Survey of Accounting Class 27 Packet Calculate the following financial ratios for Facebook and Snap, Inc. You will need to access the financial statements on your own as they will not be provided in the Excel file. You can access these by using a finance website such as Yahoo Finance or going to the SEC website (SEC.gov > Company Filings > Search by name or ticker symbol > Find the most recent 10-K filing and then click on the "Interactive Data" blue button). Input all dollar answers in thousands of dollars (e.g., input $1,000,000 as $1,000) Ratio Facebook (FB) Snap, Inc. (SNAP) Working Capital Current Ratio Quick Ratio Accounts Receivable Turnover Ratio Average Days to Collect Receivables Survey of Accounting Class 27 Packet Ratio Facebook (FB) Snap, Inc. (SNAP) Debt to Assets Ratio Debt to Equity Ratio Net Margin (Return on Sales) Asset Turnover Ratio Return on Assets (ROA) (Return on Investment (ROI]) Return on Equity (ROE) Earnings Per Share Price-Earnings (P/E) Ratio* The stock prices of their fiscal year end were the following! FB $131.09 SNAP $5.51 Survey of Accounting Class 27 Packet Perform vertical and horizontal analysis of each company's income statement and balance sheet to be able to answer the following questions. 1. Which company holds the most cash as a percentage of assets? 2. Which company has the highest operating income? 3. Which company experienced the greatest percentage growth in revenue? 4. Which company makes the most profit from $1 of sales? 5. Which company has the highest retained earnings as a proportion of total assets? Survey of Accounting Class 27 Packet 1. Which company is the most liquid? Which ratios support this conclusion? 2. Which company is most solvent? Which ratios support this conclusion? 3. Which company is most profitable? Which ratios support this conclusion? 4. Which of the three companies would you invest in? Why? Facebook Inc (Filer) CIK: 0001326801 Print Document View Excel Document 10-K Dec 31, 2019 Dec 31, 2018 Cover Cover page Financial Statements $ 19,079 35,776 $ 10,019 31,095 CONSOLIDATED BALANCE SHEETS 9,518 7,587 CONSOLIDATED BALANCE SHEETS (Parenthetical) 1,779 1,852 66,225 35,323 50.480 CONSOLIDATED STATEMENTS OF INCOME 24,683 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 9,460 894 18,715 2,759 133,376 1.294 18,301 2,576 97,334 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS 1,363 886 820 541 CONSOLIDATED BALANCE SHEETS- USD (S) $ in Millions Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net of allowances of $206 and $229 as of December 31, 2019 and December 31, 2018 respectively Prepaid expenses and other current assets Total current assets Property and equipment, net Property and equipment, net Operating lease right-of-use assets, net Intangible assets, net Goodwill Other assets Total assets 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 2.407 million and 2.385 million shares issued and outstanding, as of December 31, 2019 and December 31, 2018 respectively: 4,141 million Class B shares authorized, 445 million and 469 million shares issued and outstanding, as of December 31, 2019 and December 31, 2018, respectively Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 800 Notes to Financial Statements Accounting Policies 11,735 269 15,053 9,524 7,745 32,322 5,509 147 7,017 Notes Tables Notes Details 6,190 13,207 Uncategorized All Reports 45,851 (489) 55,692 101,054 $133,376 42,906 (760) 41.981 84,127 $ 97,334 Facebook Inc (Filer) CIK: 0001326801 (see all company filings) Snap Inc (Filer) CIK: 0001564408 Print Document view Excel Document 12 Months Ended Consolidated Statements of Cash 10-K Flows - USD ($) Dec. 31, 2019 Dec 31, 2018 Dec. 31, 2017 Cover S in Thousands Cash flows from operating activities Document and Entity Net loss $ (1,033,680) $(1,255,911) $ (3,445,066) Information Adjustments to reconcile net loss to Financial Statements net cash used in operating activities: Depreciation and amortization 87.245 91,648 61,288 Consolidated Statements of Stock-based compensation 686,013 538,211 2,639,895 Cash Flows Deferred income taxes (491) (383) (17.490) Consolidated Statements of Gain on divestiture (39,883) Operations Amortization of debt discount and 17,797 Consolidated Statements of issuance costs Comprehensive Income Lease exit charges 33,033 (Loss) Excess Inventory reserve and related 21,997 asset impairment Consolidated Balance Other Sheets (28,575) (6,356 (903) Change in operating assets and Consolidated Balance liabilities, net of effect of acquisitions: Sheets (Parenthetical) Accounts receivable, not of allowance (147,862) (77,506) (104,357 Consolidated Statements of Prepaid expenses and other current (9,849) 1,594 (39,783) Stockholders' Equity assets Operating lease right-of-use assets 58,199 Notes to Financial Statements Other assets 1,169 21,785 (4.771) Accounting Policies Accounts payable 20,674 (33,532) 49,696 Accrued expenses and other current 146,063 Notes Tables (14,325) 100,988 labilities (60,844) Operating lease liabilities Notes Details Other liabilities (954) 6.365 9.292 All Reports Net cash used in operating activities (304,958) (689,924) (734,667) Cash flows from investing activities Purchases of property and equipment (36,478) (120.242) (84,518) Sales of property and equipment 0 11,276 Proceeds from divestiture, net 73,796 Cash paid for acquisitions, not of cash acquired (77.119) (815) (385,011) Non-marketable investments (5.481) (22,495) (10,030) Purchases of marketable securities (2,477,388) (1,653,918) (3,862,637) Sales of marketable securities 184,179 45,007 511,068 Maturities of marketable securities 1,608,854 2,438,206 2,483,225 Other 1,029 (2,565) (8,107) Net cash provided by (used in) investing (728,608) 694,454 (1.357,010) activities Cash flows from financing activities Proceeds from issuance of convertible notes, net of issuance costs 1,251,411 0 Purchase of capped calls (102,086) Proceeds from the exercise of stock options 16,527 47,988 11,379 Stock repurchases from employees for 0 (551) (394,156) 0 bu (28,575) (903) (6.356) Sheets Consolidated Balance Sheets (Parenthetical) (77,506) 1,594 (104,357 (39,783) Consolidated Statements of Stockholders' Equity (147,862) (9,849) 58,199 1.169 20,674 Notes to Financial Statements 21,785 (33,532) (14,325) (4.771) 49,696 Accounting Policies 100,988 Notes Tables Notos Details 146,063 (60,844) (954) (304,958) 6,365 (689,924) 9,292 (734,667) All Reports (36,478) (84,518) (120.242) 11,276 0 73,796 Other Change in operating assets and liabilities, net of effect of acquisitions: Accounts receivable, net of allowance Prepaid expenses and other current assets Operating lease right-of-use assets Other assets Accounts payable Accrued expenses and other current Tabilities Operating lease liabilities Other liabilities Net cash used in operating activities Cash flows from investing activities Purchases of property and equipment Sales of property and equipment Proceeds from divestiture, net Cash paid for acquisitions, net of cash acquired Non-marketable investments Purchases of marketable securities Sales of marketable securities Maturities of marketable securities Other Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from issuance of convertible notes, net of issuance costs Purchase of capped calls Proceeds from the exercise of stock options Stock repurchases from employees for tax withholdings Proceeds from issuance of Class A common stock in initial public offering net of underwriting commissions Payments of deferred offering costs Net cash provided by financing activities Change in cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash, beginning of period Cash, cash equivalents, and restricted cash, end of period Supplemental disclosures Cash paid for income taxes, net Supplemental disclosures of non- cash activities Net change in accounts payable and accrued expenses and other current liablities related to property and equipment additions (77,119) (5.481) (2.477,388) 184,179 1,608,854 1,029 (728,608) (815) (22,495) (1,653,918) 45,007 2.438,206 (2,565) 694,454 (386,011) (10,030) (3,862,637) 511,068 2,483,225 (8.107) (1,357,010) 0 1,251 411 (102,086) 16,527 47,988 11,379 (551) (394,156) TE0 2,657,797 0 1,165,852 132 286 0 47,437 51,957 (9,672) 2,265,348 173,671 388,974 337,007 163,336 337,007 521,260 388,974 156 3,598 6,226 $ (6.027) $(7.784) $13,139 Survey of Accounting Class 27 Packet Calculate the following financial ratios for Facebook and Snap, Inc. You will need to access the financial statements on your own as they will not be provided in the Excel file. You can access these by using a finance website such as Yahoo Finance or going to the SEC website (SEC.gov > Company Filings > Search by name or ticker symbol > Find the most recent 10-K filing and then click on the "Interactive Data" blue button). Input all dollar answers in thousands of dollars (e.g., input $1,000,000 as $1,000) Ratio Facebook (FB) Snap, Inc. (SNAP) Working Capital Current Ratio Quick Ratio Accounts Receivable Turnover Ratio Average Days to Collect Receivables Survey of Accounting Class 27 Packet Ratio Facebook (FB) Snap, Inc. (SNAP) Debt to Assets Ratio Debt to Equity Ratio Net Margin (Return on Sales) Asset Turnover Ratio Return on Assets (ROA) (Return on Investment (ROI]) Return on Equity (ROE) Earnings Per Share Price-Earnings (P/E) Ratio* The stock prices of their fiscal year end were the following! FB $131.09 SNAP $5.51 Survey of Accounting Class 27 Packet Perform vertical and horizontal analysis of each company's income statement and balance sheet to be able to answer the following questions. 1. Which company holds the most cash as a percentage of assets? 2. Which company has the highest operating income? 3. Which company experienced the greatest percentage growth in revenue? 4. Which company makes the most profit from $1 of sales? 5. Which company has the highest retained earnings as a proportion of total assets? Survey of Accounting Class 27 Packet 1. Which company is the most liquid? Which ratios support this conclusion? 2. Which company is most solvent? Which ratios support this conclusion? 3. Which company is most profitable? Which ratios support this conclusion? 4. Which of the three companies would you invest in? Why? Facebook Inc (Filer) CIK: 0001326801 Print Document View Excel Document 10-K Dec 31, 2019 Dec 31, 2018 Cover Cover page Financial Statements $ 19,079 35,776 $ 10,019 31,095 CONSOLIDATED BALANCE SHEETS 9,518 7,587 CONSOLIDATED BALANCE SHEETS (Parenthetical) 1,779 1,852 66,225 35,323 50.480 CONSOLIDATED STATEMENTS OF INCOME 24,683 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 9,460 894 18,715 2,759 133,376 1.294 18,301 2,576 97,334 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS 1,363 886 820 541 CONSOLIDATED BALANCE SHEETS- USD (S) $ in Millions Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net of allowances of $206 and $229 as of December 31, 2019 and December 31, 2018 respectively Prepaid expenses and other current assets Total current assets Property and equipment, net Property and equipment, net Operating lease right-of-use assets, net Intangible assets, net Goodwill Other assets Total assets 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 2.407 million and 2.385 million shares issued and outstanding, as of December 31, 2019 and December 31, 2018 respectively: 4,141 million Class B shares authorized, 445 million and 469 million shares issued and outstanding, as of December 31, 2019 and December 31, 2018, respectively Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 800 Notes to Financial Statements Accounting Policies 11,735 269 15,053 9,524 7,745 32,322 5,509 147 7,017 Notes Tables Notes Details 6,190 13,207 Uncategorized All Reports 45,851 (489) 55,692 101,054 $133,376 42,906 (760) 41.981 84,127 $ 97,334 Facebook Inc (Filer) CIK: 0001326801 (see all company filings) Snap Inc (Filer) CIK: 0001564408 Print Document view Excel Document 12 Months Ended Consolidated Statements of Cash 10-K Flows - USD ($) Dec. 31, 2019 Dec 31, 2018 Dec. 31, 2017 Cover S in Thousands Cash flows from operating activities Document and Entity Net loss $ (1,033,680) $(1,255,911) $ (3,445,066) Information Adjustments to reconcile net loss to Financial Statements net cash used in operating activities: Depreciation and amortization 87.245 91,648 61,288 Consolidated Statements of Stock-based compensation 686,013 538,211 2,639,895 Cash Flows Deferred income taxes (491) (383) (17.490) Consolidated Statements of Gain on divestiture (39,883) Operations Amortization of debt discount and 17,797 Consolidated Statements of issuance costs Comprehensive Income Lease exit charges 33,033 (Loss) Excess Inventory reserve and related 21,997 asset impairment Consolidated Balance Other Sheets (28,575) (6,356 (903) Change in operating assets and Consolidated Balance liabilities, net of effect of acquisitions: Sheets (Parenthetical) Accounts receivable, not of allowance (147,862) (77,506) (104,357 Consolidated Statements of Prepaid expenses and other current (9,849) 1,594 (39,783) Stockholders' Equity assets Operating lease right-of-use assets 58,199 Notes to Financial Statements Other assets 1,169 21,785 (4.771) Accounting Policies Accounts payable 20,674 (33,532) 49,696 Accrued expenses and other current 146,063 Notes Tables (14,325) 100,988 labilities (60,844) Operating lease liabilities Notes Details Other liabilities (954) 6.365 9.292 All Reports Net cash used in operating activities (304,958) (689,924) (734,667) Cash flows from investing activities Purchases of property and equipment (36,478) (120.242) (84,518) Sales of property and equipment 0 11,276 Proceeds from divestiture, net 73,796 Cash paid for acquisitions, not of cash acquired (77.119) (815) (385,011) Non-marketable investments (5.481) (22,495) (10,030) Purchases of marketable securities (2,477,388) (1,653,918) (3,862,637) Sales of marketable securities 184,179 45,007 511,068 Maturities of marketable securities 1,608,854 2,438,206 2,483,225 Other 1,029 (2,565) (8,107) Net cash provided by (used in) investing (728,608) 694,454 (1.357,010) activities Cash flows from financing activities Proceeds from issuance of convertible notes, net of issuance costs 1,251,411 0 Purchase of capped calls (102,086) Proceeds from the exercise of stock options 16,527 47,988 11,379 Stock repurchases from employees for 0 (551) (394,156) 0 bu (28,575) (903) (6.356) Sheets Consolidated Balance Sheets (Parenthetical) (77,506) 1,594 (104,357 (39,783) Consolidated Statements of Stockholders' Equity (147,862) (9,849) 58,199 1.169 20,674 Notes to Financial Statements 21,785 (33,532) (14,325) (4.771) 49,696 Accounting Policies 100,988 Notes Tables Notos Details 146,063 (60,844) (954) (304,958) 6,365 (689,924) 9,292 (734,667) All Reports (36,478) (84,518) (120.242) 11,276 0 73,796 Other Change in operating assets and liabilities, net of effect of acquisitions: Accounts receivable, net of allowance Prepaid expenses and other current assets Operating lease right-of-use assets Other assets Accounts payable Accrued expenses and other current Tabilities Operating lease liabilities Other liabilities Net cash used in operating activities Cash flows from investing activities Purchases of property and equipment Sales of property and equipment Proceeds from divestiture, net Cash paid for acquisitions, net of cash acquired Non-marketable investments Purchases of marketable securities Sales of marketable securities Maturities of marketable securities Other Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from issuance of convertible notes, net of issuance costs Purchase of capped calls Proceeds from the exercise of stock options Stock repurchases from employees for tax withholdings Proceeds from issuance of Class A common stock in initial public offering net of underwriting commissions Payments of deferred offering costs Net cash provided by financing activities Change in cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash, beginning of period Cash, cash equivalents, and restricted cash, end of period Supplemental disclosures Cash paid for income taxes, net Supplemental disclosures of non- cash activities Net change in accounts payable and accrued expenses and other current liablities related to property and equipment additions (77,119) (5.481) (2.477,388) 184,179 1,608,854 1,029 (728,608) (815) (22,495) (1,653,918) 45,007 2.438,206 (2,565) 694,454 (386,011) (10,030) (3,862,637) 511,068 2,483,225 (8.107) (1,357,010) 0 1,251 411 (102,086) 16,527 47,988 11,379 (551) (394,156) TE0 2,657,797 0 1,165,852 132 286 0 47,437 51,957 (9,672) 2,265,348 173,671 388,974 337,007 163,336 337,007 521,260 388,974 156 3,598 6,226 $ (6.027) $(7.784) $13,139
