Stock Analysis on Net

Visa Inc. (NYSE:V)

$22.49

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

Analysis of Liquidity Ratios

Microsoft Excel

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Liquidity Ratios (Summary)

Visa Inc., liquidity ratios

Microsoft Excel
Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017
Current ratio
Quick ratio
Cash ratio

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).


Current Ratio
The current ratio exhibits fluctuation over the observed periods, beginning at 1.9 in 2017 and declining to 1.56 by 2019. It then increased notably to 1.91 in 2020 before falling again to 1.45 in 2022. Overall, the trend indicates variability with a general decrease in the ratio from 2017 to 2022, suggesting a diminishing level of current assets relative to current liabilities over the long term.
Quick Ratio
The quick ratio follows a pattern similar to the current ratio. Starting at 1.81 in 2017, it declines steadily to 1.45 in 2019, rises to 1.77 in 2020, and then decreases to 1.26 in 2022. This trend also reflects a reduction in the company’s most liquid assets relative to current liabilities over the period, indicating potential tightening of liquidity.
Cash Ratio
The cash ratio trend aligns with the other liquidity measures, showing an initial value of 1.56 in 2017, a decline to 1.11 by 2019, a rebound to 1.57 in 2020, and a subsequent decrease to 1.07 in 2022. This suggests fluctuations in the company's cash and cash equivalents relative to its current liabilities, with a notable recovery in 2020 followed by a decline to the lowest ratio recorded in the analyzed span by 2022.
Overall Liquidity Analysis
Across all three liquidity ratios, a consistent pattern emerges of initial declines from 2017 through 2019, a recovery in 2020, and then further declines through 2022. The 2020 uptick may be associated with liquidity adjustments during that period, possibly reflecting strategic asset management. However, the general downward trajectory from 2017 to 2022 implies that liquidity has tightened gradually, which could affect the company’s ability to cover short-term obligations without additional financing or asset liquidation.

Current Ratio

Visa Inc., current ratio calculation, comparison to benchmarks

Microsoft Excel
Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017
Selected Financial Data (US$ in millions)
Current assets
Current liabilities
Liquidity Ratio
Current ratio1
Benchmarks
Current Ratio, Competitors2
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Current Ratio, Sector
Software & Services
Current Ratio, Industry
Information Technology

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
Current ratio = Current assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.


Current Assets
The current assets exhibit a generally increasing trend over the analyzed period. Starting at 19,023 million US dollars in 2017, the value decreased slightly in 2018 to 18,216 million but then showed consistent growth from 2019 onwards, reaching 30,205 million by 2022. This indicates a strengthening in the company's liquid asset base over time.
Current Liabilities
Current liabilities have increased steadily throughout the period. The amount rose from 9,994 million US dollars in 2017 to 20,853 million in 2022, more than doubling over six years. This growth suggests rising short-term obligations, which could reflect greater operational scale or increased short-term financing needs.
Current Ratio
The current ratio demonstrates fluctuating yet generally declining liquidity. Initially, the ratio was 1.9 in 2017, reflecting a comfortable margin of current assets over current liabilities. After a decrease to 1.61 and 1.56 in 2018 and 2019 respectively, it rose again to 1.91 in 2020. Subsequently, it declined to 1.75 in 2021 and further to 1.45 in 2022. Though the company maintained a current ratio above 1 in all years—indicating the ability to cover short-term liabilities—the decreasing trend in the most recent years suggests reduced short-term liquidity buffer.
Summary Insights
Overall, the data illustrates growth in both current assets and current liabilities, with liabilities increasing at a relatively faster pace. The current ratio's fluctuation highlights variations in short-term liquidity management, with potential pressure emerging in recent years. Continued monitoring of this ratio is advisable to ensure that the company's liquidity position remains robust in the context of expanding short-term obligations.

Quick Ratio

Visa Inc., quick ratio calculation, comparison to benchmarks

Microsoft Excel
Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017
Selected Financial Data (US$ in millions)
Cash and cash equivalents
Restricted cash equivalents, U.S. litigation escrow
Investment securities
Settlement receivable
Accounts receivable
Customer collateral
Total quick assets
 
Current liabilities
Liquidity Ratio
Quick ratio1
Benchmarks
Quick Ratio, Competitors2
Accenture PLC
Adobe Inc.
Cadence Design Systems Inc.
CrowdStrike Holdings Inc.
Fair Isaac Corp.
International Business Machines Corp.
Intuit Inc.
Microsoft Corp.
Oracle Corp.
Palantir Technologies Inc.
Palo Alto Networks Inc.
Salesforce Inc.
ServiceNow Inc.
Synopsys Inc.
Workday Inc.
Quick Ratio, Sector
Software & Services
Quick Ratio, Industry
Information Technology

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
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.


Total quick assets
The total quick assets demonstrated an overall upward trend from 2017 to 2022, starting at 18,129 million US dollars in 2017 and increasing to 26,265 million US dollars in 2022. A notable rise occurred between 2019 and 2020, where the value increased significantly from 19,517 million to 25,674 million US dollars. The values stabilized somewhat between 2020 and 2022, exhibiting moderate growth.
Current liabilities
Current liabilities increased steadily over the entire period, starting at 9,994 million US dollars in 2017 and more than doubling to 20,853 million US dollars by 2022. The growth was relatively consistent each year, with a more pronounced increase between 2021 and 2022.
Quick ratio
The quick ratio showed a fluctuating yet declining trend over the years. It started at 1.81 in 2017, decreased to its lowest point of 1.26 in 2022. Intermittent increases were observed, notably in 2020 when the ratio rose to 1.77 after a prior decline. The overall declining pattern suggests increasing current liabilities outpacing the growth in quick assets.
Summary
While quick assets grew steadily, current liabilities increased at a faster rate, leading to a decline in the quick ratio from 2017 to 2022. The drop in the quick ratio signals a relative decrease in liquidity position, which could imply higher short-term financial obligations relative to readily available assets. Despite the growth in quick assets, the larger increase in liabilities indicates a tightening liquidity situation over the years under review.

Cash Ratio

Visa Inc., cash ratio calculation, comparison to benchmarks

Microsoft Excel
Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017
Selected Financial Data (US$ in millions)
Cash and cash equivalents
Restricted cash equivalents, U.S. litigation escrow
Investment securities
Customer collateral
Total cash assets
 
Current liabilities
Liquidity Ratio
Cash ratio1
Benchmarks
Cash Ratio, Competitors2
Accenture PLC
Adobe Inc.
Cadence Design Systems Inc.
CrowdStrike Holdings Inc.
Fair Isaac Corp.
International Business Machines Corp.
Intuit Inc.
Microsoft Corp.
Oracle Corp.
Palantir Technologies Inc.
Palo Alto Networks Inc.
Salesforce Inc.
ServiceNow Inc.
Synopsys Inc.
Workday Inc.
Cash Ratio, Sector
Software & Services
Cash Ratio, Industry
Information Technology

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 ratio = Total cash assets ÷ Current liabilities
= ÷ =

2 Click competitor name to see calculations.


The financial data reveals notable trends in Visa Inc.'s liquidity and short-term financial obligations over the six-year period from 2017 to 2022.

Total cash assets
There was a general increase in total cash assets from 2017 to 2022, rising from 15,575 million USD to 22,313 million USD. An exception occurred in 2018 and 2019 when cash assets decreased modestly from 15,575 to 14,524 million USD and then slightly increased to 14,927 million USD. A significant increase can be observed in 2020, where cash assets rose sharply to 22,792 million USD, followed by a slight decline in 2021 to 21,666 million USD, and then a moderate increase again in 2022.
Current liabilities
Current liabilities showed a consistent upward trend across the entire period, increasing from 9,994 million USD in 2017 to 20,853 million USD in 2022. The rise was steady each year, with a notable acceleration between 2021 and 2022, where liabilities increased by approximately 5,114 million USD.
Cash ratio
The cash ratio, representing liquidity by comparing cash assets to current liabilities, fluctuated over the years. Starting at 1.56 in 2017, indicating strong liquidity, the ratio decreased steadily through 2018 and 2019 to reach its lowest point of 1.11 in 2019. It then rebounded sharply to 1.57 in 2020, aligning with the significant increase in cash assets during that year. However, after 2020, the ratio declined again, falling to 1.38 in 2021 and further down to 1.07 in 2022, signaling a reduction in liquidity relative to the rising current liabilities.

Overall, while total cash assets grew over the six-year span, the consistently rising current liabilities and fluctuating cash ratio suggest growing short-term obligations that outpace cash growth in recent years. The decline in the cash ratio towards 2022 points to a moderation in liquidity strength, potentially indicating a need for enhanced management of short-term liabilities or cash reserves.