Visa Overview: Visa Inc. offers a global payment technology platform that provides payment gateway processing network and helps financial institutions and merchants in global commerce and enables digital currency payment instead cash or checks. Furthermore, Visa owns, operates and facilitates the processing of transactions on behalf of financial institutions and merchants through VisaNet, one of the world's most advanced processing networks capable of handling more than 10,000 transactions per second. It also owns other form of payment brands, such as: Visa Electron, PLUS, and Interlink. In addition, it provides other value-added processing services, such as: risk management, debit issuer processing, loyalty and dispute management.
It is important to say that Visa generates its revenues from the transactions processing services. Visa does not issue cards or extends credit for consumers. Instead, Visa provides financial institutions with its branded systems that they can use to extend credit, debit or prepaid cash. In other words, Visa doesn't lend money to cardholders, is the banks that hold the credit.
Visa is one of the leader credit companies. In 2008, Visa shared 38.3% of the credit card market and 60.7% of the debit card market in 2008 in the U.S. And in 2010, 54% of the global market share. It is and it is headquartered in San Francisco, California and it was incorporated in 1970.
Yahoo Investing (2010), Visa Inc profile. Retrieved on April 27, 2010, From:
http://finance.yahoo.com/q/pr?s=V
Products and services:
By Partnering with financial institutions around the world, Visa allows millions of consumers all over the world to pay ahead; to pay with credit or with debit in a safe and convenient form that meet today's global shoppers. These forms of payments are accepted in more than 200 countries, at grocery stores, gas stations, hotels, airlines and online stores, among many others; surely, an experience that provides convenience to shoppers.
Such services are available to consumers and retailers around the world thru Visa's network, "VisaNet", a synchronized data network that counts with two data centers in two different continents, linked by 1.2 million miles of fiber-optic line.
Yahoo.com, (2010). About Visa. Retrieved on April 27, 2010, From:
http://corporate.visa.com/about-visa/products-and-services-index.shtml
Executive Team:
Joseph W. Saunders ,
Chairman and Chief Executive Officer.
Elizabeth Buse
Group Executive, International.
James McCarthy
Global Head of Product.
Joshua R. Floum
General Counsel and Corporate Secretary.
Oliver Jenkyn
Global Head of Strategy and Corporate Development.
Antonio Lucio
Chief Marketing Officer.
John Partridge
President.
Byron H. Pollitt
Chief Financial Officer.
Ellen Richey
Chief Enterprise Risk Officer.
William M. Sheedy
Group President, The Americas.
Visa Inc. (2010). About Visa, Executive Team (2010). Retrieved April 29, 2001, from:
http://corporate.visa.com/about-visa/executive-leadership-index.shtml
Mission and Values:
Financial Inclusion and Literacy
Visa's believe is that an economy can prosper if "all people", low, medium and high income, have access to financial services and tools to manage their daily finances. The reason is because financial security gives people the opportunity to afford expected and unexpected expenses, such as pay for school, books, hospital bills, car repair expenses, etc. This is basically buying power, an important factor for not only the benefit of retail stores, factories and the economy, but also for the people who posses it. For that reason, Visa continuously creates and tailors products and services that create opportunities and give access to financial power to everyone.
Visa Inc. (2010). About Visa, Corporate Responsibility, Financial Inclusion. Retrieved April 30, 2001, from:
http://corporate.visa.com/corporate-responsibility/financial-inclusion-index.shtml
Responsible Business Practices
As a world company, Visa understands the need to operate under the highest ethical and professional standards and commits to work with business partners who share the same vision.
Visa Inc. (2010). About Visa, Corporate Responsibility, Responsible Business Practices. Retrieved April 30, 2010, from:
http://corporate.visa.com/corporate-responsibility/responsible-business-practices-index.shtml
Governance and Ethics
Visa Believes that in order to obtain the trust from its financial institution clients, cardholders and retailers, Visa must act under the highest global business standards; something that adopts and applies to all its activities, employees and directors and has become the pillat of its business.
Visa Inc. (2010). About Visa, Corporate Responsibility, Responsible Business, Governance and Ethics. Retrieved April 30, 2010, from:
http://corporate.visa.com/corporate-responsibility/responsible-business-practices/governance-and-ethics.shtml
Diversity
Visa Inc. recognizes that due to the interactions between companies and different cultures and clients in today's global marketplace, diversity is an integral part of every business plan. Therefore, Visa as a global company extends its commitment to employees from diverse backgrounds and abilities by giving equal opportunities to people regardless of their gender or background. Visa also believes diversity is an important need not only to comply with today's global economies, but also to become a preferred employer.
Visa Inc. (2010). About Visa, Corporate Responsibility, Responsible Business, Diversity. Retrieved April 30, 2010, from:
http://corporate.visa.com/corporate-responsibility/responsible-business-practices/Diversity.shtml
Environmental
Visa sees the need of understanding the impact of its business to the environment, and assigned such task to a group of its people. This group of people is in charge of implementing environment friendly practices and programs, such as: promoting green ideas for its products, among its employees and adopting environment friendly workplace operations. In many of their branches they reduced water and energy consumption and in some offices in California they adopted waste management programs that were recognized by government officials.
Visa Inc. (2010). About Visa, Corporate Responsibility, Responsible Business, Environmental. Retrieved April 30, 2010, from:
http://corporate.visa.com/corporate-responsibility/responsible-business-practices/environmental.shtml
VISA INC Income Statement
A glance at the pro-forma income sheet shows that Visa is moving relatively light for a company that reported operating revenues of $6.26 billion in 2008. This is something quite impressive for a company that is in the credit business and faced one of the rose credit markets in history and when most of its competitors suffered the effects of a bad economy during 2008, reporting negative numbers.
But thanks to Visa's business strategy, Visa has been able to report positive numbers on each of the last 5 years, and considering that Visa holds 48% market share of the U.S. debit card market, compared to 14 percent at MasterCard, we can expect Visa to continue this trend.
Annual
2009
2008
2007
2006
2005
Period End Date
09/30/2009
09/30/2008
09/30/2007
09/30/2006
09/30/2005
Period Length
12 Months
12 Months
12 Months
12 Months
12 Months
Stmt Source
10-K
10-K
10-K
10-K
10-K
Stmt Source Date
11/20/2009
11/21/2008
11/21/2008
11/21/2008
12/21/2007
Stmt Update Type
Updated
Updated
Reclassified
Reclassified
Reclassified
Revenue
6,286.0
5,694.0
3,310.0
2,668.0
2,421.76
Other Revenue, Total
625.0
569.0
280.0
280.0
242.85
Total Revenue
6,911.0
6,263.0
3,590.0
2,948.0
2,664.61
Cost of Revenue, Total
1,143.0
1,199.0
721.0
671.0
618.72
Gross Profit
5,143.0
4,495.0
2,589.0
1,997.0
1,803.04
Selling/General/Administrative Expenses, Total
2,002.0
2,125.0
1,539.0
1,386.0
1,460.63
Research & Development
0.0
0.0
0.0
0.0
0.0
Depreciation/Amortization
226.0
237.0
126.0
138.0
0.0
Interest Expense (Income), Net Operating
0.0
0.0
0.0
0.0
0.0
Unusual Expense (Income)
2.0
1,470.0
2,653.0
23.0
132.33
Other Operating Expenses, Total
0.0
0.0
0.0
0.0
0.0
Operating Income
3,538.0
1,232.0
-1,449.0
730.0
452.92
Interest Income (Expense), Net Non-Operating
0.0
0.0
0.0
0.0
0.0
Gain (Loss) on Sale of Assets
0.0
0.0
0.0
0.0
0.0
Other, Net
2.0
35.0
0.0
0.0
0.0
Income Before Tax
4,000.0
1,336.0
-1,387.0
722.0
456.25
Income Tax - Total
1,648.0
532.0
-316.0
251.0
183.3
Income After Tax
2,352.0
804.0
-1,071.0
471.0
272.95
Minority Interest
1.0
0.0
-5.0
-16.0
-8.25
Equity In Affiliates
0.0
0.0
0.0
0.0
0.0
U.S. GAAP Adjustment
0.0
0.0
0.0
0.0
0.0
Net Income Before Extra. Items
2,353.0
804.0
-1,076.0
455.0
264.7
MSN, Microsoft (2010). Investing, Stocks, Income Statement, Visa. Retrieved April 26, 2010, from:
http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=V
Annual Balance Sheet
PERIOD ENDING
09/2009
09/2008
Balance Sheet - Assets
Cash and Equivalents
4,617,000
4,979,000
Restricted Cash
1,365,000
1,298,000
Marketable Securities
115,000
355,000
Accounts Receivable
444,000
342,000
Other Receivable
605,000
1,131,000
Receivables
1,049,000
1,473,000
Prepaid Expenses
366,000
1,190,000
Current Deferred Income Taxes
703,000
944,000
Other Current Assets
1,026,000
935,000
Total Current Assets
9,241,000
11,174,000
Land & Improvements
71,000
71,000
Building & Improvements
629,000
369,000
Machinery, Furniture & Equipment
598,000
519,000
Construction in Progress
43,000
266,000
Other Fixed Assets
688,000
531,000
Total Fixed Assets
2,029,000
1,756,000
Gross Fixed Assets (Plant, Prop. & Equip.)
2,029,000
1,756,000
Accumulated Depreciation & Depletion
825,000
676,000
Net Fixed Assets (Net PP&E)
1,204,000
1,080,000
Intangibles
10,883,000
10,883,000
Cost in Excess
10,208,000
10,213,000
Other Non-Current Assets
745,000
1,631,000
Total Non-Current Assets
23,040,000
23,807,000
Total Assets
32,281,000
34,981,000
Balance Sheet - Liabilities, Stockholders Equity
Accounts Payable
790,000
159,000
Short Term Debt
12,000
51,000
Accrued Liabilities
2,544,000
3,424,000
Other Current Liabilities
1,096,000
3,531,000
Total Current Liabilities
4,442,000
7,165,000
Long Term Debt
44,000
55,000
Deferred Income Taxes
3,807,000
3,811,000
Other Non-Current Liabilities
795,000
2,809,000
Minority Interest
4,000
*
Total Non-Current Liabilities
4,650,000
6,675,000
Total Liabilities
9,092,000
13,840,000
Common Stock Equity
23,189,000
21,141,000
Additional Paid In Capital
21,160,000
21,060,000
Retained Earnings
2,219,000
186,000
Treasury Stock
(2,000)
(35,000)
Other Equity Adjustments
(188,000)
(70,000)
Total Capitalization
23,233,000
21,196,000
Total Equity
23,189,000
21,141,000
Total Liabilities & Stock Equity
32,281,000
34,981,000
Cash Flow
3,813,000
2,202,000
Working Capital
4,799,000
4,009,000
Free Cash Flow
(66,000)
23,000
Invested Capital
23,233,000
21,196,000
Forbes (2010). Markets, Balance Sheet, Visa. Retrieved May 1, 2010, from:
http://finapps.forbes.com/finapps/jsp/finance/compinfo/FinancialIndustrial.jsp?tkr=V
Visa Inc: Key Ratios
Financial ratios can be used to analyze trends and to compare the company's financials to those of other firms, but they are the main indicators of a company's performance and financial status.
Sales ratio: Shows sales over the past five years and trading at 12 months.
Net Income: Is the remainder of subtracting all the costs from a Visa's revenues.
Dividend ratio: The payment made to shareholders as a profit made by Visa.
Growth Rates %
Company
Industry
S&P 500
Sales (Qtr vs year ago qtr)
12.70
8.90
10.70
Net Income (YTD vs YTD)
32.90
128.40
14.30
Net Income (Qtr vs year ago qtr)
32.90
-2.30
97.50
Sales (5-Year Annual Avg.)
23.26
16.00
7.75
Net Income (5-Year Annual Avg.)
61.25
27.41
8.24
Dividends (5-Year Annual Avg.)
NA
1.94
4.97
Current P/E ratio: Is value of the price paid for a share relative to the annual net income or profit earned by a company's per share. Something important to note is that companies with high P/E ratios can be considered "risky" investments than those with low P/E ratios
Price/Sales ratio: Is the ratio of the market value of equity to the sales.
Book Value: Are Visa's assets minus its liabilities.
Price/Cash Flow ratio: Is the measure of the market's expectations of Visa's future financial health
Price Ratios
Company
Industry
S&P 500
Current P/E Ratio
26.8
36.9
24.1
P/E Ratio 5-Year High
NA
6.5
12.0
P/E Ratio 5-Year Low
NA
2.2
1.8
Price/Sales Ratio
9.75
7.17
2.16
Price/Book Value
3.02
4.50
4.61
Price/Cash Flow Ratio
24.50
18.70
16.40
Gross Margin ratio: A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold.
Pre-tax profit Margin ratio: is net profit before taxes divided by net sales.
Net Profit Margin ratio: is how much profit a company makes for every dollar it generates in revenue or sales, after taking account of the cost of sales, the administration costs, the selling and all other costs, the net profit is the profit that is left, out of which they will pay interest, tax, dividends
Profit Margins %
Company
Industry
S&P 500
Gross Margin
82.4
50.9
38.3
Pre-Tax Margin
59.7
20.3
14.2
Net Profit Margin
35.6
19.0
10.5
5Yr Gross Margin (5-Year Avg.)
78.6
58.1
37.9
5Yr PreTax Margin (5-Year Avg.)
22.9
12.4
15.9
5Yr Net Profit Margin (5-Year Avg.)
12.6
6.8
11.3
Debt/Equity ratio: Is the most important financial ratio. The reason is because a high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a consequence of additional interest expenses. But in the case of Visa, I believe investors can expect profits.
Current ratio: is a financial ratio used to test a company's liquidity (also referred to as its current or working capital position) by deriving the proportion of current assets available to cover current liabilities.
Quick ratio: Also known the quick assets ratio is a liquidity indicator that refines the current ratio by measuring the amount of the most liquid current assets.
Interest coverage ratio: is used to determine how easily a company can pay interest expenses on outstanding debt.
Financial Condition
Company
Industry
S&P 500
Debt/Equity Ratio
0.00
0.33
1.39
Current Ratio
2.4
2.0
1.4
Quick Ratio
2.4
2.0
1.2
Interest Coverage
NA
9.6
27.2
Return on Equity ratio: It is used as a general indication of the company's efficiency, based on how well a company used reinvested earnings to generate additional earnings.
Return on Assets ratio: calculates the return on all capital, from both creditors and owners.
Return on Capital ratio: calculates the return on all capital, from owners only.
Investment Returns %
Company
Industry
S&P 500
Return On Equity
11.8
21.0
20.5
Return On Assets
8.5
8.3
7.3
Return On Capital
9.7
14.3
9.8
Return On Equity (5-Year Avg.)
NA
13.3
16.4
Return On Assets (5-Year Avg.)
NA
5.3
7.6
Return On Capital (5-Year Avg.)
NA
9.9
10.3
Income/Employee ratio: Represents a company's net income divided by the number of employees.
Revenue per employee ratio: Measures the average revenue created by each employee of Visa and It can be calculated by dividing a firm's revenue by its total number of workers.
Receivable Turnover ratio: Tells us Visa's effectiveness in terms of qualifying their credit borrowers and collecting money owed from them.
Inventory Turnover ratio: Shows how frequently Visa sells or uses inventory from its system with a given financial report.
Asset Turnover ratio: Shows the sales produced for every dollar of assets owned.
Management Efficiency
Company
Industry
S&P 500
Income/Employee
476,842
180,178
88,932
Revenue/Employee
1 Mil
592,590
858,468
Receivable Turnover
15.5
20.0
14.1
Inventory Turnover
NA
15.1
9.9
Asset Turnover
0.2
0.8
0.8
MSN, Microsoft (2010). Money, Investing, Stocks, Visa Inc. Key Ratios. Retrieved May 02, 2010, from:
http://moneycentral.msn.com/investor/invsub/results/compare.asp?Symbol=V
