Leading Edge Risk Management

FINANCE

VISA INC
Executive Summary
To ascertain the financial performance of the company, it is essential that a financial analysis
should be conducted that will help in knowing the true position of the company. Further, a
comparison with the peer in the same industry can provide the best result. In this report, the
financial performance of Visa Inc is compared with that of JPMorgan. The report initiates with
the introduction followed by the discussion of the financial performance of both these
companies. Further, the report sheds light on the historical trend in the accounting statement
entries. To analyze the same, various aspect of Visa Inc such as turnover, profit, dividend, etc is
analyzed to provide a better view of the company.
The second part deals with the historical trends and the computation of accounting ratios done
under the heads of profitability, liquidity, and solvency. As per the profitability ratios, the
position of Visa INC is placed in a better position. When it comes to liquidity, once again Visa is
placed in a superior position while in case of solvency both are having a high ratio indicating the
presence of debt. Therefore, the overall analysis projects that Visa has performed better as
compared to its peer.
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VISA INC
Contents
Introduction................................................................................................................ 4
Visa INC vs. JPMorgan................................................................................................. 4
 VISA INC............................................................................................................... 4
 JP Morgan............................................................................................................. 5
Comparison between the accounting statement items of JPMorgan Chase and Visa
INC.............................................................................................................................. 5
 Business............................................................................................................... 6
 Transactions in the accounting statements of the two companies in the next five
years.......................................................................................................................... 6
 Tax expense or benefits....................................................................................... 7
Area of accounting statement.................................................................................... 7
 The operating expenses....................................................................................... 7
Ratio computation.................................................................................................... 10
 Profitability ratios............................................................................................... 10
 Liquidity ratios................................................................................................... 11
 Solvency ratios................................................................................................... 11
Conclusion................................................................................................................ 13
References............................................................................................................... 14
Appendix.................................................................................................................. 16
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VISA INC
Introduction
Visa direct is considered to be the most significant methods for making payments electronically.
Earlier the payments made either by cash or via cheque. There has been a change in the typical
payment flow using visa direct in which the account holders use their visa credit or debit card for
making purchases. In case of visa direct, the funds are pushed to the account holder which opens
up the network to various new ways of payment such as business to consumer, peer-to-peer
disbursements and various other bill payments. A large group of people is benefited by these are
direct such as the right share drivers and delivery service providers are paid the security and on
time. It is observed that there is strong growth in this field. In the last quarter of the fiscal year
2018, the growth rate year over year of visa direct was greater than 100%. In 12 months it was
observed that the volume of business-to-business payments reached $950 billion which is more
than 11 % of the total payment volume (VISA INC, 2018). The comparison will be based upon
VISA INC and its peer JP Morgan in the light of various financial parameters and ratio
computation.
Visa INC vs. JPMorgan
 VISA INC
There are various visa payment credentials which comprise of traditional cards card numbers that
are stored in files as well as card numbers that are stored on mobile devices. In the year 2018,
these payment credentials were used about 182 billion times which is almost half-billion
transaction for each day last year (VISA INC, 2018). This record has let us know the double-
digit growth rate in three major drivers that are mentioned below.
As per GAAP, the earnings per share growth were 58% and adjusted earnings per share growth
were 32%. In the year 2018, the result included certain special items such as US tax reform,
donation of available for sale investment securities and litigation provision which was related to
the interchange multidistrict litigation case. In the previous years, the special items that were
included were associated with the legal entity reorganization of Visa Europe and various other
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