Due February 4th, 2020 by 6:40P Directions: To answer the following questions, please reference the Etsy 2018 Annual Report 1. Convert the Consolidated Statement of Operations (found in Item 8) into a common-size statement. (0.5 pts) 2. Looking at the Consolidated Statement of Operations, please answer the following: (1.5 pts) a. Has 2018 Gross Profit improved vs. 2017? If so, what could be some drivers that improved Gross Profit? b. In which year has Etsy improved its total operating expenses? In that year, which operating expense saw the largest improvement vs. the prior year? Hint: Look at total operating expense as a % of revenue as well as calculate the year over year change to determine if it's improving (e.g. getting smaller as a % of revenue or decreasing vs. the prior year) c. What is the 3-year Revenue CAGR? 3. Calculate Etsy's 2018 Net Working Capital. Based on the result, what can one infer about Etsy's liquidity? (1 pt.) Consolidated Statements of Operations (In thousands except share and per share amounts) Year Ended December 31, 2018 2017 603,693 $ 441,231 $ 190,762 150,986 412,931 290,245 2016 364,967 123,328 241,639 158,013 97,249 82,883 109,085 74,616 91,486 3,162 278,349 11,896 82,248 55,083 86,180 551 224,062 17,577 - 338,145 74,786 Revenue Cost of revenue Gross profit Operating expenses: Marketing Product development General and administrative Asset impairment charges Total operating expenses Income from operations Other (expense) income: Interest expense Interest and other income Foreign exchange (loss) gain Total other (expense) income Income (loss) before income taxes Benefit (provision) for income taxes Net income (loss) Net income (loss) per share attributable to common stockholders: Basic Diluted Weighted average common shares outstanding: Basic Diluted (22,178) 8,957 (6.487) (19,708) 55,078 22.413 77,491 (11,130) 2,394 29,105 20,369 32,265 49,535 81,800 (7.204) 1,702 (14,951) (20.453) (2,876) (27,025) (29,901) $ $ $ 0.64 0.61 5 0.69 .68 $ $ (0.26) (0.26) 0 120.146,076 127,084,785 118,538,687 122,267,673 113.562.738 113,562,738 MacBook Air
