 million USD in 2022, while adjusted total assets moved from 67,896 million USD to 85,414 million USD in the same span. The minimal differences between reported and adjusted figures suggest consistency in asset valuation after tax adjustments.

Return on Assets (ROA) Analysis

Reported ROA showed significant improvement, starting at 9.85% in 2017, peaking at 17.49% in 2022. Adjusted ROA followed a similar pattern, rising from 12.37% to 17.12% over the six years. The adjusted ROA was generally higher than reported ROA except in 2022, indicating that the deferred income tax adjustments slightly moderated profitability measures based on assets in the latest period.

Overall Insights

Both reported and adjusted figures point to a strong financial performance trend over the six years. Net income growth outpaced asset growth, which contributed to improving ROA values, reflecting enhanced efficiency in asset utilization to generate earnings. The differences between reported and adjusted financial data are relatively minor but reveal the impact of income tax adjustments on profitability metrics and net income calculations.