CONSOLIDATED BALANCE SHEETS (In millions, except for number of shares and par value) December 31, 2019 2018 $ $ 19,079 35,776 10,019 31,095 Assets Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net of allowances of $206 and $229 as of December 31, 2019 and December 31, 2018, respectively Prepaid expenses and other current assets Total current assets Property and equipment, net Operating lease right-of-use assets, net Intangible assets, net Goodwill Other assets Total assets 9.518 1,852 66,225 35,323 9.460 894 7,587 1,779 50,480 24,683 18,715 2,759 133,376 1.294 18,301 2,576 97,334 $ $ S 1.363 886 820 541 800 11.735 5,509 147 7,017 Liabilities and stockholders' equity Current liabilities: Accounts payable Partners payable Operating lease liabilities, current Accrued expenses and other current liabilities Deferred revenue and deposits Total current liabilities Operating lease liabilities, non-current Other liabilities Total liabilities Commitments and contingencies Stockholders' equity: Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,407 million and 2,385 million shares issued and outstanding, as of December 31, 2019 and December 31, 2018, respectively; 4,141 million Class B shares authorized, 445 million and 469 million shares issued and outstanding, as of December 31, 2019 and December 31, 2018, respectively. Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity 269 15,053 9.524 7,745 32.322 6,190 13,207 45,851 (489) 55,692 101,054 42,906 (760) 41,981 84,127 Table of Contents FACEBOOK, INC. CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Year Ended December 31, 2018 2017 2019 70,697 S S 55,838 $ 40,653 12,770 13,600 9,876 9,355 10,273 7,846 3,451 30,925 10,465 46,711 Revenue Costs and expenses: Cost of revenue Research and development Marketing and sales General and administrative Total costs and expenses Income from operations Interest and other income, net Income before provision for income taxes Provision for income taxes Net income Less: Net income attributable to participating securities Net income attributable to Class A and Class B common stockholders Earnings per share attributable to Class A and Class B common stockholders: Basic 23,986 826 5,454 7,754 4,725 2,517 20,450 20,203 391 20,594 4,660 15,934 (14) 15,920 24,913 448 25,361 3,249 22,112 (1) 22.111 24,812 6,327 18,485 S S $ 18,485 S $ 6.48 S 7.65 $ 5.49 $ 6.43 S 7.57 5.39 Diluted Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders: Basic 2,854 2,890 2,901 2,876 2.921 2.956 $ S $ Diluted Share-based compensation expense included in costs and expenses: Cost of revenue Research and development Marketing and sales General and administrative Total share-based compensation expense 178 2,820 377 3,488 569 402 284 3,022 511 335 436 289 4,836 S 4,152 $ 3,723 See Accompanying Notes to Consolidated Financial Statements. 74 Table of Contents FACEBOOK, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, 2019 18,485 2018 22,112 2017 15,934 S S $ Net income Other comprehensive income (loss): Change in foreign currency translation adjustment, net of tax Change in unrealized gain/loss on available-for-sale investments and other, net of tax Comprehensive income 566 (151) 422 18,756 (450) (52) 21,610 (90) 16,410 S S See Accompanying Notes to Consolidated Financial Statements. 75 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 28, 2019 September 29, 2018 September 30, 2017 $ $ Net sales: Products Services Total net sales 213,883 $ 46,291 260,174 225,847 39,748 265,595 196,534 32,700 229,234 Cost of sales: Products Services Total cost of sales Gross margin 144,996 16,786 161,782 98,392 148,164 15,592 163,756 101,839 126,337 14,711 141,048 88,186 Operating expenses: Research and development Selling, general and administrative Total operating expenses 16,217 18,245 34,462 14,236 16,705 30,941 11,581 15,261 26,842 Operating income Other income/(expense), net Income before provision for income taxes Provision for income taxes 63,930 1,807 65,737 10,481 55,256 $ 70,898 2,005 72,903 13,372 59,531 61,344 2,745 64,089 15,738 48,351 Net income $ $ Earnings per share: Basic Diluted $ $ 11.97 $ 11.89 $ 12.01 11.91 $ $ 9.27 9.21 Shares used in computing earnings per share: Basic 4,617,834 4,648,913 4,955,377 5,000, 109 5,217,242 5,251,692 Diluted ASSETS: $ Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets 48,844 $ 51,713 22,926 4,106 22,878 12,352 162,819 25,913 40,388 23,186 3,956 25,809 12,087 131,339 Non-current assets: Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets 105,341 37,378 32,978 175,697 338,516 $ 170,799 41,304 22,283 234,386 365,725 $ LIABILITIES AND SHAREHOLDERS' EQUITY: $ Current liabilities: Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities 46,236 $ 37,720 5,522 5,980 10,260_ 105,718 55,888 33,327 5,966 11,964 8,784 115,929 Non-current liabilities: Term debt Other non-current liabilities Total non-current liabilities Total liabilities 91,807 50,503 142,310 248,028 93,735 48,914 142,649 258,578 Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,986 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/loss) Total shareholders' equity Total liabilities and shareholders' equity 45, 174 45,898 (584) 90,488 338,516 $ 40,201 70,400 (3,454) 107,147 365,725 $ Access the 2019 financial statements of Facebook here and the 2019 financial statement of Apple here. For Facebook, scroll to Page 74 (Income Statement) and Page 73 (Balance Sheet) and use them to complete the table below. For Apple, scroll to Page 29 (Income Statement) and Page 31 (Balance Sheet) and use them to complete the table below. Note: You will NOT find 2017 numbers for current assets and liabilities, so don't bother about 2017 (see where it says NA on the tables below) In $ Millions FACEBOOK APPLE 2019 2018 2017 2019 2018 2017 Net Income Total Revenue Current Assets NA NA Current Liability NA NA Once you complete the table, compute the two ratios below FACEBOOK APPLE 2019 2018 2017 2019 2018 2017 Profit Margin Current Ratio NA NA Profit Margin - Net Income / Sales expressed as a percentage to two decimal places. For example 12.56% Current Ratio is current assets/ current liabilities expressed to two decimal places. For example, 1.98 Which company is more profitable per the profit margin ratio? Is the profit margin increasing or decreasing for this company? Which company has a better ability to pay off its short-term obligations as per the current ratio? Is the ratio steady, increasing, or decreasing for this company