Question
How would you respond to this post? I find Facebook Inc. coinciding to my name. The company is a public limited company operating in the
How would you respond to this post?
I find Facebook Inc. coinciding to my name. The company is a public limited company operating in the software industry, whose operations spans to nearly in all the countries in the world. Market leaders in the IT and software industry include Microsoft, and Alphabet. Public limited companies are characterized by a separate ownership from the management of the firm. Therefore, equity shareholders are interested in determining the effectiveness of the management team hired (BP Learning Media, 2010). The performance of the company will be assessed alongside the industry average and that of an industry peer, Alphabet Inc. A five-year average of return to equity ratio is 21.98 percent against an industry average of 18.5%. During 2019 financial year the company return on equity is 19.96% against an industry average of 15.36% in the same period. A closer look at return on assets, in 2019 the company ratio was 16.02% versus an industry average of 8.36% (MSN, 2020). A five-year average ratio is 18.99% on the company against an industry average of 8.64%. An analysis of return on capital registers a ratio of 17.72% based on 2019 financial reports versus an industry average of 9.44%. Five-year average is 20.25% while that of the industry is 11.89%. Income attributable to each employee in 2019 financial year is $459,090 while the industry average is $44,360. The company has outperformed the industry average on all metrics. The performance of the company will be compared against an industry peer Alphabet Inc. In 2019 return on equity stands at 18.12, return on assets is 13.5% percent, while return on capital is 16.02 percent (MSN, 2020). Income attributable to each employee is $315,550. An evaluation of management efficiency has seen Facebook outperform Alphabet across all fronts.
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