Balance Sheet: Liabilities and Stockholders’ Equity
The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.
Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.
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- Income Statement
- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2008
- Current Ratio since 2008
- Price to Book Value (P/BV) since 2008
- Analysis of Debt
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Visa Inc., consolidated balance sheet: liabilities and stockholders’ equity
US$ in millions
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).
- Liabilities Trends
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Current liabilities have shown a consistent upward trend from 2017 to 2022, increasing from $9,994 million to $20,853 million, nearly doubling over the six-year period. Accounts payable and settlement payable within current liabilities have also increased substantially, with settlement payable exhibiting notable volatility but generally rising, especially significant in 2019 and 2022. Customer collateral and client incentives have steadily increased each year, indicating growing operational activity and commitments.
Accrued compensation and benefits have risen substantially from $757 million in 2017 to $1,359 million in 2022, reflecting potential increases in workforce costs or incentive programs. Accrued liabilities also show a marked increase, particularly sharp in the last two years, reaching $3,726 million in 2022 from $1,129 million in 2017.
Long-term debt, excluding current maturities, remained relatively stable around $16,000-$17,000 million until 2020, when a notable increase to over $21,000 million occurred, followed by a mild decrease ending at $20,200 million by 2022. Deferred tax liabilities experienced fluctuations, peaking in 2021 at $6,128 million before dropping in 2022.
Other liabilities generally increased, especially trending upward between 2017 and 2020 before stabilizing around the mid-$3,000 millions. Overall, total liabilities have risen steadily, increasing from $35,217 million in 2017 to $49,920 million in 2022, indicating an expansion in the company's obligations.
- Equity Components and Other Financial Metrics
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Equity, representing ownership interest, increased moderately from $32,760 million in 2017 to a peak of $37,589 million in 2021 before retreating slightly to $35,581 million in 2022. The decrease in preferred stock values over time, from $5,526 million in 2017 down to $2,324 million in 2022, suggests a reduction or conversion of these preferred shares.
Common stock and additional paid-in capital have trended positively, increasing from $16,900 million to $19,545 million, indicating possible share issuances or retained earnings allocations. Accumulated income growth was stable and steady, rising from $9,508 million in 2017 to $16,116 million in 2022, reflecting consistent profit retention over the years.
Accumulated other comprehensive income/loss exhibited volatility, turning negative in 2019, recovering somewhat, then dropping significantly to a negative $2,369 million in 2022. This effect is largely attributable to adverse foreign currency translation adjustments which shifted from positive or moderate losses to a substantial negative impact in 2022.
Investment securities had minimal and inconsistent values close to zero, turning notably negative in 2022. Defined benefit pension liabilities fluctuated over time, generally representing a net liability with variability around small negative amounts, indicating some pension-related expenses or adjustments. Derivative instruments showed considerable swings, reflecting changing hedging or financial instrument positions.
- Summary and Insights
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Overall, the company demonstrates growth through increasing liabilities and equity over the six-year period. Current liabilities and accrued obligations have expanded significantly, likely reflecting scaling operations and associated costs. The stable yet elevated long-term debt suggests reliance on debt financing with some fluctuations in structure.
Equity growth and accumulated income trends highlight ongoing profitability and shareholder value retention, although a recent dip in total equity calls for monitoring. The preferred stock's marked decline may indicate strategic financing changes or capital restructuring.
Volatility in accumulated other comprehensive income, driven by foreign currency translation losses and derivative instruments, indicates exposure to currency risk and financial market fluctuations. These factors contribute to variability in comprehensive income aside from core profitability.
In conclusion, the financial data portrays an expanding entity with increasing liabilities balanced by growth in equity and income, but with notable exposure to market and currency risks that have impacted comprehensive income and require prudent financial management.