Mastercard Incorporated (MA) has reported a 4.83 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $933 million, or $0.86 a share in the quarter, compared with $890 million, or $0.79 a share for the same period last year. On an adjusted basis, the company has earned $940 million, or $0.86 a share for the quarter.
Revenue during the quarter grew 9.50 percent to $2,756 million from $2,517 million in the previous year period. Total expenses were 50.54 percent of quarterly revenues, down from 56.02 percent for the same period last year. This has led to an improvement of 547 basis points in operating margin to 49.46 percent.
Operating income for the quarter was $1,363 million, compared with $1,107 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $1,373 million.
"We're pleased to have delivered strong results for the quarter and full year, driven by solid execution of our strategy and leveraging our differentiated service offerings," said Ajay Banga, Mastercard president and chief executive officer. "Our continued investments in digital, safety and security, data analytics, loyalty and processing position us well for future growth in our core business and new payment flows."
Operating cash flow improves
Mastercard Incorporated has generated cash of $4,484 million from operating activities during the year, up 10.91 percent or $441 million, when compared with the last year.
The company has spent $1,167 million cash to meet investing activities during the year as against cash outgo of $715 million in the last year.
The company has spent $2,293 million cash to carry out financing activities during the year as against cash outgo of $2,458 million in the last year period.
Cash and cash equivalents stood at $6,721 million as on Dec. 31, 2016, up 16.95 percent or $974 million from $5,747 million on Dec. 31, 2015.
Working capital increases sharply
Mastercard Incorporated has recorded an increase in the working capital over the last year. It stood at $6,022 million as at Dec. 31, 2016, up 27.69 percent or $1,306 million from $4,716 million on Dec. 31, 2015. Current ratio was at 1.84 as on Dec. 31, 2016, up from 1.75 on Dec. 31, 2015.
Debt increases substantially
Mastercard Incorporated has witnessed an increase in total debt over the last one year. It stood at $5,180 million as on Dec. 31, 2016, up 58.51 percent or $1,912 million from $3,268 million on Dec. 31, 2015. Total debt was 27.74 percent of total assets as on Dec. 31, 2016, compared with 20.09 percent on Dec. 31, 2015. Debt to equity ratio was at 0.91 as on Dec. 31, 2016, up from 0.54 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 45.43 for the quarter from 92.25 for the same period last year.
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