Visa Inc. (NYSE:V)

The data reveals several notable trends across the analyzed periods, illuminating the dynamics of operational efficiency and working capital management.

Receivables Turnover

The receivables turnover ratio demonstrates fluctuations with a marked decrease from 13.03 in 2018 to 7.54 in 2019, followed by a significant rebound to 17.28 in 2020. Afterwards, it trends moderately downward to 13.71 in 2021 before rising again to 15.17 in 2022. This pattern suggests variability in the efficiency with which receivables are collected, with the 2019 dip potentially indicating collection challenges or extended credit terms that year, while subsequent years reflect improvements in receivables management.

Payables Turnover

The payables turnover ratio mirrors a similar volatility. It declines from 9.51 in 2018 to 5.76 in 2019, then sharply increases to 12.58 in 2020 before gradually decreasing to 8.93 by 2022. The low turnover in 2019 may indicate slower payment to suppliers or increased payment deferrals, while the surge in 2020 points to quicker settlement of payables. The declining trend post-2020 suggests a relaxation in payment speed.

Working Capital Turnover

Working capital turnover presents variability with an initial improvement from 2.03 in 2017 to a peak of 3.04 in 2019. Thereafter, it falls to 1.66 in 2020 indicating lower efficiency in utilizing working capital, before recovering to 3.13 in 2022, the highest in the series. This reflects fluctuations in the company’s ability to generate sales from its working capital, with a notable dip during 2020 and strong recovery by 2022.

Average Receivable Collection Period

The average collection period aligns inversely with receivables turnover. It remains steady at 28 days in 2017-2018, then significantly lengthens to 48 days in 2019, indicating slower collections. Subsequently, it shortens dramatically to 21 days in 2020 and remains near this level through 2022. This reduction after 2019 highlights enhanced efficiency in collecting receivables post the 2019 increase.

Average Payables Payment Period

The average payment period shows marked variation. It starts at 40 days in 2017, slightly decreases to 38 days in 2018, then increases sharply to 63 days in 2019, indicating extended payment terms or delays. It decreases to 29 days in 2020, rises to 41 days in 2022, reflecting oscillating management of payables timing. The substantial extension in 2019 contrasts with the firmness in payment terms seen in 2020.

Overall, the data reflects a period of volatility around 2019, with both receivables and payables management showing considerable changes. This includes slower collections and payments in that year, potentially indicative of strategic shifts or external pressures. The subsequent years demonstrate recovery and improved efficiency in managing working capital components, with a notable return to shorter collection periods and balanced payment terms by 2022.

Net revenues

The net revenues demonstrate a generally upward trajectory over the analyzed period. Starting at 18,358 million US dollars in 2017, net revenues increased consistently, reaching 22,977 million in 2019. A slight decline occurred in 2020, with net revenues dropping to 21,846 million, likely reflecting external factors impacting that year. However, a robust recovery followed in 2021 and 2022, with revenues rising to 24,105 million and then substantially to 29,310 million, indicating strong growth momentum and improved performance in the most recent periods.

Settlement receivable

The settlement receivable values present more volatility compared to net revenues. Beginning at 1,422 million in 2017, these receivables increased to a peak of 3,048 million in 2019, more than doubling the 2017 figure. This surge could suggest changes in transaction volume or timing in settlements. In 2020, the figure dropped sharply to 1,264 million, followed by a moderate increase in 2021 to 1,758 million and then a further rise to 1,932 million in 2022. The fluctuations suggest variability in the company's settlement practices or conditions affecting receivable periods.

Receivables turnover ratio

The receivables turnover ratio experienced significant fluctuations during the timeframe. Initially stable at approximately 13.0 in 2017 and 2018, the ratio dropped notably to 7.54 in 2019, indicating a slower collection period or an increase in receivables relative to revenues that year. A marked reversal occurred in 2020, with the ratio jumping to 17.28, reflecting faster collections or improved efficiency. In 2021, the ratio decreased to 13.71, then increased modestly to 15.17 in 2022, suggesting some stabilization but still with variability. The oscillations in turnover ratio correspond with the trends seen in settlement receivables and the revenue changes over time.

The analysis of the data over the six-year period reveals several notable trends in the financial metrics presented.

Net Revenues

Net revenues exhibited a generally upward trajectory from 2017 to 2022. Starting at US$18,358 million in 2017, the figure increased annually, reaching US$22,977 million in 2019. There was a slight decline in 2020 to US$21,846 million, likely influenced by external factors affecting the economy. However, the revenues rebounded significantly in the following years, climbing to US$24,105 million in 2021 and reaching a peak of US$29,310 million in 2022, indicating strong revenue growth and recovery.

Settlement Payable

The settlement payable showed considerable fluctuations during the period. Initially, there was a steady increase from US$2,003 million in 2017 to US$3,990 million in 2019. This was followed by a sharp decline in 2020 to US$1,736 million, correlating with the dip in net revenues during the same year. Subsequently, settlement payable values rose again in 2021 and 2022, reaching US$2,443 million and US$3,281 million respectively. This pattern suggests volatility in settlement obligations, potentially linked to operational or market conditions.

Payables Turnover Ratio

The payables turnover ratio varied significantly over the analyzed years. It maintained a relatively high ratio above 9 in 2017 and 2018, indicating efficient management of payables. In 2019, there was a marked drop to 5.76, suggesting slower turnover. The ratio peaked sharply in 2020 at 12.58, which may reflect accelerated payments or a reduction in payables. The subsequent years saw a decline to 9.87 in 2021 and further to 8.93 in 2022, pointing towards a normalization in payable turnover activity.

Overall, the data portrays a company experiencing growth in net revenues with fluctuations in its settlement payable and payables turnover ratio. The variations in payable metrics may warrant further investigation to understand the underlying causes and their impact on liquidity and operational efficiency.

Working Capital

Working capital exhibited a fluctuating trend over the examined period. It decreased from 9,029 million US dollars in 2017 to 6,911 million US dollars in 2018, followed by a slight recovery in 2019 reaching 7,555 million US dollars. A significant increase occurred in 2020 with working capital rising sharply to 13,135 million US dollars. Subsequently, the figure declined to 11,868 million US dollars in 2021 and further dropped to 9,352 million US dollars in 2022, closing the period near the initial value.

Net Revenues

Net revenues showed a general upward trend throughout the period. Starting at 18,358 million US dollars in 2017, revenues increased steadily to 20,609 million in 2018 and 22,977 million in 2019. In 2020, there was a slight dip to 21,846 million US dollars, possibly reflecting external factors impacting revenue. However, net revenues rebounded strongly afterward, growing to 24,105 million in 2021 and reaching a peak of 29,310 million US dollars in 2022, representing significant growth overall.

Working Capital Turnover

The working capital turnover ratio demonstrated variability across the years. Starting at 2.03 in 2017, it improved substantially to 2.98 in 2018 and 3.04 in 2019, indicating more efficient use of working capital to generate revenues. In 2020, the ratio dropped markedly to 1.66, coinciding with the peak in working capital and dip in net revenues, suggesting a decline in operational efficiency. The ratio partially recovered to 2.03 in 2021 and further increased to 3.13 in 2022, surpassing previous highs and indicating enhanced efficiency in utilizing working capital by the end of the period.

The analysis of the annual financial data reveals noteworthy fluctuations in the receivables turnover ratio and the average receivable collection period over the six-year span. These metrics provide insights into the efficiency of the company's credit and collections processes.

Receivables Turnover Ratio

This ratio exhibits variability across the periods analyzed. It initially remains relatively stable between 12.91 in 2017 and 13.03 in 2018. A significant decline occurs in 2019, dropping sharply to 7.54, indicating a slower ability to collect receivables during that year. However, this trend reverses in the following years, with a pronounced increase to 17.28 in 2020, followed by a decrease to 13.71 in 2021, and a subsequent rise to 15.17 in 2022. This volatility suggests episodic changes in the company's efficiency in managing receivables, possibly influenced by external factors or internal policy adjustments.

Average Receivable Collection Period

The average collection period in days reflects an inverse pattern to the turnover ratio, which is consistent with their theoretical relationship. It remains steady at 28 days for 2017 and 2018, then experiences a notable increase to 48 days in 2019, coinciding with the lowest turnover ratio. This marks a significant slowdown in the collection process. Subsequently, the collection period shortens markedly to 21 days in 2020, indicating improved efficiency, before stabilizing around 27 days in 2021 and further reducing to 24 days in 2022. This trend suggests efforts to accelerate receivable collections after the spike in 2019.

Overall, the data indicates that the company faced some challenges in receivables management in 2019, leading to slower collections and reduced turnover efficiency. However, from 2020 onwards, there has been a recovery and improvement in the collection process, reflected in higher turnover ratios and shorter collection periods. The fluctuation points to dynamic operational or market conditions impacting receivable management during the period analyzed.

Payables Turnover

The payables turnover ratio exhibits notable fluctuations over the observed periods. It started at 9.17 in September 2017 and increased slightly to 9.51 in 2018, indicating a marginal improvement in the frequency of paying off suppliers. However, in 2019, this ratio declined significantly to 5.76, suggesting a slower payment cycle during that year. A strong recovery is observed in 2020 with a sharp increase to 12.58, the highest point in the dataset, indicating expedited payment processes in that year. Subsequently, the ratio decreased to 9.87 in 2021 and further to 8.93 in 2022, showing a gradual slowing down of payments but still higher than the ratio in 2017 and 2019.

Average Payables Payment Period

The average payables payment period inversely mirrors the payables turnover ratio trends. Beginning at 40 days in 2017, it reduced slightly to 38 days in 2018, indicating quicker payments. A considerable lengthening occurred in 2019, with the period extending to 63 days, reflecting delayed payments consistent with the lower turnover ratio. In contrast, 2020 shows a significant reduction to 29 days, the shortest period observed, aligning with the peak in the turnover ratio. The payment period then increased again to 37 days in 2021 and 41 days in 2022, signaling a return towards slower payment cycles but still shorter than the peak delay in 2019.

Overall Observations

The data indicates a period of payment management variability across the years. The year 2019 stands out for extended payment periods and reduced turnover, possibly due to operational or market factors delaying supplier payments. Conversely, 2020 reflects the opposite trend with rapid payments and high turnover, suggesting a strategic shift or improved liquidity management. The subsequent years show a moderation back toward more balanced payment timing. These fluctuations suggest adaptive payment practices in response to external conditions or internal financial strategies.