Find the ratios for exhibit 3, using each of the formulas from table 4-4.

106 PART 2 STRATEGY FORMULATION TABLE 4-4 A Summary of Key Financial Ratios What It Mue res Ratio I. Liquidity Ratios Current Ratio How Calculated The extent to which a firm can Current assets Current liabilities The extent to whch a firm can term obligations without relyn of its inventories Quick Ratio Current assets minus Current liabilities II. Leverage Ratios Debt-to- Total-Assets Ratio Debt-to-Equity Ratio Long- Term Debt-to-Equity Ratio Times-Interest-Earned Ratio Toeal debe Total assets Total debt Total stockholders equity Long-term debt Total stockholders' equity Profits before inserest and taxes Total interest charges The percentage of total funds po creditors The percentage of total funds creditors versus by owners The balance between debt and firm's long-term capital structune - The extent to which camings can de without the firm becoming unable annual interest costs IlI. Activity Ratios Inventory Turnover Whether a firm holds excessive sou Sales Inventory of finished goods inventories and whether a firms is ate ing its inventories comparod to the inde average Sales productivity and plant and pip utilization Whether a firm is generating a s volume of business for the sire of i investment Fixed Assets Turnover Fixed assets Sales Total assets Total Assets Turnover Annual credit sales Accounts receivable The average length of time i k collect credit sales (in percestage Accounts Receivable Turnover Average Collection Period IV. Profitability Ratios Gross Profit Margi Operating Profit Margin Net Profit Margin Return on Total Assets (ROA) Return on Stockholders' Equity (ROE) The average length of time t k collect on credit sales (in days) Total credit sales/365 days The total margin available to cover expenses and yield a profit Sales minus cost of goods sold Fle Earnings before interest and taxes EBIT Profitability without concen for o After-tax profits per dollar of sale interest Net income Sales Net income Total assets Net Income Total stockholders' equity Bef After-tax profits per dollar of ses is also called retan on invesmet After tax profits per dolle of investment in the firm Earnings Per Share (EPS) Net Earnings available to the ownen stock Number of shares of common stock outstanding Price-Earnings Ratio Market price per share Earnings per share Attractiveness of firm on eqaty V. Growth Ratios Sales Net Income Earnings Per Share Dividends Per Share Annual percentage growth in total sales Annual percentage growth in profits Annual percentage growth in EPS FIG Firm's growth rate in sales Firm's growth rale in pro is Aneual percentage growth in dividends por share Firm's growth rate in EPS Fim's growhae a ASE 6FACEBOOK, INC, 20 gdug EXHIBIT 3 Facebook's Income Statements (in millions of USD) Report Date Revenues Operating expenses EBIT December 31, 2014 $12.466 7472 4,994 December 31,2013 7.872 5,068 alf, 84 Other income (loss) EBT Income from continuing operations Other items Net income 4,910 1,970 2.940 (15) 2,925 2.754 1,254 1,500 of the 1.491 Source: Based on Facebook's 2014 Annual Repont Page 57 and Yahoo Finance ons, and by one half of EXHIBIT 4 Facebook's Balance Sheets (in millions of USD) December 31, 2014 December 31, 2013 Report Date Cash and equivalents Accounts receivable Other current assets Total current assets Property, plant & equipment Goodwill latangible assets Other assets Total assets $11,199 1,678 793 13,670 3,967 7,981 $11.449 1,109 512 13,070 2,882 839 come more ging service 638 40,184 221 17.895 Liabilities Short-term debt Accounts payable Other current liabilities Total current liabilities Long-term debt Other liabilities Total Habilities 180 378 866 1,100 119 2,545 1,088 2,425 Common stock Retained earnings Paid in capital and other Total equity 3,159 12.311 15,470 17,895 6,099 29,997 40,184 Total liabilities & equity Based on Facebook's 2014 Anaual Report Page $6 and Yahoo Finance 106 PART 2 STRATEGY FORMULATION TABLE 4-4 A Summary of Key Financial Ratios What It Mue res Ratio I. Liquidity Ratios Current Ratio How Calculated The extent to which a firm can Current assets Current liabilities The extent to whch a firm can term obligations without relyn of its inventories Quick Ratio Current assets minus Current liabilities II. Leverage Ratios Debt-to- Total-Assets Ratio Debt-to-Equity Ratio Long- Term Debt-to-Equity Ratio Times-Interest-Earned Ratio Toeal debe Total assets Total debt Total stockholders equity Long-term debt Total stockholders' equity Profits before inserest and taxes Total interest charges The percentage of total funds po creditors The percentage of total funds creditors versus by owners The balance between debt and firm's long-term capital structune - The extent to which camings can de without the firm becoming unable annual interest costs IlI. Activity Ratios Inventory Turnover Whether a firm holds excessive sou Sales Inventory of finished goods inventories and whether a firms is ate ing its inventories comparod to the inde average Sales productivity and plant and pip utilization Whether a firm is generating a s volume of business for the sire of i investment Fixed Assets Turnover Fixed assets Sales Total assets Total Assets Turnover Annual credit sales Accounts receivable The average length of time i k collect credit sales (in percestage Accounts Receivable Turnover Average Collection Period IV. Profitability Ratios Gross Profit Margi Operating Profit Margin Net Profit Margin Return on Total Assets (ROA) Return on Stockholders' Equity (ROE) The average length of time t k collect on credit sales (in days) Total credit sales/365 days The total margin available to cover expenses and yield a profit Sales minus cost of goods sold Fle Earnings before interest and taxes EBIT Profitability without concen for o After-tax profits per dollar of sale interest Net income Sales Net income Total assets Net Income Total stockholders' equity Bef After-tax profits per dollar of ses is also called retan on invesmet After tax profits per dolle of investment in the firm Earnings Per Share (EPS) Net Earnings available to the ownen stock Number of shares of common stock outstanding Price-Earnings Ratio Market price per share Earnings per share Attractiveness of firm on eqaty V. Growth Ratios Sales Net Income Earnings Per Share Dividends Per Share Annual percentage growth in total sales Annual percentage growth in profits Annual percentage growth in EPS FIG Firm's growth rate in sales Firm's growth rale in pro is Aneual percentage growth in dividends por share Firm's growth rate in EPS Fim's growhae a ASE 6FACEBOOK, INC, 20 gdug EXHIBIT 3 Facebook's Income Statements (in millions of USD) Report Date Revenues Operating expenses EBIT December 31, 2014 $12.466 7472 4,994 December 31,2013 7.872 5,068 alf, 84 Other income (loss) EBT Income from continuing operations Other items Net income 4,910 1,970 2.940 (15) 2,925 2.754 1,254 1,500 of the 1.491 Source: Based on Facebook's 2014 Annual Repont Page 57 and Yahoo Finance ons, and by one half of EXHIBIT 4 Facebook's Balance Sheets (in millions of USD) December 31, 2014 December 31, 2013 Report Date Cash and equivalents Accounts receivable Other current assets Total current assets Property, plant & equipment Goodwill latangible assets Other assets Total assets $11,199 1,678 793 13,670 3,967 7,981 $11.449 1,109 512 13,070 2,882 839 come more ging service 638 40,184 221 17.895 Liabilities Short-term debt Accounts payable Other current liabilities Total current liabilities Long-term debt Other liabilities Total Habilities 180 378 866 1,100 119 2,545 1,088 2,425 Common stock Retained earnings Paid in capital and other Total equity 3,159 12.311 15,470 17,895 6,099 29,997 40,184 Total liabilities & equity Based on Facebook's 2014 Anaual Report Page $6 and Yahoo Finance