Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Visa Inc., solvency ratios
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).
The analysis of the financial ratios over the periods from September 30, 2017, through September 30, 2022, reveals several notable trends related to the company's leverage and coverage capabilities.
- Debt to Equity and Related Metrics
- The debt to equity ratio demonstrated a general downward trend from 0.56 in 2017 to a low of 0.48 in 2019, before increasing again to 0.63 in 2022. When including operating lease liabilities, the ratio followed a similar pattern, indicating that lease obligations are a consistent factor in the company’s financial structure. This suggests a fluctuating approach to leverage, with some periods of deleveraging followed by increases in debt reliance.
- Debt to Capital
- The debt to capital ratio remained relatively stable, starting at 0.36 in 2017, declining slightly to 0.33 in 2018 and 2019, then rising to 0.40 in 2020 before settling near 0.39 in 2022. Inclusion of operating lease liabilities did not materially change these values, reinforcing the stability in the overall capital structure concerning debt levels.
- Debt to Assets
- Debt to assets ratio showed a marginal decline from 0.27 in 2017 to 0.23 in 2019, rising again to about 0.27 by 2022. This indicates that the company's asset base and debt load have maintained a steady relationship, with a slight increase in leverage relative to total assets in recent years.
- Financial Leverage
- Financial leverage ratios increased gradually from 2.08 in 2017 to 2.40 in 2022, highlighting a gradual increase in the use of debt relative to equity. The upward trend signals a growing reliance on leverage, which could have implications for both risk and return profiles.
- Interest Coverage and Fixed Charge Coverage
- Interest coverage ratios improved notably over the period, rising from 21.77 in 2017 to 34.71 in 2022. Similarly, fixed charge coverage ratios increased significantly from 17.20 in 2017 to 28.69 in 2022. These trends indicate a strengthening ability to meet interest and fixed obligations from operating earnings, reflecting improved profitability or operational efficiency or reduced interest expenses, enhancing the company’s financial flexibility.
In summary, while the company exhibited some fluctuations in leverage ratios, particularly debt to equity, the overall trend shows moderate increases in leverage with consistently strong and improving coverage ratios. This combination suggests a cautious but effective use of debt financing accompanied by enhanced earnings capacity to cover financial obligations.
Debt Ratios
Coverage Ratios
Debt to Equity
Visa Inc., debt to equity calculation, comparison to benchmarks
| 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 maturities of debt | 2,250) | 999) | 2,999) | —) | —) | 1,749) | |
| Long-term debt, excluding current maturities | 20,200) | 19,978) | 21,071) | 16,729) | 16,630) | 16,618) | |
| Total debt | 22,450) | 20,977) | 24,070) | 16,729) | 16,630) | 18,367) | |
| Equity | 35,581) | 37,589) | 36,210) | 34,684) | 34,006) | 32,760) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.63 | 0.56 | 0.66 | 0.48 | 0.49 | 0.56 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Accenture PLC | 0.00 | 0.00 | 0.00 | 0.00 | — | — | |
| Adobe Inc. | 0.29 | 0.28 | 0.31 | 0.39 | — | — | |
| Cadence Design Systems Inc. | 0.27 | 0.13 | 0.14 | — | — | — | |
| CrowdStrike Holdings Inc. | 0.72 | 0.85 | 0.00 | — | — | — | |
| Fair Isaac Corp. | — | — | 2.54 | 2.87 | — | — | |
| International Business Machines Corp. | 2.32 | 2.74 | 2.99 | — | — | — | |
| Intuit Inc. | 0.42 | 0.21 | 0.66 | 0.12 | — | — | |
| Microsoft Corp. | 0.39 | 0.50 | 0.62 | 0.77 | — | — | |
| Oracle Corp. | — | 16.08 | 5.93 | — | — | — | |
| Palantir Technologies Inc. | 0.00 | 0.00 | 0.13 | — | — | — | |
| Palo Alto Networks Inc. | 17.51 | 5.08 | 2.80 | 0.90 | — | — | |
| Salesforce Inc. | 0.19 | 0.07 | 0.09 | — | — | — | |
| ServiceNow Inc. | 0.30 | 0.43 | 0.58 | — | — | — | |
| Synopsys Inc. | 0.00 | 0.02 | 0.03 | 0.03 | — | — | |
| Workday Inc. | 0.41 | 0.55 | 0.51 | — | — | — | |
| Debt to Equity, Sector | |||||||
| Software & Services | 0.71 | 0.83 | 0.95 | — | — | — | |
| Debt to Equity, Industry | |||||||
| Information Technology | 0.71 | 0.83 | 0.97 | — | — | — | |
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
Debt to equity = Total debt ÷ Equity
= 22,450 ÷ 35,581 = 0.63
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits variability over the years. Initially, from 2017 to 2019, the debt remains relatively stable, fluctuating slightly around the 16,000 to 17,000 million US-dollar range. A notable increase occurs in 2020, where total debt rises sharply to approximately 24,070 million US dollars, then decreases somewhat in 2021 to about 20,977 million US dollars, followed by a moderate increase again in 2022 to 22,450 million US dollars. This pattern suggests a significant leveraging event or debt issuance around 2020 followed by partial repayment or balance adjustment in the subsequent years.
- Equity
- Equity steadily increases across the entire period, growing from 32,760 million US dollars in 2017 to a peak of 37,589 million US dollars in 2021. However, in 2022, equity decreases somewhat to 35,581 million US dollars. This general upward trend demonstrates consistent growth in shareholders’ equity, indicating possible retained earnings accumulation or new equity infusions, with a slight decline in the most recent period reflecting potential distributions, losses, or other equity reductions.
- Debt to Equity Ratio
- The debt-to-equity ratio shows fluctuations that correspond with changes in total debt and equity. It decreases steadily from 0.56 in 2017 to 0.48 by 2019, reflecting a relatively stronger equity base or lower debt burden. In 2020, the ratio rises significantly to 0.66, corresponding with the large increase in total debt. Subsequently, the ratio declines to 0.56 in 2021 but increases again to 0.63 in 2022. These movements indicate variability in the company’s financial leverage, with a peak in financial risk observed in 2020, followed by slight improvements, yet still remaining above pre-2020 levels.
- Overall Analysis
- Over this six-year period, there is evidence of increasing financial leverage, especially marked by the spike in total debt in 2020, potentially linked to strategic financing decisions or external economic factors. Equity growth remains positive but shows some volatility toward the end of the period. The company’s debt-to-equity ratio reflects a cautious approach initially, interrupted by increased leverage in 2020, with partial recoveries thereafter. These trends suggest active capital structure management with periodic adjustments in response to operational or market conditions.
Debt to Equity (including Operating Lease Liability)
Visa Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| 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 maturities of debt | 2,250) | 999) | 2,999) | —) | —) | 1,749) | |
| Long-term debt, excluding current maturities | 20,200) | 19,978) | 21,071) | 16,729) | 16,630) | 16,618) | |
| Total debt | 22,450) | 20,977) | 24,070) | 16,729) | 16,630) | 18,367) | |
| Current portion of operating lease liabilities (included in Accrued liabilities) | 98) | 103) | 97) | —) | —) | —) | |
| Long-term portion of operating lease liabilities (included in Other liabilities) | 422) | 471) | 473) | —) | —) | —) | |
| Total debt (including operating lease liability) | 22,970) | 21,551) | 24,640) | 16,729) | 16,630) | 18,367) | |
| Equity | 35,581) | 37,589) | 36,210) | 34,684) | 34,006) | 32,760) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.65 | 0.57 | 0.68 | 0.48 | 0.49 | 0.56 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | 0.15 | 0.18 | 0.21 | 0.00 | — | — | |
| Adobe Inc. | 0.33 | 0.32 | 0.35 | 0.39 | — | — | |
| Cadence Design Systems Inc. | 0.34 | 0.18 | 0.20 | — | — | — | |
| CrowdStrike Holdings Inc. | 0.76 | 0.89 | 0.00 | — | — | — | |
| Fair Isaac Corp. | — | — | 2.83 | 2.87 | — | — | |
| International Business Machines Corp. | 2.46 | 2.92 | 3.23 | — | — | — | |
| Intuit Inc. | 0.46 | 0.25 | 0.71 | 0.12 | — | — | |
| Microsoft Corp. | 0.47 | 0.58 | 0.69 | 0.84 | — | — | |
| Oracle Corp. | — | 16.61 | 6.10 | — | — | — | |
| Palantir Technologies Inc. | 0.10 | 0.11 | 0.30 | — | — | — | |
| Palo Alto Networks Inc. | 19.12 | 5.68 | 3.16 | 0.90 | — | — | |
| Salesforce Inc. | 0.25 | 0.15 | 0.18 | — | — | — | |
| ServiceNow Inc. | 0.44 | 0.60 | 0.75 | — | — | — | |
| Synopsys Inc. | 0.12 | 0.13 | 0.14 | 0.03 | — | — | |
| Workday Inc. | 0.46 | 0.68 | 0.63 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Software & Services | 0.81 | 0.94 | 1.06 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Information Technology | 0.77 | 0.91 | 1.04 | — | — | — | |
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
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Equity
= 22,970 ÷ 35,581 = 0.65
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt showed a decreasing trend from 2017 to 2019, declining from 18,367 million USD to 16,729 million USD. However, there was a sharp increase in 2020, reaching 24,640 million USD. Following this peak, the debt slightly reduced in 2021 to 21,551 million USD but rose again to 22,970 million USD in 2022.
- Equity
- Equity consistently increased from 32,760 million USD in 2017 to a peak of 37,589 million USD in 2021. In 2022, equity experienced a moderate decline to 35,581 million USD, breaking the otherwise upward trend across the years.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio decreased from 0.56 in 2017 to its lowest point of 0.48 in 2019, indicating a reduction in leverage relative to equity. However, the ratio sharply increased to 0.68 in 2020, paralleling the spike in total debt. In 2021, the ratio improved to 0.57 but increased again in 2022 to 0.65, reflecting fluctuations in debt relative to equity during this period.
Debt to Capital
Visa Inc., debt to capital calculation, comparison to benchmarks
| 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 maturities of debt | 2,250) | 999) | 2,999) | —) | —) | 1,749) | |
| Long-term debt, excluding current maturities | 20,200) | 19,978) | 21,071) | 16,729) | 16,630) | 16,618) | |
| Total debt | 22,450) | 20,977) | 24,070) | 16,729) | 16,630) | 18,367) | |
| Equity | 35,581) | 37,589) | 36,210) | 34,684) | 34,006) | 32,760) | |
| Total capital | 58,031) | 58,566) | 60,280) | 51,413) | 50,636) | 51,127) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.39 | 0.36 | 0.40 | 0.33 | 0.33 | 0.36 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Accenture PLC | 0.00 | 0.00 | 0.00 | 0.00 | — | — | |
| Adobe Inc. | 0.23 | 0.22 | 0.24 | 0.28 | — | — | |
| Cadence Design Systems Inc. | 0.21 | 0.11 | 0.12 | — | — | — | |
| CrowdStrike Holdings Inc. | 0.42 | 0.46 | 0.00 | — | — | — | |
| Fair Isaac Corp. | 1.76 | 1.10 | 0.72 | 0.74 | — | — | |
| International Business Machines Corp. | 0.70 | 0.73 | 0.75 | — | — | — | |
| Intuit Inc. | 0.30 | 0.17 | 0.40 | 0.10 | — | — | |
| Microsoft Corp. | 0.28 | 0.33 | 0.38 | 0.43 | — | — | |
| Oracle Corp. | 1.09 | 0.94 | 0.86 | — | — | — | |
| Palantir Technologies Inc. | 0.00 | 0.00 | 0.12 | — | — | — | |
| Palo Alto Networks Inc. | 0.95 | 0.84 | 0.74 | 0.47 | — | — | |
| Salesforce Inc. | 0.16 | 0.06 | 0.08 | — | — | — | |
| ServiceNow Inc. | 0.23 | 0.30 | 0.37 | — | — | — | |
| Synopsys Inc. | 0.00 | 0.02 | 0.03 | 0.03 | — | — | |
| Workday Inc. | 0.29 | 0.35 | 0.34 | — | — | — | |
| Debt to Capital, Sector | |||||||
| Software & Services | 0.42 | 0.45 | 0.49 | — | — | — | |
| Debt to Capital, Industry | |||||||
| Information Technology | 0.41 | 0.45 | 0.49 | — | — | — | |
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
Debt to capital = Total debt ÷ Total capital
= 22,450 ÷ 58,031 = 0.39
2 Click competitor name to see calculations.
- Total Debt
- The total debt showed a general increase over the observed period. Starting at 18,367 million USD in 2017, it slightly decreased in the following two years to 16,630 million USD in 2018 and 16,729 million USD in 2019. However, a significant rise occurred in 2020, reaching 24,070 million USD. After this peak, total debt decreased to 20,977 million USD in 2021 but then increased again to 22,450 million USD in 2022. This pattern suggests a fluctuating but overall upward trajectory in debt levels, with the most notable increase coinciding with 2020.
- Total Capital
- Total capital remained relatively stable from 2017 to 2019, fluctuating slightly between 50,636 and 51,413 million USD. In 2020, total capital experienced a noticeable increase to 60,280 million USD, then showed a modest decline in the following years, recorded at 58,566 million USD in 2021 and 58,031 million USD in 2022. Despite the minor decrease after 2020, total capital levels in 2021 and 2022 remained above the early period figures, indicating an overall growth in capital base over the six years.
- Debt to Capital Ratio
- The debt to capital ratio started at 0.36 in 2017 and declined to 0.33 for both 2018 and 2019, reflecting a reduction in leverage relative to total capital. In 2020, the ratio increased sharply to 0.40, aligning with the considerable rise in debt during the same year. Subsequently, the ratio decreased to 0.36 in 2021, before rising modestly to 0.39 in 2022. These changes indicate that leverage increased substantially in 2020 but then partially stabilized in subsequent years, remaining higher than the pre-2020 levels.
Debt to Capital (including Operating Lease Liability)
Visa Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| 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 maturities of debt | 2,250) | 999) | 2,999) | —) | —) | 1,749) | |
| Long-term debt, excluding current maturities | 20,200) | 19,978) | 21,071) | 16,729) | 16,630) | 16,618) | |
| Total debt | 22,450) | 20,977) | 24,070) | 16,729) | 16,630) | 18,367) | |
| Current portion of operating lease liabilities (included in Accrued liabilities) | 98) | 103) | 97) | —) | —) | —) | |
| Long-term portion of operating lease liabilities (included in Other liabilities) | 422) | 471) | 473) | —) | —) | —) | |
| Total debt (including operating lease liability) | 22,970) | 21,551) | 24,640) | 16,729) | 16,630) | 18,367) | |
| Equity | 35,581) | 37,589) | 36,210) | 34,684) | 34,006) | 32,760) | |
| Total capital (including operating lease liability) | 58,551) | 59,140) | 60,850) | 51,413) | 50,636) | 51,127) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.39 | 0.36 | 0.40 | 0.33 | 0.33 | 0.36 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | 0.13 | 0.15 | 0.17 | 0.00 | — | — | |
| Adobe Inc. | 0.25 | 0.24 | 0.26 | 0.28 | — | — | |
| Cadence Design Systems Inc. | 0.25 | 0.15 | 0.17 | — | — | — | |
| CrowdStrike Holdings Inc. | 0.43 | 0.47 | 0.00 | — | — | — | |
| Fair Isaac Corp. | 1.72 | 1.09 | 0.74 | 0.74 | — | — | |
| International Business Machines Corp. | 0.71 | 0.74 | 0.76 | — | — | — | |
| Intuit Inc. | 0.31 | 0.20 | 0.42 | 0.10 | — | — | |
| Microsoft Corp. | 0.32 | 0.37 | 0.41 | 0.46 | — | — | |
| Oracle Corp. | 1.08 | 0.94 | 0.86 | — | — | — | |
| Palantir Technologies Inc. | 0.09 | 0.10 | 0.23 | — | — | — | |
| Palo Alto Networks Inc. | 0.95 | 0.85 | 0.76 | 0.47 | — | — | |
| Salesforce Inc. | 0.20 | 0.13 | 0.16 | — | — | — | |
| ServiceNow Inc. | 0.31 | 0.37 | 0.43 | — | — | — | |
| Synopsys Inc. | 0.11 | 0.11 | 0.12 | 0.03 | — | — | |
| Workday Inc. | 0.32 | 0.41 | 0.39 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Software & Services | 0.45 | 0.48 | 0.51 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Information Technology | 0.44 | 0.48 | 0.51 | — | — | — | |
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
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 22,970 ÷ 58,551 = 0.39
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt exhibits variability over the analyzed period. Initially, there is a decline from 18,367 million USD in 2017 to 16,630 million USD in 2018, followed by a slight increase to 16,729 million USD in 2019. A notable surge occurs in 2020, with debt rising sharply to 24,640 million USD. Subsequently, the total debt decreases to 21,551 million USD in 2021 but climbs again in 2022 to 22,970 million USD. This pattern suggests periods of increased leverage, particularly in 2020, with partial reduction in the following year and a moderate rise thereafter.
- Total Capital (including operating lease liability)
- Total capital demonstrates a generally upward trend from 2017 through 2020, increasing from 51,127 million USD to 60,850 million USD. After peaking in 2020, total capital slightly decreases over the next two years, with values of 59,140 million USD in 2021 and 58,551 million USD in 2022. This indicates that while the overall capital base expanded notably during the earlier part of the period analyzed, it has experienced a modest contraction recently.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio shows moderate fluctuations within a narrow range. Starting at 0.36 in 2017, it decreases to 0.33 in both 2018 and 2019, indicating a lower reliance on debt relative to capital during these years. The ratio then rises to 0.40 in 2020, coinciding with the observed peak in total debt and capital. In 2021, the ratio decreases to 0.36 before increasing again to 0.39 in 2022. These movements reflect shifts in the capital structure, with a heightened leverage position in 2020 and a generally stable but slightly increased leverage in the most recent year.
Debt to Assets
Visa Inc., debt to assets calculation, comparison to benchmarks
| 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 maturities of debt | 2,250) | 999) | 2,999) | —) | —) | 1,749) | |
| Long-term debt, excluding current maturities | 20,200) | 19,978) | 21,071) | 16,729) | 16,630) | 16,618) | |
| Total debt | 22,450) | 20,977) | 24,070) | 16,729) | 16,630) | 18,367) | |
| Total assets | 85,501) | 82,896) | 80,919) | 72,574) | 69,225) | 67,977) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.26 | 0.25 | 0.30 | 0.23 | 0.24 | 0.27 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Accenture PLC | 0.00 | 0.00 | 0.00 | 0.00 | — | — | |
| Adobe Inc. | 0.15 | 0.15 | 0.17 | 0.20 | — | — | |
| Cadence Design Systems Inc. | 0.15 | 0.08 | 0.09 | — | — | — | |
| CrowdStrike Holdings Inc. | 0.20 | 0.27 | 0.00 | — | — | — | |
| Fair Isaac Corp. | 1.29 | 0.80 | 0.52 | 0.58 | — | — | |
| International Business Machines Corp. | 0.40 | 0.39 | 0.39 | — | — | — | |
| Intuit Inc. | 0.25 | 0.13 | 0.31 | 0.07 | — | — | |
| Microsoft Corp. | 0.18 | 0.21 | 0.24 | 0.27 | — | — | |
| Oracle Corp. | 0.69 | 0.64 | 0.62 | — | — | — | |
| Palantir Technologies Inc. | 0.00 | 0.00 | 0.07 | — | — | — | |
| Palo Alto Networks Inc. | 0.30 | 0.31 | 0.34 | 0.22 | — | — | |
| Salesforce Inc. | 0.12 | 0.04 | 0.06 | — | — | — | |
| ServiceNow Inc. | 0.11 | 0.15 | 0.19 | — | — | — | |
| Synopsys Inc. | 0.00 | 0.01 | 0.02 | 0.02 | — | — | |
| Workday Inc. | 0.18 | 0.21 | 0.19 | — | — | — | |
| Debt to Assets, Sector | |||||||
| Software & Services | 0.26 | 0.28 | 0.30 | — | — | — | |
| Debt to Assets, Industry | |||||||
| Information Technology | 0.26 | 0.29 | 0.31 | — | — | — | |
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
Debt to assets = Total debt ÷ Total assets
= 22,450 ÷ 85,501 = 0.26
2 Click competitor name to see calculations.
- Total Debt
- Over the six-year period, total debt experienced fluctuations with an overall upward trend. Initially, there was a decline from 18,367 million USD in 2017 to 16,630 million USD in 2018, followed by a marginal increase in 2019 to 16,729 million USD. A significant rise occurred in 2020, reaching 24,070 million USD, which represents the peak within this period. Subsequently, debt decreased to 20,977 million USD in 2021 before slightly increasing again to 22,450 million USD in 2022.
- Total Assets
- Total assets steadily increased throughout the time frame analyzed. From 67,977 million USD in 2017, assets grew each year without decline, reaching 85,501 million USD by 2022. The growth appears consistent, with the most notable increase between 2019 and 2020, coinciding with the rise in total debt during the same interval.
- Debt to Assets Ratio
- The debt to assets ratio shows variability but remains within a relatively narrow range. It decreased from 0.27 in 2017 to a low of 0.23 in 2019, indicating improved leverage or asset base relative to debt. In 2020, the ratio increased sharply to 0.30, the highest point seen in the period, corresponding with the large increase in total debt. By 2021 and 2022, the ratio decreased and then stabilized around 0.25 and 0.26 respectively, suggesting a moderation in leverage relative to the peak observed in 2020.
Debt to Assets (including Operating Lease Liability)
Visa Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| 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 maturities of debt | 2,250) | 999) | 2,999) | —) | —) | 1,749) | |
| Long-term debt, excluding current maturities | 20,200) | 19,978) | 21,071) | 16,729) | 16,630) | 16,618) | |
| Total debt | 22,450) | 20,977) | 24,070) | 16,729) | 16,630) | 18,367) | |
| Current portion of operating lease liabilities (included in Accrued liabilities) | 98) | 103) | 97) | —) | —) | —) | |
| Long-term portion of operating lease liabilities (included in Other liabilities) | 422) | 471) | 473) | —) | —) | —) | |
| Total debt (including operating lease liability) | 22,970) | 21,551) | 24,640) | 16,729) | 16,630) | 18,367) | |
| Total assets | 85,501) | 82,896) | 80,919) | 72,574) | 69,225) | 67,977) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.27 | 0.26 | 0.30 | 0.23 | 0.24 | 0.27 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | 0.07 | 0.08 | 0.09 | 0.00 | — | — | |
| Adobe Inc. | 0.17 | 0.17 | 0.19 | 0.20 | — | — | |
| Cadence Design Systems Inc. | 0.18 | 0.11 | 0.13 | — | — | — | |
| CrowdStrike Holdings Inc. | 0.21 | 0.29 | 0.00 | — | — | — | |
| Fair Isaac Corp. | 1.33 | 0.85 | 0.58 | 0.58 | — | — | |
| International Business Machines Corp. | 0.42 | 0.42 | 0.43 | — | — | — | |
| Intuit Inc. | 0.27 | 0.16 | 0.33 | 0.07 | — | — | |
| Microsoft Corp. | 0.21 | 0.25 | 0.27 | 0.30 | — | — | |
| Oracle Corp. | 0.73 | 0.66 | 0.64 | — | — | — | |
| Palantir Technologies Inc. | 0.07 | 0.08 | 0.17 | — | — | — | |
| Palo Alto Networks Inc. | 0.33 | 0.35 | 0.38 | 0.22 | — | — | |
| Salesforce Inc. | 0.15 | 0.10 | 0.11 | — | — | — | |
| ServiceNow Inc. | 0.17 | 0.21 | 0.24 | — | — | — | |
| Synopsys Inc. | 0.07 | 0.08 | 0.08 | 0.02 | — | — | |
| Workday Inc. | 0.20 | 0.26 | 0.23 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Software & Services | 0.30 | 0.32 | 0.34 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Information Technology | 0.29 | 0.31 | 0.33 | — | — | — | |
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
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 22,970 ÷ 85,501 = 0.27
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt demonstrates fluctuations over the years. Initially, there was a decline from US$18,367 million in 2017 to US$16,630 million in 2018, followed by a slight increase to US$16,729 million in 2019. A significant increase is observed in 2020 where total debt rose sharply to US$24,640 million. Subsequently, it decreased to US$21,551 million in 2021 but again increased to US$22,970 million in 2022. Overall, despite variations, there is a clear upward trend in total debt from 2019 onwards.
- Total Assets
- Total assets steadily increased throughout the period. Starting at US$67,977 million in 2017, assets grew consistently each year, reaching US$85,501 million by 2022. The growth from 2019 (US$72,574 million) to 2020 (US$80,919 million) is particularly notable, indicating an expansion in the asset base during that period. The continuous asset growth suggests ongoing investments or value addition to the asset portfolio.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio shows a general pattern of stability with some variation. Initially, the ratio decreased from 0.27 in 2017 to 0.23 in 2019, reflecting a relative reduction in debt compared to assets. However, it increased sharply to 0.30 in 2020, corresponding with the observed spike in total debt against the backdrop of growing assets. This ratio then declined to 0.26 in 2021 and slightly increased to 0.27 in 2022, indicating a return to levels similar to the earlier years. This suggests that despite fluctuations, the company maintained a relatively stable leverage position over the observed period.
Financial Leverage
Visa Inc., financial leverage calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 85,501) | 82,896) | 80,919) | 72,574) | 69,225) | 67,977) | |
| Equity | 35,581) | 37,589) | 36,210) | 34,684) | 34,006) | 32,760) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.40 | 2.21 | 2.23 | 2.09 | 2.04 | 2.08 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Accenture PLC | 2.14 | 2.21 | 2.18 | 2.07 | — | — | |
| Adobe Inc. | 1.93 | 1.84 | 1.83 | 1.97 | — | — | |
| Cadence Design Systems Inc. | 1.87 | 1.60 | 1.58 | — | — | — | |
| CrowdStrike Holdings Inc. | 3.53 | 3.14 | 1.89 | — | — | — | |
| Fair Isaac Corp. | — | — | 4.85 | 4.95 | — | — | |
| International Business Machines Corp. | 5.80 | 6.98 | 7.57 | — | — | — | |
| Intuit Inc. | 1.69 | 1.57 | 2.14 | 1.68 | — | — | |
| Microsoft Corp. | 2.19 | 2.35 | 2.55 | 2.80 | — | — | |
| Oracle Corp. | — | 25.03 | 9.56 | — | — | — | |
| Palantir Technologies Inc. | 1.35 | 1.42 | 1.77 | — | — | — | |
| Palo Alto Networks Inc. | 58.35 | 16.14 | 8.23 | 4.16 | — | — | |
| Salesforce Inc. | 1.64 | 1.60 | 1.63 | — | — | — | |
| ServiceNow Inc. | 2.64 | 2.92 | 3.07 | — | — | — | |
| Synopsys Inc. | 1.71 | 1.65 | 1.64 | 1.57 | — | — | |
| Workday Inc. | 2.31 | 2.66 | 2.74 | — | — | — | |
| Financial Leverage, Sector | |||||||
| Software & Services | 2.73 | 2.96 | 3.14 | — | — | — | |
| Financial Leverage, Industry | |||||||
| Information Technology | 2.69 | 2.90 | 3.12 | — | — | — | |
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
Financial leverage = Total assets ÷ Equity
= 85,501 ÷ 35,581 = 2.40
2 Click competitor name to see calculations.
- Total Assets
- The total assets demonstrated a consistent upward trend from 67,977 million USD in 2017 to 85,501 million USD in 2022. This represents steady growth over the six-year period, with noticeable increments each year, particularly between 2019 and 2020 where the increase accelerated from 72,574 million USD to 80,919 million USD.
- Equity
- Equity also showed a general increase from 32,760 million USD in 2017 to a peak of 37,589 million USD in 2021, followed by a decline in 2022 to 35,581 million USD. The upward trend over the first five years suggests accumulation of retained earnings or issuance of new equity, whereas the drop in 2022 might indicate distributions to shareholders, losses, or other equity reductions.
- Financial Leverage
- Financial leverage, defined as the ratio of total assets to equity, fluctuated slightly but exhibited an overall increasing trend from 2.08 in 2017 to 2.40 in 2022. This rise in leverage implies an increasing reliance on debt or other non-equity financing sources relative to equity. Notably, the leverage ratio saw a marked increase in 2020 and continued to trend upward, peaking in 2022, suggesting a growing use of financial obligations or borrowings over time.
- Summary Insights
- The data reflects that the company has been steadily expanding its asset base while maintaining a generally positive equity growth until 2022, when equity levels decreased. The increasing financial leverage ratio may indicate a strategic shift towards higher debt usage or other liabilities to finance asset growth, which could imply greater financial risk in later years despite asset expansion. Monitoring the causes behind the decline in equity and the implications of rising leverage would be prudent in future assessments.
Interest Coverage
Visa Inc., interest coverage calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 14,957) | 12,311) | 10,866) | 12,080) | 10,301) | 6,699) | |
| Add: Income tax expense | 3,179) | 3,752) | 2,924) | 2,804) | 2,505) | 4,995) | |
| Add: Interest expense | 538) | 513) | 516) | 533) | 612) | 563) | |
| Earnings before interest and tax (EBIT) | 18,674) | 16,576) | 14,306) | 15,417) | 13,418) | 12,257) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 34.71 | 32.31 | 27.72 | 28.92 | 21.92 | 21.77 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Accenture PLC | 195.34 | 131.46 | 205.84 | 273.26 | — | — | |
| Adobe Inc. | 54.64 | 51.49 | 37.00 | 21.38 | — | — | |
| Cadence Design Systems Inc. | 46.58 | 46.26 | 31.50 | — | — | — | |
| CrowdStrike Holdings Inc. | -5.34 | -55.36 | -315.25 | — | — | — | |
| Fair Isaac Corp. | 7.83 | 12.80 | 7.09 | 6.44 | — | — | |
| International Business Machines Corp. | 1.97 | 5.20 | 4.62 | — | — | — | |
| Intuit Inc. | 32.38 | 89.14 | 158.00 | 126.40 | — | — | |
| Microsoft Corp. | 41.58 | 31.31 | 21.47 | 17.27 | — | — | |
| Oracle Corp. | 3.84 | 6.28 | 7.13 | — | — | — | |
| Palantir Technologies Inc. | -87.97 | -133.20 | -82.39 | — | — | — | |
| Palo Alto Networks Inc. | -6.56 | -1.85 | -1.61 | 0.11 | — | — | |
| Salesforce Inc. | 7.93 | 21.49 | 6.43 | — | — | — | |
| ServiceNow Inc. | 15.78 | 9.89 | 5.56 | — | — | — | |
| Synopsys Inc. | 657.96 | 240.38 | 125.16 | 47.79 | — | — | |
| Workday Inc. | 1.97 | -3.00 | -7.22 | — | — | — | |
| Interest Coverage, Sector | |||||||
| Software & Services | 18.09 | 17.35 | 13.97 | — | — | — | |
| Interest Coverage, Industry | |||||||
| Information Technology | 22.65 | 19.92 | 14.14 | — | — | — | |
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
Interest coverage = EBIT ÷ Interest expense
= 18,674 ÷ 538 = 34.71
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the six-year period ending September 30, 2022. The Earnings Before Interest and Tax (EBIT) showed a generally positive trajectory, increasing from 12,257 million US dollars in 2017 to 18,674 million US dollars in 2022. Despite a slight decline in 2020, potentially influenced by broader economic conditions, EBIT rebounded strongly in subsequent years, reflecting improved operational performance and potentially enhanced revenue generation or cost management.
Interest expense exhibited a relatively stable pattern, fluctuating marginally between 513 million and 612 million US dollars over the period. The absence of significant increases in interest expense suggests effective debt management or stable financing costs.
The interest coverage ratio, which measures the ability to meet interest obligations from EBIT, improved steadily from 21.77 in 2017 to 34.71 in 2022. This increasing trend indicates a strengthening capacity to service interest payments, driven by growing EBIT and stable interest expenses, enhancing financial stability and reducing risk.
- Earnings Before Interest and Tax (EBIT)
- Consistent growth over the period with a minor dip in 2020, followed by strong recovery and peak value in 2022.
- Interest Expense
- Relatively stable with minor fluctuations, indicating steady debt and financing cost levels.
- Interest Coverage Ratio
- Progressive increase implying improved ability to cover interest obligations, reflecting stronger earnings in relation to debt costs.
Fixed Charge Coverage
Visa Inc., fixed charge coverage calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 14,957) | 12,311) | 10,866) | 12,080) | 10,301) | 6,699) | |
| Add: Income tax expense | 3,179) | 3,752) | 2,924) | 2,804) | 2,505) | 4,995) | |
| Add: Interest expense | 538) | 513) | 516) | 533) | 612) | 563) | |
| Earnings before interest and tax (EBIT) | 18,674) | 16,576) | 14,306) | 15,417) | 13,418) | 12,257) | |
| Add: Operating lease cost | 117) | 111) | 114) | 286) | 224) | 159) | |
| Earnings before fixed charges and tax | 18,791) | 16,687) | 14,420) | 15,703) | 13,642) | 12,416) | |
| Interest expense | 538) | 513) | 516) | 533) | 612) | 563) | |
| Operating lease cost | 117) | 111) | 114) | 286) | 224) | 159) | |
| Fixed charges | 655) | 624) | 630) | 819) | 836) | 722) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 28.69 | 26.74 | 22.89 | 19.17 | 16.32 | 17.20 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Accenture PLC | 12.25 | 10.41 | 9.66 | 10.07 | — | — | |
| Adobe Inc. | 26.79 | 25.59 | 18.77 | 10.78 | — | — | |
| Cadence Design Systems Inc. | 15.50 | 13.77 | 11.46 | — | — | — | |
| CrowdStrike Holdings Inc. | -3.39 | -6.40 | -12.01 | — | — | — | |
| Fair Isaac Corp. | 6.39 | 8.93 | 4.91 | 4.52 | — | — | |
| International Business Machines Corp. | 1.52 | 3.13 | 2.62 | — | — | — | |
| Intuit Inc. | 14.67 | 25.58 | 27.48 | 34.00 | — | — | |
| Microsoft Corp. | 19.50 | 16.90 | 12.44 | 10.94 | — | — | |
| Oracle Corp. | 3.22 | 5.17 | 5.68 | — | — | — | |
| Palantir Technologies Inc. | -5.06 | -7.89 | -16.41 | — | — | — | |
| Palo Alto Networks Inc. | -1.18 | -1.09 | -0.52 | 0.41 | — | — | |
| Salesforce Inc. | 2.18 | 2.92 | 1.68 | — | — | — | |
| ServiceNow Inc. | 3.87 | 2.95 | 2.29 | — | — | — | |
| Synopsys Inc. | 12.91 | 9.29 | 7.46 | 6.30 | — | — | |
| Workday Inc. | 1.15 | -0.69 | -2.35 | — | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Software & Services | 9.44 | 9.23 | 7.43 | — | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Information Technology | 13.44 | 12.21 | 9.04 | — | — | — | |
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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 18,791 ÷ 655 = 28.69
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax have shown a generally increasing trend over the analyzed period. Starting at 12,416 million US dollars in 2017, the figure rose steadily each year, reaching 18,791 million US dollars by 2022. There was a minor decline observed in 2020, where earnings decreased to 14,420 million from 15,703 million in 2019, potentially indicating an impact from external factors during that period. However, the earnings rebounded strongly in subsequent years.
- Fixed charges
- Fixed charges fluctuated mildly during the timeframe, beginning at 722 million US dollars in 2017 and ending slightly higher at 655 million US dollars in 2022. The trend is not strictly linear; for example, there was an increase to 836 million in 2018, followed by a decrease to 630 million in 2020, then minor variations afterwards. Overall, fixed charges have remained relatively stable with no significant upward or downward movement.
- Fixed charge coverage ratio
- The fixed charge coverage ratio demonstrates a strong upward trend throughout the period, illustrating an improving ability to cover fixed charges with earnings. The ratio increased from 17.2 in 2017 to 28.69 in 2022. This improvement suggests enhanced financial strength and greater capacity to meet fixed obligations comfortably over the years. The most notable growth occurred after 2019, aligning with the rebound in earnings despite the relatively stable fixed charges.