EXHIBIT 5 Fitbit, Inc., Consolidated Statements of Operations, 2014-First Quarter 2017 (in thousands) First Quarter 2017 2016 2015 2014 Revenue $298,942 Cost of revenue 180,643 $2,169,461 1.323,557 845,884 $1,857,998 956,935 901,063 $745,433 387.776 357,657 118,299 Gross profit Operating expenses: Research and development 87,785 320,191 150,035 54,167 Sales and marketing 91,174 332,741 112,005 491,255 146,903 General and administrative 30,746 77,793 33,556 Change in contingent consideration Total operating expenses 209,678 199,728 Operating income 958,349 (112,465) 3,156 (91,379) 1,096 157,929 Interest income (expense), net (2,222) (2704) 552,865 348,198 (1.019) _(59,230) 287,949 112.272 $ 175,677 Other expense, net 533 _(15,934 Income before income taxes (109,295) 139,773 Income tax expense (89,750) _(29.671) $ (60,079) _(6,518) $ (102,777) 7.996 $ 131,777 Net income EXHIBIT 6 Fitbit, Inc., Condensed Consolidated Balance Sheets, 2015-2016 December 31, 2016 December 31, 2015 Assets Current assets Cash and cash equivalents $ 301,320 $ 535,846 Marketable securities 404,693 128,632 Accounts receivable, net 477,825 469,200 Inventories 178,146 Prepaid expenses & other current assets 43.530 Total current assets 230,387 66,346 1,480,571 76,553 51,036 1,355,414 Property and equipment, net 44,501 22,157 Goodwill Intangible assets, net 12,216 Deferred tax assets 83,020 27.521 174,097 10,448 $1,820,226 Other assets 1.758 Total assets $1,519,066 Liabilities, Redoomable Convertible Proforred Stock and Stockholders' Equity Current liabilities Accounts payable $ 313,773 $ 260,842 200.099 Accrued liabilities 390,561 Deferred revenue 49,904 44,448 Income taxes payable 7,694 Total current liabilities 761,932 2,868 508,257 29,358 537.615 Other liabilities 59,762 821,694 Total liabilities Stockholders' equity Common stock & paid-in capital 859,368 737,841 691 Accumulated other comprehensive income (978) Retained earnings 140.142 242.919 Total stockholders' equity 981,451 998,532 $1,820,226 Total liabilities and stockholders' .quity $1,519,066 5. What are the key success factors for... Use the key financial ratios presented in the Appendix of the book to help you diagnose Fitbit's financial performance. In addition to the financial ratios, you may also need to calculate compound average growth rates (CAGR) for certain financial measures. The formula for calculating CAGR (in percentage terms) is as follows: CAGR % = [ending value = beginning value] - 1 x 100 where n = the number of year-to-year or period-to-period changes Analyze the company's financial performance. Do trends suggest that Fitbit's strategy is working? Select "yes" for those statements that are accurate and choose "no" for those that are not a. Fitbit's profitability declined between 2015 and 2016 and early indications from Q1 2017 indicate little progress. (Click to select) b. Gross margins for Fitbit dropped 48 percent in 2015 to 39 percent in 2016. (Click to select) c. Operating return in assets increased from 12 percent in 2015 to 20 percent in 2016. (Click to select) d. Fitbit's increasing leverage from 2015 to 2016, as expressed by the debt-to-asset and debt-to-equity ratios, appears to be a result of the combined effects of decreasing profitability. (Click to select) e. The company has a good deal of ground to cover to overcome their lackluster financial performance (Click to select) f. Fitbit's present working capital will allow the company to invest in future strategic endeavors. (Click to select) EXHIBIT 5 Fitbit, Inc., Consolidated Statements of Operations, 2014-First Quarter 2017 (in thousands) First Quarter 2017 2016 2015 2014 Revenue $298,942 Cost of revenue 180,643 $2,169,461 1.323,557 845,884 $1,857,998 956,935 901,063 $745,433 387.776 357,657 118,299 Gross profit Operating expenses: Research and development 87,785 320,191 150,035 54,167 Sales and marketing 91,174 332,741 112,005 491,255 146,903 General and administrative 30,746 77,793 33,556 Change in contingent consideration Total operating expenses 209,678 199,728 Operating income 958,349 (112,465) 3,156 (91,379) 1,096 157,929 Interest income (expense), net (2,222) (2704) 552,865 348,198 (1.019) _(59,230) 287,949 112.272 $ 175,677 Other expense, net 533 _(15,934 Income before income taxes (109,295) 139,773 Income tax expense (89,750) _(29.671) $ (60,079) _(6,518) $ (102,777) 7.996 $ 131,777 Net income EXHIBIT 6 Fitbit, Inc., Condensed Consolidated Balance Sheets, 2015-2016 December 31, 2016 December 31, 2015 Assets Current assets Cash and cash equivalents $ 301,320 $ 535,846 Marketable securities 404,693 128,632 Accounts receivable, net 477,825 469,200 Inventories 178,146 Prepaid expenses & other current assets 43.530 Total current assets 230,387 66,346 1,480,571 76,553 51,036 1,355,414 Property and equipment, net 44,501 22,157 Goodwill Intangible assets, net 12,216 Deferred tax assets 83,020 27.521 174,097 10,448 $1,820,226 Other assets 1.758 Total assets $1,519,066 Liabilities, Redoomable Convertible Proforred Stock and Stockholders' Equity Current liabilities Accounts payable $ 313,773 $ 260,842 200.099 Accrued liabilities 390,561 Deferred revenue 49,904 44,448 Income taxes payable 7,694 Total current liabilities 761,932 2,868 508,257 29,358 537.615 Other liabilities 59,762 821,694 Total liabilities Stockholders' equity Common stock & paid-in capital 859,368 737,841 691 Accumulated other comprehensive income (978) Retained earnings 140.142 242.919 Total stockholders' equity 981,451 998,532 $1,820,226 Total liabilities and stockholders' .quity $1,519,066 5. What are the key success factors for... Use the key financial ratios presented in the Appendix of the book to help you diagnose Fitbit's financial performance. In addition to the financial ratios, you may also need to calculate compound average growth rates (CAGR) for certain financial measures. The formula for calculating CAGR (in percentage terms) is as follows: CAGR % = [ending value = beginning value] - 1 x 100 where n = the number of year-to-year or period-to-period changes Analyze the company's financial performance. Do trends suggest that Fitbit's strategy is working? Select "yes" for those statements that are accurate and choose "no" for those that are not a. Fitbit's profitability declined between 2015 and 2016 and early indications from Q1 2017 indicate little progress. (Click to select) b. Gross margins for Fitbit dropped 48 percent in 2015 to 39 percent in 2016. (Click to select) c. Operating return in assets increased from 12 percent in 2015 to 20 percent in 2016. (Click to select) d. Fitbit's increasing leverage from 2015 to 2016, as expressed by the debt-to-asset and debt-to-equity ratios, appears to be a result of the combined effects of decreasing profitability. (Click to select) e. The company has a good deal of ground to cover to overcome their lackluster financial performance (Click to select) f. Fitbit's present working capital will allow the company to invest in future strategic endeavors. (Click to select)