Visa Inc. (NYSE:V)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes displayed a consistent upward trend over the analyzed period, increasing from $8,706 million in 2017 to $15,234 million in 2022. Despite a slight decrease from 2019 ($12,431 million) to 2020 ($11,433 million), the profit rebounded strongly in subsequent years, reaching its highest value in 2022.

Cost of Capital

The cost of capital remained relatively stable throughout the period, fluctuating marginally around 13.3%. It began at 13.11% in 2017, rose slightly to a peak of 13.46% in 2019 and 2022, and showed minimal variation overall, indicating consistent capital costs over these years.

Invested Capital

The invested capital initially decreased from $51,080 million in 2017 to $47,578 million in 2018, then experienced recovery and growth, peaking at $61,524 million in 2020. Thereafter, it stabilized around $60,800 million through 2021 and 2022, suggesting a strategic level of capital deployment with moderate fluctuations.

Economic Profit

The economic profit demonstrated significant variability but generally exhibited strong growth over the evaluated period. Starting at $2,008 million in 2017, it increased substantially to $5,572 million in 2019, followed by a notable decline to $3,242 million in 2020. A recovery phase ensued, with economic profit rising to $4,875 million in 2021 and reaching a peak of $7,024 million in 2022. This suggests improved value generation relative to the cost of capital in recent years.

The financial data reveals a consistent upward trajectory in both net income and net operating profit after taxes (NOPAT) over the period analyzed. Net income increased steadily from $6,699 million in 2017 to $14,957 million in 2022, showing robust growth across the years with a noticeable rise between 2017 and 2018, followed by continued incremental increases in subsequent years.

Similarly, NOPAT demonstrated an overall positive trend, starting at $8,706 million in 2017 and rising to $15,234 million in 2022. There was a slight deceleration in growth in 2018 compared to the previous year's jump, but subsequent years showed considerable gains, particularly between 2019 and 2021, before reaching the highest value in 2022.

Both metrics exhibit resilience during the year 2020, marked by a slight dip in net income from the previous year but a relatively stable NOPAT, indicating effective operational performance despite potential challenges. By 2021 and 2022, the figures rebounded strongly, surpassing prior highs, reflecting enhanced profitability and operational efficiency.

Net Income Trend

Substantial growth over the six-year span with minor fluctuations in 2020.

NOPAT Trend

Steady increase with a minor slowdown in 2018 and slight decline in 2020, followed by strong recovery.

Comparison Insights

The relationship between net income and NOPAT suggests consistent improvements in operational profitability and tax management, with NOPAT consistently exceeding net income, emphasizing effective operating margins.

Income Tax Provision

The income tax provision shows a fluctuating trend over the six-year period. Starting at 4,995 million USD in 2017, there is a significant decrease to 2,505 million USD in 2018. This is followed by a modest increase through 2019 and 2020, reaching 2,804 million USD and 2,924 million USD respectively. A notable rise occurs in 2021, reaching 3,752 million USD, before declining again to 3,179 million USD in 2022. Overall, despite some variability, the data suggests a downward shift from the initial 2017 level, with intermittent recovery periods.

Cash Operating Taxes

The cash operating taxes demonstrate some variability but generally display a less pronounced downward pattern compared to the income tax provision. Beginning at 3,463 million USD in 2017, there is an upward shift to 3,833 million USD in 2018, followed by a sharp drop to 2,626 million USD in 2019. From 2019 onward, values stabilize somewhat, with slight increases to 2,686 million USD in 2020 and 2,838 million USD in 2021. However, a considerable increase is observed in 2022, reaching 3,678 million USD, nearly returning to the 2017 level. This indicates fluctuating cash tax payments with a strong recovery in the final recorded year.

Comparative Insights

While both income tax provision and cash operating taxes fluctuate throughout the period, the income tax provision exhibits a more defined declining trend from 2017 to 2022 despite occasional rises. Conversely, cash operating taxes are more volatile, with a significant dip in the middle years but a marked rebound by 2022. The data may suggest differences in tax expense recognition versus actual cash tax payments, reflecting possible timing differences, changes in tax planning, or variations in tax liabilities versus cash outflows over time.

The analysis of the financial data reveals notable trends in the company's capital structure and debt levels over the six-year period under review.

Total Reported Debt & Leases

There is a general upward trend in total reported debt and leases from 2017 through 2022. The value initially decreased from 18,928 million USD in 2017 to 17,297 million USD in 2018, remaining relatively stable in 2019 at 17,430 million USD. However, a significant increase is observed in 2020, where debt and leases rose sharply to 24,640 million USD. Following this peak, the debt level decreased somewhat in 2021 to 21,551 million USD but increased again in 2022 to 22,970 million USD. This suggests an increased reliance on debt financing particularly beginning in 2020, likely influenced by external factors impacting liquidity needs or strategic financing decisions during that period.

Equity

Equity demonstrates a steady increase from 32,760 million USD in 2017 to a peak of 37,589 million USD in 2021, followed by a slight decline to 35,581 million USD in 2022. This upward trend until 2021 indicates consistent growth in shareholders’ equity, possibly driven by retained earnings or capital contributions. The minor decrease in 2022 may reflect changes such as share repurchases, dividend payments, or fluctuations in comprehensive income.

Invested Capital

Invested capital shows some variability over the period, with an initial decrease from 51,080 million USD in 2017 to 47,578 million USD in 2018. It then rises to 50,974 million USD in 2019, followed by a marked increase to 61,524 million USD in 2020. After a slight decrease and stabilization, invested capital remains fairly steady at approximately 60,800 million USD in 2021 and 60,981 million USD in 2022. The significant jump in 2020 aligns with the increase in debt, suggesting expanded investment activity or asset acquisitions funded partially through increased borrowing.

Overall, the data reflects an increased financial leverage beginning in 2020, alongside growth in invested capital. Equity growth has been steady but exhibits a slight contraction in the final year, which merits monitoring in view of the rising debt levels. These patterns indicate strategic financial management responding to evolving operational or market conditions during the timeframe analyzed.

Economic Profit

The economic profit shows a general increasing trend over the analyzed period. Starting at 2,008 million US dollars in 2017, it rose significantly to 5,572 million by 2019. A noticeable decline occurred in 2020, dropping to 3,242 million, which could be attributed to adverse conditions during that year. Subsequently, there was a recovery and growth, with economic profit reaching 7,024 million in 2022, the highest value within the series.

Invested Capital

Invested capital experienced some fluctuations but remained relatively stable. It decreased from 51,080 million US dollars in 2017 to 47,578 million in 2018, then increased again to 50,974 million in 2019. A marked increase occurred in 2020 to 61,524 million, maintaining a similar level around 60,800 million in 2021 and 60,981 million in 2022. This suggests a strategic increase in capital investment from 2019 onwards.

Economic Spread Ratio

The economic spread ratio exhibits variability throughout the years. Beginning at 3.93% in 2017, it increased substantially to 10.93% by 2019, indicating improved profitability relative to invested capital. A decline follows in 2020 to 5.27%, aligning with the drop in economic profit, potentially reflecting external challenges during that period. Subsequently, the ratio recovered to 11.52% by 2022, surpassing previous highs and signifying enhanced economic efficiency.

Summary

The company's economic profit and economic spread ratio demonstrate significant growth over the six-year period, with a setback in 2020 likely associated with broader economic factors. Invested capital shows an initial decrease but stabilizes at a higher plateau from 2020 onward, suggesting reinvestment or expansion activities. The recovery and improvement in key profitability metrics by 2022 indicate a strong financial performance rebound and increased value creation.

Over the analyzed periods, the company’s economic profit has demonstrated a generally positive trajectory with some fluctuations. Starting at 2,008 million US dollars, it increased to a peak of 5,572 million in 2019, declined to 3,242 million in 2020, and then resumed an upward movement, reaching 7,024 million by 2022. This indicates resilience and recovery following the dip in 2020.

Net revenues followed an upward trend overall, beginning at 18,358 million US dollars in 2017 and rising consistently to reach 29,310 million by 2022. Notably, there was a dip in 2020 to 21,846 million, a pattern that parallels the decline seen in economic profit, suggesting an external or cyclical influence impacting performance during that year.

The economic profit margin, which measures the proportion of economic profit to net revenues, also reflects these trends. The margin increased significantly from 10.94% in 2017, peaking at 24.25% in 2019 before dropping to 14.84% in 2020. Subsequently, it climbed again, approaching 23.97% in 2022. This suggests that operational efficiency or profitability per revenue declined in 2020 but improved thereafter, nearing previous high levels.

Economic Profit

Demonstrated strong growth from 2017 to 2019, followed by a downturn in 2020, then recovered sharply through 2022.

Net Revenues

Exhibited steady growth across the years with a slight decline in 2020, indicating possible external challenges during that period.

Economic Profit Margin

Increased significantly up to 2019, dropped markedly in 2020, and then rebounded to near peak levels in 2022, reflecting changes in profitability relative to revenues.

Overall, the data indicates a robust financial performance with a temporary setback in 2020, likely due to unusual or external circumstances. Both economic profit and margins recovered strongly afterward, suggesting effective management responses and sustained profitability improvements.