Stock Analysis on Net

Visa Inc. (NYSE:V)

This company has been moved to the archive! The financial data has not been updated since April 27, 2023.

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Visa Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017
Operating Assets
Total assets 85,501 82,896 80,919 72,574 69,225 67,977
Less: Cash and cash equivalents 15,689 16,487 16,289 7,838 8,162 9,874
Less: Restricted cash equivalents, U.S. litigation escrow 1,449 894 901 1,205 1,491 1,031
Less: Investment securities 2,833 2,025 3,752 4,236 3,547 3,564
Less: Customer collateral 2,342 2,260 1,850 1,648 1,324 1,106
Operating assets 63,188 61,230 58,127 57,647 54,701 52,402
Operating Liabilities
Total liabilities 49,920 45,307 44,709 37,890 35,219 35,217
Less: Current maturities of debt 2,250 999 2,999 1,749
Less: Long-term debt, excluding current maturities 20,200 19,978 21,071 16,729 16,630 16,618
Operating liabilities 27,470 24,330 20,639 21,161 18,589 16,850
 
Net operating assets1 35,718 36,900 37,488 36,486 36,112 35,552
Balance-sheet-based aggregate accruals2 (1,182) (588) 1,002 374 560
Financial Ratio
Balance-sheet-based accruals ratio3 -3.26% -1.58% 2.71% 1.03% 1.56%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Accenture PLC 21.70% 27.93% 3.73% 42.14%
Adobe Inc. -8.24% 14.14% 8.20% 2.25%
International Business Machines Corp. 1.55% -7.39% -9.64%
Intuit Inc. 85.68% 139.73% -1.39% 29.27%
Microsoft Corp. 42.27% 40.52% 14.41% 46.31%
Oracle Corp. 9.90% 5.62% 1.35% 2.79%
Palo Alto Networks Inc. -124.73% 85.21% 69.06%
Salesforce Inc. 57.74% 10.87% 65.87%
ServiceNow Inc. 12.89% 34.89% 19.95%
Synopsys Inc. 5.01% 0.36% 8.40% 7.93%
Balance-Sheet-Based Accruals Ratio, Sector
Software & Services 29.21% 17.08% 8.21% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 21.79% 21.33% 2.87% 200.00%

Based on: 10-K (reporting date: 2022-09-30), 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).

1 2022 Calculation
Net operating assets = Operating assets – Operating liabilities
= 63,18827,470 = 35,718

2 2022 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2022 – Net operating assets2021
= 35,71836,900 = -1,182

3 2022 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -1,182 ÷ [(35,718 + 36,900) ÷ 2] = -3.26%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Visa Inc. deteriorated earnings quality from 2021 to 2022.

Cash-Flow-Statement-Based Accruals Ratio

Visa Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017
Net income 14,957 12,311 10,866 12,080 10,301 6,699
Less: Net cash provided by operating activities 18,849 15,227 10,440 12,784 12,713 9,208
Less: Net cash (used in) provided by investing activities (4,288) (152) 1,427 (591) (3,084) 735
Cash-flow-statement-based aggregate accruals 396 (2,764) (1,001) (113) 672 (3,244)
Financial Ratio
Cash-flow-statement-based accruals ratio1 1.09% -7.43% -2.71% -0.31% 1.88%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Accenture PLC 11.87% 11.80% -13.65% -1.28%
Adobe Inc. -19.93% 9.21% -0.48% -9.78%
International Business Machines Corp. -7.22% -1.64% -13.41%
Intuit Inc. 25.60% 58.72% -34.22% -15.95%
Microsoft Corp. 13.42% 17.68% -8.19% 7.37%
Oracle Corp. -30.58% 25.81% -31.35% -74.80%
Palo Alto Networks Inc. -196.64% -68.30% -488.47%
Salesforce Inc. 21.96% 10.57% -5.62%
ServiceNow Inc. 8.80% -21.14% -12.82%
Synopsys Inc. -4.64% -4.88% 0.92% -0.96%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Software & Services 2.20% 12.17% -14.79% -3.07%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology 3.82% 10.69% -8.36% -22.15%

Based on: 10-K (reporting date: 2022-09-30), 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).

1 2022 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 396 ÷ [(35,718 + 36,900) ÷ 2] = 1.09%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Visa Inc. improved earnings quality from 2021 to 2022.