Visa Inc. (NYSE:V)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrates a generally upward trend over the analyzed period. Starting from 8,706 million US dollars in 2017, the figure rose steadily, reaching 9,137 million in 2018 and further increasing to 12,431 million in 2019. A decline occurred in 2020, where NOPAT dropped to 11,433 million, likely reflecting external economic impacts. Following this, the company experienced a recovery and subsequent growth, with NOPAT reaching 13,020 million in 2021 and further expanding to 15,234 million in 2022, marking the highest value in the series.

Invested Capital

The invested capital values exhibit fluctuation across the years. The figure decreased from 51,080 million US dollars in 2017 to 47,578 million in 2018. It then increased again to 50,974 million in 2019, followed by a more substantial rise to 61,524 million in 2020. The invested capital remained relatively stable afterward, slightly decreasing to 60,806 million in 2021 and marginally increasing to 60,981 million in 2022. Overall, this indicates a period of capital reallocation and an increase in investment during 2020, with stabilization in the subsequent years.

Return on Invested Capital (ROIC)

The return on invested capital displays variability but an overall improving trend. Beginning at 17.04% in 2017, it increased significantly to 19.2% in 2018 and peaked at 24.39% in 2019. 2020 revealed a decline to 18.58%, mirroring the reduction in profitability and increased invested capital seen in the same year. Recovery is evident in 2021 with ROIC climbing back to 21.41%, followed by a further increase to 24.98% in 2022, the highest in the observed period. The pattern suggests enhanced efficiency and profitability with invested capital over time, despite a temporary setback in 2020.

Operating Profit Margin (OPM)

The operating profit margin shows a generally stable trend over the periods analyzed, fluctuating slightly around the mid-60% range. It started at 66.29% in 2017 and experienced a modest decline to 62.93% in 2018. Following this, it increased to 65.53% in 2019, then dipped slightly again in 2020 to 64.63%. There was a small recovery in 2021 to 65.79%, with a slight decrease to 64.52% in 2022. Overall, the OPM remains strong and relatively consistent, indicating sustained operational efficiency.

Turnover of Capital (TO)

The turnover of capital reflects some variability across the years, with an overall upward trajectory. Starting at 0.36 in 2017, it increased to 0.43 in 2018 and further to 0.45 in 2019. In 2020, the ratio declined back to 0.36 but then rebounded to 0.40 in 2021 and rose more significantly to 0.48 in 2022. This pattern suggests an improvement in asset utilization efficiency in recent years following a dip in 2020.

1 – Effective Cash Tax Rate (CTR)

The effective cash tax rate component demonstrates a general increase over time, with some fluctuations. It began at 71.54% in 2017, slightly decreasing to 70.45% in 2018. Thereafter, it rose substantially to 82.56% in 2019, then slightly decreased to 80.98% in 2020. The rate increased slightly again to 82.1% in 2021 before a modest decrease to 80.55% in 2022. This indicates a trend toward higher effective tax rates in recent years, potentially impacting net profitability.

Return on Invested Capital (ROIC)

The return on invested capital experienced notable changes, highlighting periods of both growth and decline. Starting from 17.04% in 2017, ROIC grew to 19.2% in 2018 and peaked at 24.39% in 2019. However, in 2020, there was a significant drop to 18.58%, followed by recovery phases to 21.41% in 2021 and further improvement to 24.98% in 2022. This pattern suggests that, despite a dip during 2020, likely influenced by external factors, the company has effectively increased its capital returns in subsequent years.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes demonstrated a general upward trend over the assessed years, increasing from 12,170 million US dollars in 2017 to 18,912 million US dollars in 2022. Despite a slight dip in 2020 to 14,119 million, growth resumed strongly the following years, achieving the highest value in 2022.

Net Revenues

Net revenues showed a consistent increase throughout the period, starting at 18,358 million US dollars in 2017 and reaching 29,310 million US dollars in 2022. A marginal decrease occurred in 2020 to 21,846 million, coinciding with the dip in profit, but the revenues recovered quickly and expanded significantly in subsequent years.

Operating Profit Margin (OPM)

The operating profit margin fluctuated within a narrow range, maintaining a level around the mid-60s percentage. It decreased from 66.29% in 2017 to a low of 62.93% in 2018, then generally stabilized between approximately 64.5% and 65.8% through 2022. This indicates relative consistency in operational efficiency despite variations in profit and revenue levels.

Overall Analysis

Both net revenues and net operating profit before taxes indicated solid growth over the five-year span, with only a minor setback around 2020. The operating profit margin's stability suggests that cost structures and operational management remained effective across these years. The recovery post-2020 reflects resilience and an ability to capitalize on market opportunities.

Net Revenues

The net revenues show a generally increasing trend over the six-year period. Starting at 18,358 million US dollars in 2017, revenues increased each year except for a slight decline in 2020 to 21,846 million US dollars. After this dip, revenues grew again significantly in 2021 and 2022, reaching 29,310 million US dollars, the highest value in the analyzed period. This pattern suggests resilience and a strong recovery following the 2020 downturn.

Invested Capital

Invested capital experienced fluctuations over the analyzed years. It started at 51,080 million US dollars in 2017, decreased to 47,578 million in 2018, and then increased again to 50,974 million in 2019. A notable rise occurred in 2020, reaching 61,524 million US dollars, which was sustained in the following years with slight decreases in 2021 and 2022 to 60,806 and 60,981 million US dollars respectively. This indicates increased investment or asset base primarily from 2020 onward.

Turnover of Capital (TO)

The turnover of capital ratio shows variability with an overall upward trend. It started relatively low at 0.36 in 2017, rising to 0.43 in 2018 and further to 0.45 in 2019. In 2020, the ratio declined back to 0.36, coinciding with the dip in net revenues, then improved to 0.40 in 2021 and reached the highest point at 0.48 in 2022. This enhancement in capital turnover suggests improved efficiency in utilizing invested capital to generate revenues, particularly in the last two years of the period.

Overall Insights

The company demonstrated strong revenue growth throughout the period despite a temporary decline in 2020, potentially reflecting external challenges during that year. Invested capital increased notably in 2020 and remained elevated afterward, indicating expansion or asset acquisition. The capital turnover ratio's recovery and subsequent improvement after 2020 highlights better utilization of assets to drive revenue growth. The combined trends point to an effective adaptation to changing conditions and enhanced operational efficiency in recent years.

The analysis of the financial data over the six-year period reveals several key trends related to cash operating taxes, net operating profit before taxes (NOPBT), and the effective cash tax rate (CTR).

Cash Operating Taxes

Cash operating taxes show a fluctuating pattern with an initial increase from 3,463 million US dollars in 2017 to 3,833 million in 2018, followed by a notable decline to 2,626 million in 2019. This downward trend slightly reversed in 2020 with a minor increase to 2,686 million and continued with a moderate rise in 2021 at 2,838 million. However, a significant increase occurs in 2022, reaching 3,678 million, paralleling earlier peak levels.

Net Operating Profit Before Taxes (NOPBT)

NOPBT steadily increased over the period, starting from 12,170 million US dollars in 2017 and rising consistently to 12,970 million in 2018 and 15,057 million in 2019. Despite a dip in 2020 to 14,119 million, likely reflecting adverse conditions during that year, the figure resumed growth afterward, reaching 15,858 million in 2021 and peaking at 18,912 million in 2022. This reflects overall strong operational profitability with resilience to short-term challenges.

Effective Cash Tax Rate (CTR)

The effective cash tax rate exhibits considerable variability, beginning at 28.46% in 2017 and peaking at 29.55% in 2018. There is then a sharp decline in 2019 to 17.44%, which persists into 2020 with a slight recovery to 19.02%. The rate maintains a similar level in 2021 at 17.9%, followed by a moderate increase to 19.45% in 2022. The downward deviation from prior years suggests possibly favorable tax planning or changes in tax legislation during the mid-period, with a modest return toward higher rates in later years.