Introduction In units 2 and 3 you worked on ratio calculations and received feedback on these assignments.? In this unit, you

Introduction

In units 2 and 3 you worked on ratio calculations and received feedback on these assignments.  In this unit, you will provide a brief written analysis of the ratios for Mastercard.  Evaluation should be submitted in an MS Word document of at least 2 pages and no more than three pages and be concise, clear and professional.

 

This is an Individual Assignment

Directions

Evaluation of Mastercard should include:

  1. A discussion of the ratios calculated in relation to the respective financial diagnostic categories (profitability, liquidity, leverage, operating returns).
  2. Discuss the importance of the ratio in financial analysis.
  3. Other information pertinent to Mastercard which could affect their future performance and stock price.

Unit 5: Individual Assignment – Ratio Analysis

Introduction

In units 2 and 3 you worked on ratio calculations and received feedback on these assignments.  In this unit, you will provide a brief written analysis of the ratios for Mastercard.  Evaluation should be submitted in an MS Word document of at least 2 pages and no more than three pages and be concise, clear and professional.

Directions

Evaluation of Mastercard should include:

1. A discussion of the ratios calculated in relation to the respective financial diagnostic categories (profitability, liquidity, leverage, operating returns).

2. Discuss the importance of the ratio in financial analysis.

3. Other information pertinent to Mastercard which could affect their future performance and stock price.

Week 2 Review

Your work was good. You have placed your ratio calculations in the PayPal Financial MS Excel on the Ratios sheet for 2013 -2015. You have provided the formula used to calculate each ratio in the column to the right of your calculations. Your work was clear and complete.

Mitchell Miller , Jan 24 at 8:38am

Week 3 Review

Your work was good. You have placed your ratio calculations in the MS Excel table template for Mastercard for 2017 -2019. You have provided the formula used to calculate each ratio in the column to the right of your calculations. Your work was clear and complete.

Mitchell Miller , Feb 6 at 2:31pm

Research Project – Ratio Analysis

Research Project – Ratio Analysis

Criteria

Ratings

Pts

This criterion is linked to a Learning OutcomeWritten Evaluation

25 to >22.5 pts

Excellent

Demonstrate critical thinking in the discussion of ratios in relation to the respective financial diagnostic categories. Evaluate the ratios of the selected company in an organized manner. Present other information pertinent to the corporation that could affect its future performance and stock price. Professional writing which is free of grammatical, spelling, and/or punctuation errors. The style of writing facilitates a professional style.

22.5 to >20.0 pts

Meets Expectations

Demonstrate critical thinking in the discussion of ratios in relation to the respective financial diagnostic categories. Evaluate the ratios of the selected company in an organized manner. Some errors present in reasoning in analysis. Present other information pertinent to the corporation that could affect its future performance and stock price. Professional writing which has minor grammatical, spelling, and/or punctuation errors. The style of writing demonstrates a professional style.

20 to >18.0 pts

Below Expectations

Limited discussion of ratios with some relation to the respective financial diagnostic categories. Evaluate the ratios of the selected company in a somewhat organized manner. Does not present other information pertinent to the corporation that could affect its future performance and stock price. Make a recommendation regarding the future of this corporation. Recommendation is not supported by calculations. Professional writing which has grammatical, spelling, and/or punctuation errors.

18 to >0 pts

Insufficient

Missing or incomplete discussion of ratios with little relation to the respective financial diagnostic categories. Evaluation of some ratios of the company, but not well organized manner. Does not present other information pertinent to the corporation that could affect its future performance and stock price. Written responses contain numerous grammatical, spelling, and/or punctuation errors. The style of writing does not facilitate effective communication.

,

Ratios

2013 2014 2015 FORMULA
PROFITABILITY RATIOS
PYPL GROSS MARGIN 65.26% 64.91% 63.03% Gross Profit / Sales
PYPL OPERATION MARGIN -49.04% -49.11% -46.71% Operating Earnings/Sales Revenue
PYPL NETPROFIT MARGIN 14.20% 5.22% 13.28% Net Profit / Total Revenue
LIQUIDITY RATIO
PYPL CURRENT RATIO 1.24 1.29 1.37 Current Assets / Current Liabilities
PYPL CASH RATIO 0.17 0.17 0.25 (Cash and cash equivalents + Marketable securities) ÷ Current liabilities
LEVERAGE RATIOS
PYPL DEBT TO EQUITY 1.59 1.66 1.10 Total Liabilities/Shareholder Equity
OPERATION RETURNS
PYPL ROE 12.92% 5.08% 8.93% Net Income / Shareholders’ Equity
PYPL ROA 4.98% 1.91% 4.25% Net Income / Total Assets

Income Statement

PYPL_income-statement_Annual_As_Originally_Reported 2013 2014 2015
Gross Profit 4,390,000,000 5,209,000,000 5,829,000,000
Total Revenue 6,727,000,000 8,025,000,000 9,248,000,000
Business Revenue 6,727,000,000 8,025,000,000 9,248,000,000
Cost of Revenue -2,337,000,000 -2,816,000,000 -3,419,000,000
Cost of Goods and Services -2,337,000,000 -2,816,000,000 -3,419,000,000
Other Cost of Revenue
Operating Income/Expenses -3,299,000,000 -3,941,000,000 -4,320,000,000
Selling, General and Administrative Expenses -2,119,000,000 -2,535,000,000 -2,765,000,000
General and Administrative Expenses -1,328,000,000 -1,537,000,000 -1,780,000,000
Selling and Marketing Expenses -791,000,000 -998,000,000 -985,000,000
Research and Development Expenses -727,000,000 -890,000,000 -947,000,000
Depreciation, Amortization and Depletion -453,000,000 -516,000,000 -608,000,000
Depreciation and Amortization -453,000,000 -516,000,000 -608,000,000
Total Operating Profit/Loss 1,091,000,000 1,268,000,000 1,509,000,000
Non-Operating Income/Expenses, Total -7,000,000 -7,000,000 -21,000,000
Total Net Finance Income/Expense
Net Interest Income/Expense
Interest Expense Net of Capitalized Interest
Interest Income
Net Investment Income
Gain/Loss on Investments and Other Financial Instruments
Irregular Income/Expenses 0 0 -48,000,000
Restructuring and Reorganization Income/Expense 0 0 -48,000,000
Other Income/Expense, Non-Operating -7,000,000 -7,000,000 27,000,000
Pretax Income 1,084,000,000 1,261,000,000 1,488,000,000
Provision for Income Tax -129,000,000 -842,000,000 -260,000,000
Net Income from Continuing Operations 955,000,000 419,000,000 1,228,000,000
Net Income after Extraordinary Items and Discontinued Operations 955,000,000 419,000,000 1,228,000,000
Net Income after Non-Controlling/Minority Interests 955,000,000 419,000,000 1,228,000,000
Net Income Available to Common Stockholders 955,000,000 419,000,000 1,228,000,000
Diluted Net Income Available to Common Stockholders 955,000,000 419,000,000 1,228,000,000
Total Revenue as Reported, Supplemental 6,727,000,000 8,025,000,000 9,248,000,000
Operating Expense as Reported, Supplemental -5,636,000,000 -6,757,000,000 -7,787,000,000
Total Operating Profit/Loss as Reported, Supplemental 1,091,000,000 1,268,000,000 1,461,000,000
Reported Effective Tax Rate 0.119 0.67 0.175
Reported Normalized Income 1,186,000,000 1,343,000,000 1,588,000,000
Reported Normalized Operating Profit 1,411,000,000 1,648,000,000 1,975,000,000
Basic EPS 0.31 1.00
Basic EPS from Continuing Operations 0.31 1.00
Diluted EPS 0.31 1.00
Diluted EPS from Continuing Operations 0.31 1.00
Basic Weighted Average Shares Outstanding 1,251,000,000 1,222,000,000
Diluted Weighted Average Shares Outstanding 1,262,000,000 1,229,000,000
Reported Normalized Diluted EPS 1.10 1.29
Basic EPS 0.31 1.00
Diluted EPS 0.31 1.00
Basic WASO 1,251,000,000 1,222,000,000
Diluted WASO 1,262,000,000 1,229,000,000
Fiscal year ends in Dec 31 | USD

Balance Sheet

PYPL_balance-sheet_Annual_As_Originally_Reported 2013 2014 2015
Total Assets 19,160,000,000 21,917,000,000 28,881,000,000
Total Current Assets 14,620,000,000 17,565,000,000 20,648,000,000
Cash, Cash Equivalents and Short Term Investments 1,925,000,000 2,230,000,000 3,411,000,000
Cash and Cash Equivalents 1,604,000,000 2,201,000,000 1,393,000,000
Short Term Investments 321,000,000 29,000,000 2,018,000,000
Trade and Other Receivables, Current 12,428,000,000 14,957,000,000 16,582,000,000
Trade/Accounts Receivable, Current 9,329,000,000 10,677,000,000 12,398,000,000
Loans Receivable, Current 2,789,000,000 3,586,000,000 4,184,000,000
Notes Receivable, Current 310,000,000 694,000,000 0
Prepayments and Deposits, Current 655,000,000
Other Current Assets 267,000,000 378,000,000
Total Non-Current Assets 4,540,000,000 4,352,000,000 8,233,000,000
Net Property, Plant and Equipment 858,000,000 922,000,000 1,344,000,000
Gross Property, Plant and Equipment 2,403,000,000 2,862,000,000 3,849,000,000
Properties 328,000,000 348,000,000 649,000,000
Land and Improvements 162,000,000 162,000,000 352,000,000
Leasehold and Improvements 166,000,000 186,000,000
Buildings and Improvements 297,000,000
Machinery, Furniture and Equipment 1,983,000,000 2,350,000,000 3,067,000,000
Furniture, Fixtures and Office Equipment 1,983,000,000 2,350,000,000 3,067,000,000
Construction in Progress and Advance Payments 92,000,000 164,000,000 133,000,000
Accumulated Depreciation and Impairment -1,545,000,000 -1,940,000,000 -2,505,000,000
Accumulated Depreciation -1,545,000,000 -1,940,000,000 -2,505,000,000
Net Intangible Assets 3,445,000,000 3,345,000,000 4,427,000,000
Gross Goodwill and Other Intangible Assets 4,185,000,000 4,162,000,000 5,359,000,000
Goodwill 3,187,000,000 3,189,000,000 4,069,000,000
Intangibles other than Goodwill 998,000,000 973,000,000 1,290,000,000
Software and Technology 169,000,000 167,000,000 245,000,000
Other Intangible Assets 829,000,000 806,000,000 1,045,000,000
Accumulated Amortization and Impairment -740,000,000 -817,000,000 -932,000,000
Accumulated Amortization of Intangible Assets -740,000,000 -817,000,000 -932,000,000
Accumulated Amortization of Intangibles other than Goodwill -740,000,000 -817,000,000 -932,000,000
Accumulated Amortization of Software and Technology -136,000,000 -153,000,000 -176,000,000
Accumulated Amortization of Other Intangible Assets -604,000,000 -664,000,000 -756,000,000
Total Long Term Investments 196,000,000 31,000,000 2,348,000,000
Other Non-Current Assets 41,000,000 54,000,000 114,000,000
Total Liabilities 11,770,000,000 13,669,000,000 15,122,000,000
Total Current Liabilities 11,261,000,000 13,283,000,000 13,617,000,000
Payables and Accrued Expenses, Current 10,158,000,000 12,190,000,000 13,617,000,000
Trade and Other Payables, Current 9,387,000,000 10,756,000,000 12,438,000,000
Trade/Accounts Payable, Current 9,350,000,000 10,727,000,000 12,406,000,000
Taxes Payable, Current 37,000,000 29,000,000 32,000,000
Accrued Expenses, Current 771,000,000 1,434,000,000 1,179,000,000
Financial Liabilities, Current 1,103,000,000 1,093,000,000 0
Current Debt and Capital Lease Obligation 1,103,000,000 1,093,000,000 0
Current Debt 1,103,000,000 1,093,000,000 0
Notes Payable, Current Debt 1,103,000,000 1,093,000,000 0
Total Non-Current Liabilities 509,000,000 386,000,000 1,505,000,000
Financial Liabilities, Non-Current 509,000,000 386,000,000
Long Term Debt and Capital Lease Obligation 509,000,000 386,000,000
Long Term Debt 509,000,000 386,000,000
Tax Liabilities, Non-Current 1,505,000,000
Deferred Tax Liabilities, Non-Current 1,505,000,000
Total Equity 7,390,000,000 8,248,000,000 13,759,000,000
Equity Attributable to Parent Stockholders 7,390,000,000 8,248,000,000 13,759,000,000
Paid in Capital 13,100,000,000
Capital Stock 13,100,000,000
Common Stock 0
Preferred Stock
Additional Paid in Capital/Share Premium 13,100,000,000
Treasury Stock
Retained Earnings/Accumulated Deficit 668,000,000
Reserves/Accumulated Comprehensive Income/Losses -61,000,000 110,000,000 -9,000,000
Other Equity Interest 7,451,000,000 8,138,000,000 0
Non-Controlling/Minority Interests
Debt Maturity Schedule Total
Debt due in Year 1
Debt due in Year 2
Debt due in Year 3
Debt due in Year 4
Debt due in Year 5
Debt due Beyond
Debt – Interests Charges and Other Adjustments
Operating Lease Obligation Maturity Schedule Total
Operating Lease due in Year 1
Operating Lease due in Year 2
Operating Lease due in Year 3
Operating Lease due in Year 4
Operating Lease due in Year 5
Operating Lease due Beyond
Operating Lease – Interests Charges and Other Adjustments
Other Contractual Obligations Maturity Schedule Total
Other Contractual Obligations due in Year 1
Other Contractual Obligations due in Year 2
Other Contractual Obligations due in Year 3
Other Contractual Obligations due in Year 4
Other Contractual Obligations due in Year 5
Other Contractual Obligations due Beyond
Total Lease Liability
Total Lease Liability �C Due in year 1
Total Lease Liability �C Due in year 2
Total Lease Liability �C Due in year 3
Total Lease Liability �C Due in year 4
Total Lease Liability �C Due in year 5
Total Lease Liability �C Beyond
Total Lease Liability �C Interest Charges and Other Adjustments
Total Contractual Obligations
Total Contractual Obligations due in year 1
Total Contractual Obligations due in year 2
Total Contractual Obligations due in year 3
Total Contractual Obligations due in year 4
Total Contractual Obligations due in year 5
Total Contractual Obligations due Beyond
Total Contractual Obligations – Interests Charges and Other Adjustments
Fiscal year ends in Dec 31 | USD

Cash Flows

PYPL_cash-flow_Annual_As_Originally_Reported 2013 2014 2015
Cash Flow from Operating Activities, Indirect 1,993,000,000 2,220,000,000 2,546,000,000
Net Cash Flow from Continuing Operating Activities, Indirect 1,993,000,000 2,220,000,000 2,546,000,000
Cash Generated from Operating Activities 1,993,000,000 2,220,000,000 2,546,000,000
Income/Loss before Non-Cash Adjustment 955,000,000 419,000,000 1,228,000,000
Total Adjustments for Non-Cash Items 1,184,000,000 2,100,000,000 1,824,000,000
Depreciation, Amortization and Depletion, Non-Cash Adjustment 453,000,000 516,000,000 608,000,000
Depreciation and Amortization, Non-Cash Adjustment 453,000,000 516,000,000 608,000,000
Stock-Based Compensation, Non-Cash Adjustment 253,000,000 299,000,000 346,000,000
Taxes, Non-Cash Adjustment 52,000,000 680,000,000 127,000,000
Other Provisions, Non-Cash Adjustment 502,000,000 646,000,000 809,000,000
Net Investment Income/Loss, Non-Cash Adjustment
Gain/Loss on Financial Instruments, Non-Cash Adjustment
Unrealized Gain/Loss on Financial Instruments, Non-Cash Adjustment
Other Non-Cash Items
Excess Tax Benefit from Stock-Based Compensation, Non-Cash Adjustment -76,000,000 -41,000,000 -26,000,000
Irregular Income/Loss, Non-Cash Adjustment 0 -40,000,000
Gain/Loss on Disposals, Non-Cash Adjustment 0 -40,000,000
Gain/Loss on Disposal/Sale of Other Assets, Non-Cash Adjustment 0 -40,000,000
Changes in Operating Capital -146,000,000 -299,000,000 -506,000,000
Change in Trade and Other Receivables 80,000,000 -37,000,000 113,000,000
Change in Trade/Accounts Receivable 1,000,000 -13,000,000 -22,000,000
Change in Loans Receivable 0 14,000,000
Change in Other Receivables 79,000,000 121,000,000
Change in Notes Receivable -24,000,000
Change in Other Current Assets -62,000,000 -384,000,000
Change in Payables and Accrued Expenses 71,000,000 -223,000,000 -165,000,000
Change in Trade and Other Payables 71,000,000 77,000,000 -165,000,000
Change in Trade/Accounts Payable -13,000,000 42,000,000 12,000,000
Change in Taxes Payable 41,000,000 37,000,000 40,000,000
Change in Other Payables 43,000,000 -217,000,000
Change in Trade Notes Payable -2,000,000
Change in Accrued Expenses -300,000,000
Change in Other Current Liabilities 69,000,000 423,000,000
Change in Other Operating Capital -304,000,000 -39,000,000 -493,000,000
Cash Flow from Investing Activities -1,721,000,000 -1,546,000,000 -6,389,000,000
Cash Flow from Continuing Investing Activities -1,721,000,000 -1,546,000,000 -6,389,000,000
Payment for Loan Granted and Repayments Received, Net -793,000,000 -1,023,000,000 -819,000,000
Purchase/Sale and Disposal of Property, Plant and Equipment, Net -391,000,000 -492,000,000 -696,000,000
Purchase of Property, Plant and Equipment -391,000,000 -492,000,000 -722,000,000
Sale and Disposal of Property, Plant and Equipment 0 26,000,000
Purchase/Sale of Business, Net -731,000,000 -2,000,000 -1,225,000,000
Purchase/Acquisition of Business -731,000,000 -2,000,000 -1,225,000,000
Purchase/Sale of Investments, Net -290,000,000 333,000,000 -4,224,000,000
Purchase of Investments -610,000,000 -76,000,000 -7,542,000,000
Sale of Investments 320,000,000 409,000,000 3,318,000,000
Purchase/Sale of Other Non-Current Assets, Net
Other Investing Cash Flow 484,000,000 -362,000,000 575,000,000
Cash Flow from Financing Activities -85,000,000 -51,000,000 3,079,000,000
Cash Flow from Continuing Financing Activities -85,000,000 -51,000,000 3,079,000,000
Issuance of/Payments for Common Stock, Net 0 75,000,000
Proceeds from Issuance of Common Stock 0 75,000,000
Payments for Common Stock
Issuance of/Repayments for Debt, Net -133,000,000 -21,000,000 -862,000,000
Issuance of/Repayments for Long Term Debt, Net -21,000,000
Proceeds from Issuance of Long Term Debt
Repayments for Long Term Debt
Issuance of/Repayments for Short Term Debt, Net -133,000,000 -862,000,000
Repayments for Short Term Debt -133,000,000 -862,000,000
Other Financing Cash Flow 0 0 -18,000,000
Excess Tax Benefit from Share-Based Compensation, Financing Activities 76,000,000 41,000,000 26,000,000
Net Movement in Non-Controlling/Minority Interest -28,000,000 -71,000,000 3,858,000,000
Cash and Cash Equivalents, End of Period 1,604,000,000 2,201,000,000 1,393,000,000
Change in Cash 187,000,000 623,000,000 -764,000,000
Effect of Exchange Rate Changes 3,000,000 -26,000,000 -44,000,000
Cash and Cash Equivalents, Beginning of Period 1,414,000,000 1,604,000,000 2,201,000,000
Change in Cash as Reported, Supplemental 190,000,000 597,000,000 -808,000,000
Income Tax Paid, Supplemental -28,000,000 -47,000,000 -216,000,000
Interest Paid, Supplemental -14,000,000 -19,000,000 -16,000,000
Fiscal year ends in Dec 31 | USD

,

Ratios

2017 2018 2019 Formulas
PROFITABILITY RATIOS
MC GROSS MARGIN 78.50% 78.50% 79.05% Gross Profit / Sales
MC OPERATION MARGIN -24.54% -22.49% -21.62% Operating Earnings/Sales Revenue
MC NETPROFIT MARGIN -1.23% -1.24% -1.33% Net Profit / Total Revenue
LIQUIDITY RATIO
MC CURRENT RATIO 0.87 0.83 0.72 Current Assets / Current Liabilities
MC CASH RATIO 0.91 0.75 0.72 (Cash and cash equivalents + Marketable securities) ÷ Current liabilities
LEVERAGE RATIOS
MC DEBT TO EQUITY 2.88 3.59 3.94 Total Liabilities/Shareholder Equity
OPERATION RETURNS
MC ROE -2.80% -3.43% -3.79% Net Income / Shareholders’ Equity
MC ROA -0.72% -0.75% -0.77% Net Income / Total Assets

MA Income Statement

MA_IncomeStatement_Annual_As_Originally_Reported 2017 2018 2019
Gross Profit 9,810,000,000 11,736,000,000 13,346,000,000
Total Revenue 12,497,000,000 14,950,000,000 16,883,000,000
Business Revenue 15,492,000,000 18,483,000,000 20,856,000,000
Sales Return and Allowances/Discounts -5,848,000,000 -6,881,000,000 -8,097,000,000
Other Revenue 2,853,000,000 3,348,000,000 4,124,000,000
Cost of Revenue -2,687,000,000 -3,214,000,000 -3,537,000,000
Staff Cost, Cost of Revenue -2,687,000,000 -3,214,000,000 -3,537,000,000
Operating Income/Expenses -3,067,000,000 -3,362,000,000 -3,650,000,000
Selling, General and Administrative Expenses -2,631,000,000 -2,903,000,000 -3,128,000,000
General and Administrative Expenses -1,378,000,000 -1,619,000,000 -1,747,000,000
Legal, Accounting, Auditing and Consulting Fees -355,000,000 -377,000,000 -447,000,000
Selling and Marketing Expenses -898,000,000 -907,000,000 -934,000,000
Staff Costs 0 0 0
Depreciation, Amortization and Depletion -436,000,000 -459,000,000 -522,000,000
Depreciation and Amortization -436,000,000 -459,000,000 -522,000,000
Provision Expense/Write-Back
Provision for Doubtful Accounts
Total Operating Profit/Loss 6,743,000,000 8,374,000,000 9,696,000,000
Non-Operating Income/Expenses, Total -221,000,000 -1,170,000,000 35,000,000
Total Net Finance Income/Expense -154,000,000 -186,000,000 -224,000,000
Net Interest Income/Expense -154,000,000 -186,000,000 -224,000,000
Interest Expense Net of Capitalized Interest -154,000,000 -186,000,000 -224,000,000
Interest Income
Net Investment Income -50,000,000 158,000,000 232,000,000
Gain/Loss on Investments and Other Financial Instruments 167,000,000
Gain/Loss on Foreign Exchange -106,0

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