Page 39 (Income Statement) and Page 41 (Balance Sheet) and use them to complete the table below. Note: You will NOT find 2018 numbers for current assets and liabilities, so don't bother about 2018 (see where it says NA on the tables below) In $ Millions FACEBOOK AMAZON 2020 2019 2018 2020 2019 2018 Net Income Total Revenue Current Assets NA NA Current Liability NA NA Once you complete the table, compute the two ratios below (formulas are given below) FACEBOOK AMAZON 2020 2019 2018 2020 2019 2018 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? FACEBOOK, INC. CONSOLIDATED BALANCE SHEETS (In millions, except for number of shares and par value) December 31, 2020 2019 17,576 $ 44,378 19,079 35,776 Assets Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net of allowances of $114 million and $92 million as of December 31, 2020 and 2019, respectively Prepaid expenses and other current assets Total current assets Equity investments Property and equipment, net Operating lease right-of-use assets, net Intangible assets, net Goodwill Other assets Total assets 11,335 2,381 75,670 6,234 45,633 9,348 623 19,050 2,758 159,316 $ 9,518 1,852 66,225 86 35,323 9,460 894 18,715 2.673 133,376 $ $ 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, 2,406 million and 2,407 million shares issued and outstanding, as of December 31, 2020 and 2019, respectively; 4,141 million Class B shares authorized, 443 million and 445 million shares issued and outstanding, as of December 31, 2020 and 2019, respectively Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 1,331 1,093 1,023 11,152 382 14,981 9,631 6,414 31,026 1,363 886 800 11.735 269 15,053 9.524 7,745 32,322 50,018 927 77,345 128,290 159,316 $ 45,851 (489) 55,692 101,054 133,376 $ See Accompanying Notes to Consolidated Financial Statements. 2018 55,838 FACEBOOK, INC. CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Year Ended December 31, 2020 2019 Revenue 85,965 S 70,697 S Costs and expenses: Cost of revenue 16,692 12,770 Research and development 18,447 13,600 Marketing and sales 11,591 9,876 General and administrative 6,564 10,465 Total costs and expenses 53,294 46,711 Income from operations 32,671 23,986 Interest and other income, net 509 826 Income before provision for income taxes 33,180 24,812 Provision for income taxes 4,034 6,327 Net income 29,146 18,485 Less: Net income attributable to participating securities Net income attributable to Class A and Class B common stockholders S 29,146 18,485 $ Earnings per share attributable to Class A and Class B common stockholders: Basic S 10.22 6.48 S Diluted S 10.09 6.43 S Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: Basic 2,851 2,854 Diluted 2,888 2,876 Share-based compensation expense included in costs and expenses: Cost of revenue S 447 $ 377 S Research and development 4,918 3,488 Marketing and sales 691 569 General and administrative 480 402 Total share-based compensation expense 6,536 4,836 S 9,355 10,273 7,846 3,451 30,925 24,913 448 25,361 3,249 22,112 (1) 22.111 7.65 S. 7.57 2,890 2,921 284 3,022 511 335 4,152 See Accompanying Notes to Consolidated Financial Statements. Table of Contents FACEBOOK, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, 2020 2019 29,146 $ 18,485 $ 2018 22,112 $ 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 1,056 360 30,562 (151) 422 18,756 (450) (52) 21,610 $ $ $ See Accompanying Notes to Consolidated Financial Statements. 2020 36,410 21,331 25,251 9.208 (71) (2,582) (554) AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2018 2019 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 21,856 S 32.173 $ OPERATING ACTIVITIES: Net income 10,073 11,588 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other 15,341 21,789 Stock-based compensation 5,418 6,864 Other operating expense (income), net 274 164 Other expense (income), net 219 (249) Deferred income taxes 441 796 Changes in operating assets and liabilities: Inventories (1,314) (3,278) Accounts receivable, net and other (4,615) (7,681) Accounts payable 3,263 8,193 Accrued expenses and other 472 (1,383) Unearned revenue 1,151 1,711 Net cash provided by (used in) operating activities 30,723 38,514 INVESTING ACTIVITIES: Purchases of property and equipment (13,427) (16,861) Proceeds from property and equipment sales and incentives 2,104 4.172 Acquisitions, net of cash acquired, and other (2,186) (2,461) Sales and maturities of marketable securities 8,240 22,681 Purchases of marketable securities (7,100) (31,812) Net cash provided by (used in) investing activities (12,369) (24,281) FINANCING ACTIVITIES: Proceeds from short-term debt, and other 886 1,402 Repayments of short-term debt, and other (813) (1,518) Proceeds from long-term debt 182 871 Repayments of long-term debt (155) (1,166) Principal repayments of finance leases (7,449) (9,628) Principal repayments of financing obligations (337) (27) Net cash provided by (used in) financing activities (7,686) (10,066) Foreign currency effect on cash, cash equivalents, and restricted cash (351) 70 Net increase (decrease) in cash, cash equivalents, and restricted cash 10.317 4,237 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD 32,173 36,410 $ (2.849) (8,169) 17,480 5,754 1,265 66,064 (40,140) 5,096 (2,325) 50,237 (72,479) (59,611) 6,796 (6,177) 10.525 (1,553) (10,642) (53) (1,104) 618 5,967 42,377 See accompanying notes to consolidated financial statements. 38 AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) S Year Ended December 31, 2018 2019 141,915 $ 160,408 $ 90,972 120,114 232,887 280,522 2020 215,915 170,149 386,064 Net product sales Net service sales Total net sales Operating expenses: Cost of sales Fulfillment Technology and content Marketing General and administrative Other operating expense (income), net Total operating expenses Operating income Interest income Interest expense Other income (expense), net Total non-operating income (expense) Income before income taxes Provision for income taxes Equity-method investment activity, net of tax Net income Basic earnings per share Diluted earnings per share Weighted average shares used in computation of earnings per share: Basic Diluted 139,156 34,027 28,837 13,814 4,336 296 220,466 12,421 440 (1,417) (183) (1,160) 11.261 (1,197) 9 165,536 40,232 35,931 18,878 5.203 201 265,981 14,541 832 (1,600) 203 (565) 13,976 (2,374) (14) 11,588 $ 23.46 $ 23.01 $ 233,307 58,517 42,740 22.008 6,668 (75) 363,165 22,899 555 (1,647) 2,371 1,279 24,178 (2,863) 16 21,331 S 10,073 $ 20,68 S S 42.64 S 20.14 $ 41.83 487 500 494 504 500 510 See accompanying notes to consolidated financial statements. 39 Table of Contents 2020 21,331 561 AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2018 2019 Net income S 10,073 $ 11,588 $ Other comprehensive income (loss): Net change in foreign currency translation adjustments: Foreign currency translation adjustments, net of tax of $6, $(5), and $(36) (538) 78 Reclassification adjustment for foreign currency translation included in Other operating expense (income), net, net of tax of $0, $29, and $0 (108) Net foreign currency translation adjustments (538) (30) Net change in unrealized gains (losses) on available-for-sale debt securities: Unrealized gains (losses), net of tax of $0, $(12), and $(83) (17) 83 Reclassification adjustment for losses (gains) included in Other income (expense), net, net of tax of $0, $0, and $8 (4) Net unrealized gains (losses) on available-for-sale debt securities (9) 79 Total other comprehensive income (loss) (547) 49 Comprehensive income $ 9,526 $ 11,637 $ 561 273 8 (28) 245 806 22,137 See accompanying notes to consolidated financial statements. 40 AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31, 2019 2020 36,092 18,929 20,497 20,816 96,334 72,705 25.141 14,754 16,314 225,248 $ 42,122 42,274 23,795 24,542 132,733 113,114 37,553 15,017 22,778 321,195 S ASSETS Current assets: Cash and cash equivalents Marketable securities Inventories Accounts receivable, net and other Total current assets Property and equipment, net Operating leases Goodwill Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued expenses and other Unearned revenue Total current liabilities Long-term lease liabilities Long-term debt Other long-term liabilities Commitments and contingencies (Note 7) Stockholders' equity: Preferred stock, $0.01 par value: Authorized shares 500 Issued and outstanding shares - none Common stock, $0.01 par value: Authorized shares 5,000 Issued shares 521 and 527 Outstanding shares 498 and 503 Treasury stock, at cost Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 47,183 $ 32,439 ,190 87,812 39,791 23.414 12,171 72,539 44,138 9,70 126,385 52,573 31.816 17,017 5 (1,837) 33,658 (986) 31,220 62.060 225,248 5 (1,837) 42,865 (180) 52,551 93,404 321,195 See accompanying notes to consolidated financial statements