Topic: raTio analysis of fiserv Inc. & Intuit Inc.
from The year 2019 To 2022 reporT
Name ID
Muhammad Esa Rahman Mahim 2230969 Ratio calculation of the year 2019, all excel works
and report making.
Anika Fyruse 2130340 Ratio calculation of the year 2020.
Tofayel Ahmed 2222179 Ratio calculation of the year 2021.
Sa Rawshon Jamil 2222683 Ratio calculation of the year 2022.
Kafi Ahmed 2131298
Md Parvez Hasan 2110676
Date of submission: 30th March, 2024
Profit Margin
15.00%
14.26%
10.00%
10.42%
8.22%
5.00% 6.45%
0.00%
2019 2020 2021 2022
Fiserv's profit margin ratios throughout the assessed years show a varying but generally
encouraging trend. The ratio dropped to 6.45% in 2020 from a strong 10.42% in 2019, which
suggested effective cost control and income production. This decline may have been brought on
by operational difficulties or the economic slump. Even with a modest increase to 8.22% in
2021, it was still less than in 2019. The notable increase to 14.26% in 2022, however, suggests a
strong performance that may have been fueled by successful tactics, improved productivity, or
more income sources. This substantial improvement shows that Fiserv was able to take
advantage of chances and overcome obstacles, which is good news for its managerial and
financial stability.
Return on asset
3.50%
3.00%
2.50% 3.00%
2.00%
1.50%
1.70%
1.00% 1.28%
1.15%
0.50%
0.00%
2019 2020 2021 2022
AXIS TITLE
Fiserv's return on assets (ROA) shows a consistent upward trend from 2019 to 2022, suggesting
increased asset usage efficiency and possible higher profitability. The ROA grew marginally
from 1.15% in 2019 to 1.28% in 2020, indicating modest improvement. The significant increase
to 1.7% in 2021 suggests a more significant improvement, probably as a result of improved
operational efficiency or strategic repositioning. But the biggest jump was in 2022, when the
ROA shot up to 3%, demonstrating a notable improvement in asset management profitability and
efficiency. Overall, Fiserv's capacity to turn a profit in relation to its asset base is positively
reflected by these ROA trends, indicating strong financial performance and well-thought-out
resource allocation plans.
Return on equity
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2019 2020 2021 2022
From 2019 to 2022, Fiserv's return on equity (ROE) shows a steady rising trend, suggesting a
gradual improvement in the development of shareholder value. The ROE grew slightly from
2.7% in 2019 to 2.96% in 2020, indicating a pattern of moderate but steady growth. The notable
increase to 4.3% in 2021 indicates improved profitability in relation to shareholders' equity,
which could be the result of strategic efforts or operational improvements. The biggest jump,
nevertheless, came in 2022 when the ROE hit 8.2%, signifying a significant increase in
shareholder returns and a favorable reflection of Fiserv's managerial efficacy and financial
performance. Fiserv's capacity to produce larger returns for its shareholders during the assessed
period is demonstrated by this trend.
Receivables turnover
8
6
4
2
0
2019 2020 2021 2022
Fiserv's return on receivable turnover shows a variable trend during the assessed years,
suggesting changes in the company's effectiveness in receivable collection. The turnover ratio
grew dramatically from 3.08 times in 2019 to 5.98 times in 2020, indicating a notable
improvement in the company's capacity to turn receivables into cash. The ratio declined slightly
to 5.67 times in 2021 and then to 4.9 times in 2022, indicating that this peak was not maintained.
Despite the fact that the ratios were still high in 2020 and 2021, the drop in 2022 raises the
possibility of inefficiencies in the handling of receivables when compared to the prior years.
However, Fiserv's return on receivable turnover overall shows differing levels of efficacy in
handling its cash flow production and accounts receivable across the assessed period.
Average collection
150
100
50
0
2019 2020 2021 2022
The average number of days it takes to collect accounts receivable, or Fiserv's average collection
period, shows a shifting trend during the assessed years. The corporation showed notable
progress in the following years, after starting at a comparatively high 115.9 times in 2019, which
suggested a lengthier collection period and maybe slower cash conversion from sales. The
average collection period decreased to 60 times by 2020, indicating faster cash inflows and
improved efficiency in the management of receivables. Notwithstanding, there was a marginal
rise to 70.5 instances in 2021, succeeded by an additional surge to 72 instances in 2022,
indicating an extension in the duration required to retrieve receivables in contrast to the
preceding year. Although the pattern suggests some fluctuations in the business's capacity to
collect receivables.
Fixed asset turnover
0.4
0.3
0.2
0.1
0
2019 2020 2021 2022
Fiserv's fixed asset turnover shows a steady rising trend over the assessed years, indicating how
well the company uses its fixed assets to create revenue. The turnover ratio improved
dramatically to 0.254 times in 2020 from a low of 0.04 times in 2019, indicating a considerable
improvement in the use of fixed assets to generate revenue. This pattern persisted in 2021, as the
ratio increased even more to 0.28 times, demonstrating ongoing fixed asset usage efficiency. The
turnover ratio increased the maximum in 2022, reaching 0.314 times, indicating increased
income generation efficiency from fixed assets. Fiserv's growing fixed asset turnover ratios
generally point to increased resource and operational efficiency, which boosts the business's
profitability and financial performance.
Total asset turnover
0.3
0.2
0.1
0
2019 2020 2021 2022
Fiserv's total asset turnover, which gauges how well the business generates income in relation to
its total assets, improves noticeably between 2019 and 2022. The turnover ratio improved
dramatically to 0.19 times in 2020 from a very modest 0.030 times in 2019, showing a
significant improvement in asset use efficiency. With a constant total asset turnover of 0.21 times
in 2021 and 2022, this encouraging trend persisted. This shows that over the assessed years,
Fiserv has effectively maintained and improved its asset usage efficiency. The company's
capacity to exploit its assets to produce revenue and contribute to overall financial health and
profitability is demonstrated by a steady total asset turnover ratio. This pattern shows that Fiserv
can increase its revenue from their assets.
Current ratio
1.1
1.08
1.06
1.04
1.02
1
2019 2020 2021 2022
Throughout the years under review, Fiserv's current ratio—which gauges how well the company
can pay its short-term debts with its current assets—stayed largely consistent. The ratio began at
1.08 times in 2019 and gradually dropped to 1.037 times in 2020 before stabilizing at 1.03 times
in 2021. This indicates that, with a minor dip in 2020, Fiserv had enough current assets to meet
its short-term obligations during these years. In 2022, the ratio increased even more to 1.04
times, suggesting a minor improvement in the company's liquidity status. Overall, the stability of
the current ratio indicates that Fiserv maintained a balanced approach to managing its short-term
financial obligations relative to its current liabilities, even if the ratio was at or slightly above 1,
indicating adequate liquidity.
Debt to total asset
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2019 2020 2021 2022
Fiserv's debt to total asset ratio shows a downward trend between 2019 and 2022, which suggests
that the company is using less debt financing overall. The ratio dropped dramatically from 55%
in 2019 to 27.7% in 2020, indicating a considerable decline in the amount of debt utilized to
support the company's whole asset base. The ratio followed this pattern in 2021 and 2022,
staying comparatively steady at 27.8% and falling even lower to 25%, respectively. By
depending increasingly on equity financing or internal funds generation to support operations
and investments, Fiserv may have been able to strengthen its financial position and eventually
reduce its debt burden, as indicated by the dropping debt to total asset ratio. This pattern suggests
increased financial security and decreased financial risk for the company over the evaluated
period.
Profit Margin
2023
2022
2021
2020
2019
2018
2017
22.95% 23.80% 21.40% 16.23%
From 2019 to 2020, Intuit's profit margin ratios reflect a generally upward trend, with margins
consistently above 20%, a sign of robust profitability and effective cost control. In 2021, there
was a minor decrease to 21.4%, which might have been caused by a number of things like rising
costs or modifications to the business environment. The biggest decline was in 2022, when the
profit margin fell to 16.23%, indicating possible difficulties or changes that could affect Intuit's
profitability. Overall, even though Intuit's profit margins were reasonably high in comparison to
industry norms, the company's minor dip in 2022 calls for attention and more research to
determine the underlying causes of this shift.
Return on Asset
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2019 2020 2021 2022
Over the course of the evaluation years, Intuit's return on assets (ROA) shows a notable decline,
beginning at a strong 24.78% in 2019 and falling to 16.7% in 2020, suggesting a decline in
profitability in relation to its asset base. This declining trend persisted in 2021, as the ROA
dropped even lower to 13.28%, indicating possible difficulties in turning a profit on its assets.
The reduction peaked in 2022 when the ROA fell to 7.44%, a sign of a severe decline in
profitability or asset usage efficiency. These diminishing ROA numbers point to possible
difficulties or changes in Intuit's business practices, calling for more research into the variables
influencing its profitability and asset management approaches.
Return on equity
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2019 2020 2021 2022
Over the assessed years, Intuit's return on equity (ROE) shows a varied tendency. With a
startlingly high 41.5% in 2019, Intuit demonstrated robust profitability in relation to equity held
by shareholders. But in 2020, there was a downturn, with the ROE falling to 35.8%, perhaps as a
result of a number of variables like higher equity or worse profitability. This pattern persisted in
2021, when the ROE dropped even lower to 20.89%, suggesting possible difficulties in
producing returns for investors. The ROE did, however, experience a notable uptick in 2022,
rising to 121.56%. This increase may have been caused by modifications to the ownership
structure or very high profitability in relation to shareholder investment. Overall, even though
Intuit's return on equity (ROE) varied, the notable increase in 2022 calls for additional
investigation to determine the underlying causes of this abrupt shift.
Receivables turnover
100
80
60
40
20
0
2019 2020 2021 2022
Over the evaluated years, Intuit's return on receivable turnover shows a significant decrease,
suggesting shifts in the effectiveness of receivables management. Intuit effectively turned its
accounts receivable into cash in 2019, starting at an exceptionally high 77.9 times, demonstrating
robust cash flow and efficient credit management. The turnover ratio did, however, significantly
decline in 2020, falling to 51.5 times, indicating possible difficulties or adjustments to
receivables management tactics. This pattern persisted in 2021, when the ratio dropped even
lower to 24.6 times, pointing to a significant drop in the effectiveness of turning receivables into
cash. The turnover ratio did, however, show some improvement in 2022, rising to 28.53 times,
but it was still below the levels observed in prior years. As a whole, although Intuit's return on
receivable turnover fluctuated, the declining trend warrants closer examination to identify potential
factors impacting the company's cash flow and receivables management efficiency.
Average collection
15
10
0
2019 2020 2021 2022
Over the years under review, Intuit's average collection period—which measures the typical
number of days required to recover accounts receivable—shows a varied pattern. There was an
increase to 6.99 times in 2020, showing a longer time taken to collect receivables, from a
relatively low 4.62 times in 2019, indicating a short collection period and efficient cash
conversion from sales. With the average collection period staying high at 6.82 times in 2021, this
pattern persisted, suggesting possible difficulties or adjustments to receivables management
techniques. Nonetheless, 2022 saw a significant increase, with the average collection period
reaching 12 times, indicating a further extension of the amount of time required to collect
receivables in comparison to earlier years. In general, even if Intuit's typical collecting time
varied, the increasing trend in recent years suggests potential inefficiencies in receivables
management, which may warrant further analysis to identify underlying causes and implement
corrective measures.
Fixed asset turnover
8
7
6
5
4
3
2
1
0
2019 2020 2021 2022
Over the evaluated years, Intuit's fixed asset turnover ratio shows a fluctuating trend. The ratio
started off in 2019 at a comparatively strong 2.52 times, indicating effective use of fixed assets to
create income. In 2020, it stayed mostly steady at 2.6 times. The company's ability to produce
revenue from its fixed assets decreased significantly in 2021, as evidenced by the substantial
reduction to 0.92 times. The fixed asset turnover ratio continued to decline in 2022, reaching
0.56 times, a significant inefficiency in asset use. This trend continued. Such a drop raises the
possibility of difficulties or modifications to the business's asset base or operations that have
affected its capacity to make money from fixed assets. To determine the underlying cause of this
tendency, more investigation is necessary.
Total asset turnover
8
0
2019 2020 2021 2022
With a steady 1.08 times total asset turnover ratio in both 2019 and 2020, Intuit's performance is
consistent and demonstrates the company's capacity to efficiently generate revenue in relation to
its total assets over both years. The ratio did, however, noticeably diminish in 2021, falling to
0.62 times, indicating a decline in the effectiveness of asset utilization to produce revenue. The
company's ability to produce income from its total assets declined significantly in 2022, as seen
by the total asset turnover ratio dropping even further to 0.45 times. Such a drop raises the
possibility of issues with operational effectiveness or shifting company dynamics that affect
Intuit's capacity to make the best use of its resources to generate income. Additional research is
necessary to identify the underlying factors driving this decline and to implement strategies to
improve asset utilization efficiency and overall performance.
Current ratio
2.05
2
1.95
1.9
1.85
1.8
1.75
1.7
2019 2020 2021 2022
Throughout the evaluated years, Intuit's current ratio stayed comparatively steady, demonstrating
steady liquidity holdings. The ratio, which began at a solid 1.83 times in 2019 and was steady at
2 times in 2020, indicates that the business can meet its short-term liabilities with its present
assets. In 2021, this pattern persisted, with the current ratio somewhat declining to 1.94 times
while maintaining a high level of liquidity. In 2022, the current ratio did, however, revert to its
2019 level, standing at 1.83 times. The stability of the current ratio indicates that Intuit
maintained a balanced approach to managing its short-term financial obligations relative to its
current assets across the years, even if the ratios stayed above 1, showing ample liquidity to
satisfy short-term obligations.
Debt to total asset
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2019 2020 2021 2022
Over the years under evaluation, Intuit's debt to total asset ratio shows a varying trend that
reflects shifts in the company's leverage and financial structure. Starting in 2019 at 40.33%,
which is a comparatively high percentage of debt compared to total assets, there was a
discernible drop to 33.33% in 2020, demonstrating a decline in the company's dependence on
debt financing. This declining trend persisted in 2021, when the ratio sharply declined to 15.9%,
indicating a significant decline in the percentage of debt utilized to fund the company's whole
asset base. The ratio did, however, slightly increase in 2022, reaching 24%, even if it was still
lower than in 2019. This variation points to possible deliberate alterations in Intuit's financial
structure or financing choices over the assessed period. Overall, the decreasing trend in debt to
total asset ratio indicates a potential improvement in financial stability and risk management for
Intuit.
Fiserv outperforms Intuit in terms of consistent and favorable financial performance across a
range of parameters, according to the ratio analysis presented for both companies. Fiserv's
continuous liquidity position, rising return on equity (ROE) and return on assets (ROA), and
steady profit margins all point to effective management and solid financial foundation. On the
other hand, Intuit's varying ROE and diminishing profitability metrics—especially a noticeable
drop in ROA—raise questions about its asset management strategies and financial performance.
Therefore, it appears more advantageous to buy in Fiserv based only on the supplied ratio
analysis. However, before making a final investment decision, more study is necessary, taking
into account other elements like the industry outlook and competition stance.
Upon examination, Fiserv and Intuit demonstrate a range of financial outcomes, accompanied by
discernible advantages and disadvantages. Fiserv's profitability indicators, which include profit
margin ratios, return on equity (ROE), and return on assets (ROA) indicate a usually favorable
trend. This suggests that cost containment and asset management are working well. While a
steady current ratio indicates constant liquidity, variations in return on receivable turnover and
the average collection period point to possible difficulties in effectively managing receivables.
However, Intuit's financial picture shows more volatility, which is especially noticeable when
looking at its profitability measurements, which show notable drops in ROA and ROE over the
evaluated period. Even with a generally stable current state, inefficiencies in the handling of
receivables create additional difficulties, as demonstrated by variations in the average collection
period and return on receivable turnover.
Offering raw material credit to either company carries risks because of the highlighted volatility
in profitability metrics and inefficiencies in receivables management, even though both have
strengths in debt management. Although Fiserv's steady cash position provides some security,
there may still be dangers due to persistent difficulties in managing short-term finances. In a
similar vein, Intuit's erratic profitability and operational inefficiencies call for cautious
assessment, highlighting the significance of a comprehensive review prior to granting raw
material credit. Basically, to reduce the risks involved in extending raw material credit, a fair
evaluation of each company's credit management procedures, operational effectiveness, and
financial stability is essential.
Lending long term loan as a banker to the specified
Fiserv's request for a long-term loan looks good based on Intuit's and Fiserv's financial analyses.
Fiserv has shown steady progress in a number of financial indicators, such as asset turnover
ratios, profit margins, return on equity (ROE), and return on assets (ROA). These encouraging
patterns point to possibilities for stable growth, good cost control, and efficient asset
management. Fiserv has also demonstrated sound financial management, as seen by its declining
debt to total asset ratio, which improves overall stability and lowers long-term financing
concerns. On the other hand, because of Intuit's erratic profitability, uneven operational
effectiveness, and mounting debt, giving it a long-term loan could be hazardous.
Concerns over Intuit's capacity to sustainably service long-term loan commitments are raised by
the pattern of lowering key financial ratios, which calls for a more cautious approach and careful
consideration before making a lending decision. In summary, whereas Fiserv offers a more
auspicious picture for long-term funding, Intuit's financial results necessitate greater examination
and possible risk reduction strategies.
Fiserv is the better investment choice overall, as evidenced by its reliable and strong financial
performance across a range of criteria that point to strong management and sound financial
standing. Before making any final investment decisions, though, a thorough analysis that takes
the industry forecast and competitors into account is essential. Both Fiserv and Intuit have
advantages and disadvantages when it comes to credit extension, which emphasizes the necessity
for a careful assessment of credit management procedures and monetary stability. While Fiserv's
consistent growth points to a positive future for long-term loan approvals, Intuit's erratic
profitability and mounting debt call for a more cautious approach, highlighting the significance
of due diligence and risk-reduction measures before extending long-term credit to either
company.
