Comprehensive Problem.

Attached are 2 financial statements from publicly traded companies (Balance Sheet and Income Statement). Review the balance sheet for each company (page number is given), and answer the following questions:

Facebook (FB)

1. What amount of current liabilities does the company report on its balance sheet at the end of the most recent year?

2. What types of current liabilities does the company report?

3. What is the Par value of FB stock? As of 12/31/2018, how many class A shares of Facebook are issued & Outstanding.

4. What is the companys current ratio? What does this say about the company?

5. Does the company have the ability to pay a dividend (look at the retained earnings & the cash balances)? Why or Why not?

Snapchat (SNAP)

6. What amount of current liabilities does the company report on its balance sheet at the end of the most recent year?

7. What types of current liabilities does the company report?

8. What is the Par value of the SNAP stock? As of 12/31/2018, how many class A shares of SNAP are issued & Outstanding?

9. What is the companys current ratio? What does this say about the company?

10. Does the company have the ability to pay a dividend (look at the retained earnings/Accumulated Deficit & the cash balances)? Why or Why not?

Conclusion:

Who would you prefer to invest in, Facebook or Snapchat? Why?

******Please answer all the questions.

FACEBOOK, INC. CONSOLIDATED BALANCE SHEETS (In millions except for her of shares and par value) December 31, 2018 2017 S S 8.079 13.632 Assets Current assets: Cash and cash equivulents Marketable securities Accounts receivable, iter of allowances of $229 and 5189 as of December 31, 2018 and 2017. respectively Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net Goodwill 10,019 31,095 7,587 1,779 5,832 1.V20 1.020 48,563 50,480 24,683 1,294 18.301 2,576 97,334 13,721 1.884 18.221 2.135 84,524 Other assets Total assets $ S 820 S $41 5.509 1 +7 17! 7,017 6,190 13.207 380 390 2.892 98 3,760 6,417 10.177 Liabilities and stockholders' equity Current liabilities: Accounts payable Partners payable Accrued expenses and other current liabilities Deferred revenue and deposits Total current lubilities Other liabilities Total liabilities Commitments and contingencies Stockholders' cquity: Common stock, S0.000006 par value: 5,000 million Class A shares authorized, 2,385 million and 2,397 million shares issued and outstanding, as of December 31, 2018 and December 31, 2017, respectively: 4.141 million Class B shares authorized, 469 million and 509 million shares issued and outstanding, as of December 31, 2018 and December 31, 2017, respectively. Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity See Accompanying Moses to Cowolidated Financial Statements. 42,906 (760) 41.981 84.127 97,334 40,584 (227) 33,990 74,347 $ 5 84,524 58 FACEBOOK, INC. CONSOLIDATED STATEMENTS OF INCOME in williams, except probarea 2016 27.638 3.789 5,919 3,772 1,731 15.211 12,427 91 12.518 2.301 10.217 Year Ended December 31. 2018 2017 Revenue S 55,838 $ 40,633 S Costs and expenses: Cost of revenue 9.355 5.454 Research and development 10.273 7,754 Marketing and sales 7.846 4.725 General and administrative 3,451 2.517 Total costs and expenses 30.925 20.450 Income from operations 24.913 20.203 Interest and other income (expense), net 448 391 Income before provision for income taxes 23.361 20.594 Provision for income taxes 3.249 4,660 Net income S 22.112 $ 15934 S Less: Net income attributable to participating securities 14 Net income attributable to Class A and Class B common stockholders S. 22.111 $ 15,920 S Earnings per share attributable to Class A and Class B common stockholders: Basic S 7.65 S 5.49 Diluted S 7.57 S 5.39 5 Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders; Basic 2.890 2.901 Diluted 2.921 2,956 Share-based compensation expense included in costs and expenses: Cost of revenue S 284 $ 178 S Research and developmenti 3,022 2.820 Marketing and sales 511 General and administrative 335 289 Total share based compensation expense S 4,152 S 3.723 See Accompanying Notes to Consolidoved Financial Statements 29 10.188 3.56 3.49 2.863 2.925 2.494 361 243 3.218 59 Snapchat Consolidated Balance Sheets in thousands, except pour value) December 31. 2017 2018 S 334,063 1,708,976 279.473 44,282 2.366,794 166,762 166,473 639,882 81,655 3,421,566 387.149 891.914 354.965 41.900 1,675.928 212,560 126,054 632.370 67,194 2,714,106 $ S Assets Current assets Cash and cash equivalents Marketable securities Accounts receivable. net of allowance Prepaid cxpenses and other current assets Total current assets Property and equipment, net Intangible assets.net Goodwill Other assets Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued expenses and other current liabilities Total current liabilities Other liabilities Total liabilities Commitments and contingencies (Note 7) Stockholders' equity Class A non-voting common stock, $0.00001 par value 3,000,000 shares authorized, 883.022 shares issued and outstanding at December 31, 2017. and 3,000,000 shares authorized, 999,304 shares issued and outstanding at December 31, 2018 Class B voting common stock, $0.00001 par value 700,000 shares authorized, 122.564 shares issued and outstanding at December 31, 2017, and 700.000 shares alithorized, 93,845 shares issued and outstanding at December 31, 2018, Class C voting common stock, S0.00001 par valuc 260,888 shares authorized, 216.616 shares issued and outstanding at December 31, 2017 and 260,888 shares authorized, 224,611 shares issued and outstanding at December 31, 2018 Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity 71.194 275.062 346,256 82.983 429,239 30,876 261.815 292,691 110,416 403.107 0 10 1 2 7.634.825 14.157 (4.656,667) 2.992,327 3.421.566 2 8.220.417 3,147 (5.912,378) 2.310.999 2.714,106 $ See Notes to Consolidated Financial Statements. 68 Snap Inc. Consolidated Statements of Operations (in thousands, except per share amounts) 2016 Year Ended December 31, 2017 824,949 S 404,482 2018 1,180,446 S Revenue Costs and expenses: Cost of revenue Research and development Sales and marketing General and administrative Total costs and expenses Operating loss Interest income Interest expense Other income (expense), net Loss before income taxes Income tax benefit (expense) Net loss Net Inss per share attributable to Class A. Class B, and Class common stockholders (Note 3): Basic Diluted Weighted average shares used in computation of net loss per share: Basic Diluted 451,660 183.676 124,371 165.160 924,867 (520,385) 4,654 (1,424) (4,568) (521,723 7.080 ( (514,643) $ 717,462 1.534,863 522,605 1.535.595 4.310.525 13,485,576) 21,096 (3,456) 4,528 (3,463,408 18,342 (3,445,066) $ 798.865 772.185 400.824 477,022 2.448,896 11.268,450) 27.228 (3.894) (8,248) 11,253,364) (2.5471 (1,255.911) S S (0.64) (0.64) (2.95) $ (2.95) $ (0.97 (0.97) S 1.166,085 807,871 807,871 1.300.368 1.300.368 1.166,085 See Notes to Consolidated Financial Statements. 66