Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Visa Inc., profitability 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).
- Operating Profit Margin
- The operating profit margin exhibits relative stability over the observed period, fluctuating within a narrow range around the mid-60-percent level. It began at 66.15% in 2017, declined to a low of 62.86% in 2018, and subsequently oscillated modestly, reaching 64.19% in 2022. This indicates a consistently strong ability to control operating costs relative to sales, with only minor variations over the years.
- Net Profit Margin
- The net profit margin shows a clear upward trend from 2017 through 2019, increasing significantly from 36.49% to 52.57%. Following a slight decline in 2020 to 49.74%, it stabilizes and maintains levels just above 51% in the last two reported years. This pattern suggests improved profitability, possibly reflecting effective expense management or favorable income tax developments.
- Return on Equity (ROE)
- Return on equity displays notable growth across the full period analyzed, beginning at 20.45% in 2017. It rises steadily, with a small dip in 2020 to 30.01%, before accelerating to 42.04% by 2022. The higher ROE in recent years signals enhanced efficiency in generating profits from shareholders' equity, which may indicate strong operational performance or effective capital management.
- Return on Assets (ROA)
- The return on assets follows a pattern similar to ROE, starting at 9.85% in 2017 and generally increasing over time. Despite a decline in 2020 to 13.43%, ROA reaches 17.49% in 2022, its highest point. This trend reflects increased effectiveness in utilizing total assets to generate net income, which supports the broader narrative of improved operational efficiency.
Return on Sales
Return on Investment
Operating Profit Margin
Visa Inc., operating profit margin 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) | |||||||
| Operating income | 18,813) | 15,804) | 14,081) | 15,001) | 12,954) | 12,144) | |
| Net revenues | 29,310) | 24,105) | 21,846) | 22,977) | 20,609) | 18,358) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 64.19% | 65.56% | 64.46% | 65.29% | 62.86% | 66.15% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | 15.21% | 15.08% | 14.69% | 14.59% | — | — | |
| Adobe Inc. | 34.64% | 36.76% | 32.93% | 29.25% | — | — | |
| Cadence Design Systems Inc. | 30.15% | 26.07% | 24.06% | — | — | — | |
| CrowdStrike Holdings Inc. | -9.82% | -10.58% | -30.34% | — | — | — | |
| International Business Machines Corp. | 13.50% | 11.97% | 9.22% | — | — | — | |
| Intuit Inc. | 20.20% | 25.95% | 28.34% | 27.33% | — | — | |
| Microsoft Corp. | 42.06% | 41.59% | 37.03% | 34.14% | — | — | |
| Oracle Corp. | 25.74% | 37.58% | 35.57% | — | — | — | |
| Palantir Technologies Inc. | -8.46% | -26.66% | -107.41% | — | — | — | |
| Palo Alto Networks Inc. | -3.43% | -7.15% | -5.25% | -1.87% | — | — | |
| Salesforce Inc. | 2.07% | 2.14% | 1.74% | — | — | — | |
| ServiceNow Inc. | 4.90% | 4.36% | 4.40% | — | — | — | |
| Synopsys Inc. | 22.87% | 17.48% | 16.83% | 15.48% | — | — | |
| Workday Inc. | -2.27% | -5.76% | -13.85% | — | — | — | |
| Operating Profit Margin, Sector | |||||||
| Software & Services | 27.37% | 28.17% | 24.17% | — | — | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | 26.42% | 26.71% | 22.69% | — | — | — | |
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
Operating profit margin = 100 × Operating income ÷ Net revenues
= 100 × 18,813 ÷ 29,310 = 64.19%
2 Click competitor name to see calculations.
Analysis of the provided financial data reveals several notable trends over the observed six-year period.
- Operating Income
- Operating income exhibited a consistent growth trajectory from 2017 through 2022, increasing from $12,144 million to $18,813 million. Despite a minor decline in 2020, potentially reflective of external challenges during that period, the overall trend remains upward, suggesting improved operational efficiency or expansion in core business activities.
- Net Revenues
- Net revenues similarly demonstrated a positive growth trend, rising from $18,358 million in 2017 to $29,310 million in 2022. A slight decrease was observed in 2020, mirroring the pattern seen in operating income, yet recovery and growth resumed robustly in subsequent years. This increase highlights effective revenue generation and possibly an expanding market or enhanced service offerings.
- Operating Profit Margin
- The operating profit margin fluctuated moderately within a narrow range across the period. Starting at 66.15% in 2017, it fell to 62.86% in 2018, increased again to 65.29% in 2019, followed by a marginal dip and recovery pattern, ending at 64.19% in 2022. These variations suggest fairly stable operational profitability relative to revenues, with minor year-to-year shifts, possibly influenced by cost management or pricing strategies.
Overall, the data indicates sustained growth in both operating income and net revenues, with operating margins remaining relatively stable. The temporary declines in 2020 across key metrics may reflect broader economic disruptions, yet the subsequent rebound underscores resilience and effective management during the analyzed timeframe.
Net Profit Margin
Visa Inc., net profit margin calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 14,957) | 12,311) | 10,866) | 12,080) | 10,301) | 6,699) | |
| Net revenues | 29,310) | 24,105) | 21,846) | 22,977) | 20,609) | 18,358) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 51.03% | 51.07% | 49.74% | 52.57% | 49.98% | 36.49% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | 11.17% | 11.69% | 11.52% | 11.06% | — | — | |
| Adobe Inc. | 27.01% | 30.55% | 40.88% | 26.42% | — | — | |
| Cadence Design Systems Inc. | 23.84% | 23.29% | 22.02% | — | — | — | |
| CrowdStrike Holdings Inc. | -16.18% | -10.59% | -29.45% | — | — | — | |
| International Business Machines Corp. | 2.71% | 10.01% | 7.59% | — | — | — | |
| Intuit Inc. | 16.23% | 21.41% | 23.78% | 22.95% | — | — | |
| Microsoft Corp. | 36.69% | 36.45% | 30.96% | 31.18% | — | — | |
| Oracle Corp. | 15.83% | 33.96% | 25.94% | — | — | — | |
| Palantir Technologies Inc. | -19.61% | -33.75% | -106.75% | — | — | — | |
| Palo Alto Networks Inc. | -4.85% | -11.72% | -7.83% | -2.82% | — | — | |
| Salesforce Inc. | 5.45% | 19.16% | 0.74% | — | — | — | |
| ServiceNow Inc. | 4.49% | 3.90% | 2.62% | — | — | — | |
| Synopsys Inc. | 19.38% | 18.02% | 18.03% | 15.84% | — | — | |
| Workday Inc. | 0.57% | -6.54% | -13.25% | — | — | — | |
| Net Profit Margin, Sector | |||||||
| Software & Services | 21.70% | 25.29% | 20.06% | — | — | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | 22.45% | 23.61% | 19.67% | — | — | — | |
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
Net profit margin = 100 × Net income ÷ Net revenues
= 100 × 14,957 ÷ 29,310 = 51.03%
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrated a consistent upward trend from 2017 to 2022, increasing from $6,699 million to $14,957 million. This represents more than a twofold growth over the six-year period. Notably, there was a slight decline in 2020, where net income decreased from $12,080 million in 2019 to $10,866 million, followed by a recovery and continued growth in subsequent years.
- Net Revenues
- Net revenues exhibited a steady increase over the years, rising from $18,358 million in 2017 to $29,310 million in 2022. Similar to net income, there was a minor dip in 2020, where revenues dropped from $22,977 million in 2019 to $21,846 million, likely reflecting the broader economic challenges of that period. Afterwards, revenues resumed their growth trajectory, reaching the highest recorded value in 2022.
- Net Profit Margin
- The net profit margin showed significant improvement between 2017 and 2019, escalating from 36.49% to 52.57%. After a slight dip to 49.74% in 2020, the margin stabilized in the subsequent years, maintaining a level above 50%. This indicates a strong and consistent profitability relative to revenues despite the revenue and income fluctuations in 2020.
- Overall Observations
- The data reflects robust financial performance with increasing profitability and revenue growth over the six-year span. The brief downturn in 2020 across net income and revenues aligns with external economic disruptions but was followed by a recovery and strengthening of profit margins. The sustained high profitability levels suggest effective cost management and operational efficiency throughout the period.
Return on Equity (ROE)
Visa Inc., ROE calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 14,957) | 12,311) | 10,866) | 12,080) | 10,301) | 6,699) | |
| Equity | 35,581) | 37,589) | 36,210) | 34,684) | 34,006) | 32,760) | |
| Profitability Ratio | |||||||
| ROE1 | 42.04% | 32.75% | 30.01% | 34.83% | 30.29% | 20.45% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | 31.11% | 30.25% | 30.05% | 33.17% | — | — | |
| Adobe Inc. | 33.85% | 32.59% | 39.66% | 28.03% | — | — | |
| Cadence Design Systems Inc. | 30.93% | 25.39% | 23.69% | — | — | — | |
| CrowdStrike Holdings Inc. | -22.89% | -10.64% | -19.10% | — | — | — | |
| International Business Machines Corp. | 7.47% | 30.38% | 27.14% | — | — | — | |
| Intuit Inc. | 12.57% | 20.89% | 35.76% | 41.53% | — | — | |
| Microsoft Corp. | 43.68% | 43.15% | 37.43% | 38.35% | — | — | |
| Oracle Corp. | — | 262.43% | 83.94% | — | — | — | |
| Palantir Technologies Inc. | -14.57% | -22.71% | -76.61% | — | — | — | |
| Palo Alto Networks Inc. | -127.14% | -78.63% | -24.23% | -5.16% | — | — | |
| Salesforce Inc. | 2.48% | 9.81% | 0.37% | — | — | — | |
| ServiceNow Inc. | 6.46% | 6.22% | 4.18% | — | — | — | |
| Synopsys Inc. | 17.85% | 14.31% | 13.54% | 13.04% | — | — | |
| Workday Inc. | 0.65% | -8.62% | -19.33% | — | — | — | |
| ROE, Sector | |||||||
| Software & Services | 31.01% | 36.18% | 30.32% | — | — | — | |
| ROE, Industry | |||||||
| Information Technology | 39.03% | 42.37% | 35.70% | — | — | — | |
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
ROE = 100 × Net income ÷ Equity
= 100 × 14,957 ÷ 35,581 = 42.04%
2 Click competitor name to see calculations.
The financial data reveals several clear trends over the period examined. Net income demonstrates a generally upward trajectory, increasing from $6,699 million in 2017 to $14,957 million in 2022. Despite a slight dip in 2020, net income recovered strongly in subsequent years, indicating resilience and improved profitability.
Equity shows a steady but moderate increase from $32,760 million in 2017 to $37,589 million in 2021, followed by a decrease to $35,581 million in 2022. This suggests that while the company's net assets grew steadily during most years, there was some decline or capital adjustment at the end of the period.
Return on equity (ROE), expressed as a percentage, illustrates an overall improvement in profitability relative to equity. Starting at 20.45% in 2017, ROE increased significantly to 42.04% in 2022. This trend signals enhanced efficiency in generating profit from shareholders' equity, with a temporary decline in 2020 aligning with the net income dip but recovering and surpassing prior levels thereafter.
- Net Income
- Consistent upward trend with a notable dip in 2020, followed by rapid growth.
- Equity
- Gradual increase over the years with a slight reduction in the final year.
- ROE
- Strong growth overall, indicating improved profitability and efficient equity use despite temporary fluctuations.
Return on Assets (ROA)
Visa Inc., ROA calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 14,957) | 12,311) | 10,866) | 12,080) | 10,301) | 6,699) | |
| Total assets | 85,501) | 82,896) | 80,919) | 72,574) | 69,225) | 67,977) | |
| Profitability Ratio | |||||||
| ROA1 | 17.49% | 14.85% | 13.43% | 16.65% | 14.88% | 9.85% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | 14.55% | 13.68% | 13.78% | 16.04% | — | — | |
| Adobe Inc. | 17.51% | 17.70% | 21.66% | 14.22% | — | — | |
| Cadence Design Systems Inc. | 16.53% | 15.87% | 14.95% | — | — | — | |
| CrowdStrike Holdings Inc. | -6.49% | -3.39% | -10.09% | — | — | — | |
| International Business Machines Corp. | 1.29% | 4.35% | 3.58% | — | — | — | |
| Intuit Inc. | 7.45% | 13.29% | 16.70% | 24.78% | — | — | |
| Microsoft Corp. | 19.94% | 18.36% | 14.70% | 13.69% | — | — | |
| Oracle Corp. | 6.15% | 10.48% | 8.78% | — | — | — | |
| Palantir Technologies Inc. | -10.80% | -16.02% | -43.35% | — | — | — | |
| Palo Alto Networks Inc. | -2.18% | -4.87% | -2.95% | -1.24% | — | — | |
| Salesforce Inc. | 1.52% | 6.14% | 0.23% | — | — | — | |
| ServiceNow Inc. | 2.44% | 2.13% | 1.36% | — | — | — | |
| Synopsys Inc. | 10.45% | 8.66% | 8.27% | 8.31% | — | — | |
| Workday Inc. | 0.28% | -3.24% | -7.05% | — | — | — | |
| ROA, Sector | |||||||
| Software & Services | 11.39% | 12.27% | 9.67% | — | — | — | |
| ROA, Industry | |||||||
| Information Technology | 14.57% | 14.66% | 11.45% | — | — | — | |
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
ROA = 100 × Net income ÷ Total assets
= 100 × 14,957 ÷ 85,501 = 17.49%
2 Click competitor name to see calculations.
- Net Income
- The net income shows a generally increasing trend over the analyzed period. Starting from 6,699 million USD in 2017, it rose steadily to 12,080 million USD in 2019. Despite a slight decline in 2020 to 10,866 million USD, likely influenced by external factors, it rebounded to 12,311 million USD in 2021 and continued upward reaching 14,957 million USD in 2022. This indicates overall strong profitability with resilience to short-term disruptions.
- Total Assets
- Total assets consistently increased year over year, growing from 67,977 million USD in 2017 to 85,501 million USD in 2022. The growth slowed somewhat after 2019 but remained positive, reflecting ongoing investment or asset accumulation throughout the period. This steady asset base supports the operational scale of the company.
- Return on Assets (ROA)
- Return on assets exhibited a rising trend with some fluctuation. Starting at 9.85% in 2017, ROA increased to a peak of 16.65% in 2019. There was a decline in 2020 to 13.43%, which correlates with the slight drop in net income during the same year. Subsequent years show recovery and growth with ROA reaching the highest point of 17.49% in 2022. This suggests improving efficiency in asset utilization over the period, with a temporary dip potentially due to challenging conditions in 2020.