Dec 31, 2015 | Dec 31, 2014 | |
---|---|---|
Cash and cash equivalents | 4,907 | 4,315 |
Marketable securities | 13,527 | 6,884 |
Accounts receivable, net of allowances for doubtful accounts of $68 and $39 as of December 31, 2015 and December 31, 2014, respectively | 2,559 | 1,678 |
Prepaid expenses and other current assets | 659 | 513 |
Total current assets | 21,652 | 13,390 |
Property and equipment, net | 5,687 | 3,967 |
Intangible assets, net | 3,246 | 3,929 |
Goodwill | 18,026 | 17,981 |
Other assets | 796 | 699 |
Total assets | 49,407 | 39,966 |
Current liabilities: | ||
Accounts payable | 196 | 176 |
Partners payable | 217 | 202 |
Accrued expenses and other current liabilities | 1,449 | 866 |
Deferred revenue and deposits | 56 | 66 |
Current portion of capital lease obligations | 7 | 114 |
Total current liabilities | 1,925 | 1,424 |
Capital lease obligations, less current portion | 107 | 119 |
Other liabilities | 3,157 | 2,327 |
Total liabilities | 5,189 | 3,870 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,293 million and 2,234 million shares issued and outstanding, including 8 million and 13 million outstanding shares subject to repurchase, as of December 31, 2015 and December 31, 2014, respectively; 4,141 million Class B shares authorized, 552 million and 563 million shares issued and outstanding, including 3 million and 6 million outstanding shares subject to repurchase, as of December 31, 2015 and December 31, 2014, respective | 0 | 0 |
Additional paid-in capital | 34,886 | 30,225 |
Accumulated other comprehensive loss | -455 | -228 |
Retained earnings | 9,787 | 6,099 |
Total stockholders’ equity | 44,218 | 36,096 |
Total liabilities and stockholders’ equity | 49,407 | 39,966 |
Financial Accounting
Objective
- Communicate information about financial condition and performance
- potential lenders can evaluate whether they should lend to a company
- potential investors can evaluate whether they should invest in a company
- Financial information includes financial about the reporting company’s
- Economic resources, claims against a company (Balance sheet)
- Effects of transactions and other events and conditions that change those resources and claims (Income, Comprehensive income, Stockholders’ equity and Cash flow Statements)
Financial statements
Balance sheet (Statement of financial condition)
- Picture of financial condition
- Assets (A) = Liabilities (L) + Equity (E)
- Assets resources that have probable future benefits
- Liabilities claims on resources
- Equity residual interest in the assets of an company after deducting liabilities
- The balance sheet equation is:
- On Dec 31, 2015 these amounts are:
- On Dec 31, 2014 these amounts are:
Liquidity and solvency ratios
Current ratio = \frac{CurrentAssets}{CurrentLiabilities}
Calculate Facebook’s Current ratio on:
- Dec 31, 2015:
- Dec 31, 2014:
Based on the Current ratio Facebook has more current assets to satisfy current liabilities on Dec 31, 2015 compared to Dec 31, 2014?
- Debt to equity ratio = \frac{TotalLiabilities}{TotalEquity}
Calculate Facebook’s Debt to Equity Ratio on:
- Dec 31, 2015:
- Dec 31, 2014:
Based on the Debt to Equity Ratio Facebook is more risky on Dec 31, 2015 compared to Dec 31, 2014?
Amount that Facebook expects to collect from customers:
- On Dec 31, 2015 is:
- On Dec 31, 2014 is:
Collections
- Amount that Facebook does not expect to collect from customers
- On Dec 31, 2015 is:
- On Dec 31, 2014 is:
- Amount that customers owe Facebook:
- On Dec 31, 2015 is:
- On Dec 31, 2014 is:
- The percent of amounts owed that Facebook doesn’t expect to collect from customers:
- On Dec 31, 2015 is:
- On Dec 31, 2014 is:
Income statement
- Performance during period
- Revenue – Expenses = Net Income (Net Earnings)
Profitability ratios
Operating Margin = \frac{Operating Income}{Total Revenues}
Calcuate Facebook’s Operating Margin for the year ending:
- Dec 31, 2015:
- Dec 31, 2014:
- Dec 31, 2013:
Based on Facebook’s Operating Margin:
- More profitable in 2015 compared to 2014?
- More profitable in 2014 compared to 2013?
- Profit Margin = \frac{Net Income}{Total Revenues}
+ Calcuate Facebook’s Net Profit Margin for the year ending: + Dec 31, 2015: + Dec 31, 2014: + Dec 31, 2013:
- Based on Facebook’s Net Profit Margin:
- More profitable in 2015 compared to 2014?
- More profitable in 2014 compared to 2013?
Statement of Cash flows
- What activities generated cash and what activities used cash
- Cash inflows and outflows divided into 3 sections
- operating
- investing
- financing
- The change in Facebook’s cash and cash equivalents account for year ending:
- Dec 31, 2015 is:
- Dec 31, 2014 is:
- Dec 31, 2013 is:
- Does Facebook use the direct or the indirect method to present Net cash provided by operating activities?
- Amount of cash expenditures to purchase property and equipment during 2015 is:
- Use Facebook’s account titles to record the journal entry for these purchases.
- Proceeds from issuing common stock during 2013 is:
- Use Facebook’s account titles to record the journal entry for the stock issuance.
- Acquisitions during 2014 include:
- Financial statements that follow from the SEC’s website. Facebook’s ticker is FB
Balance statement
(amounts in millions)
Income statement
(amounts in millions, except as noted)
Year ending Dec 31, 2015 | Year ending Dec 31, 2014 | Year ending Dec 31, 2013 | |
---|---|---|---|
Revenue | 17,928.00 | 12,466.00 | 7,872.00 |
Costs and expenses: | |||
Cost of revenue | 2,867.00 | 2,153.00 | 1,875.00 |
Research and development | 4,816.00 | 2,666.00 | 1,415.00 |
Marketing and sales | 2,725.00 | 1,680.00 | 997.00 |
General and administrative | 1,295.00 | 973.00 | 781.00 |
Total costs and expenses | 11,703.00 | 7,472.00 | 5,068.00 |
Income from operations | 6,225.00 | 4,994.00 | 2,804.00 |
Interest and other income/(expense), net | -31.00 | -84.00 | -50.00 |
Income before provision for income taxes | 6,194.00 | 4,910.00 | 2,754.00 |
Provision for income taxes | 2,506.00 | 1,970.00 | 1,254.00 |
Net income | 3,688.00 | 2,940.00 | 1,500.00 |
Less: Net income attributable to participating securities | 19.00 | 15.00 | 9.00 |
Net income attributable to Class A and Class B common stockholders | 3,669.00 | 2,925.00 | 1,491.00 |
Earnings per share attributable to Class A and Class B common stockholders: | |||
Basic (in dollars per share) | 1.31 | 1.12 | 0.62 |
Diluted (in dollars per share) | 1.29 | 1.10 | 0.60 |
Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders: | |||
Basic (in shares) | 2,803.00 | 2,614.00 | 2,420.00 |
Diluted (in shares) | 2,853.00 | 2,664.00 | 2,517.00 |
Cash flow
(amounts in millions)
Year ending Dec 31, 2015 | Year ending Dec 31, 2014 | Year ending Dec 31, 2013 | |
---|---|---|---|
Cash flows from operating activities | |||
Net income | 3,688 | 2,940 | 1,500 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,945 | 1,243 | 1,011 |
Lease abandonment | 0 | -31 | 117 |
Share-based compensation | 2,960 | 1,786 | 906 |
Deferred income taxes | -795 | -210 | -37 |
Tax benefit from share-based award activity | 1,721 | 1,853 | 602 |
Excess tax benefit from share-based award activity | -1,721 | -1,869 | -609 |
Other | 17 | 7 | 56 |
Changes in assets and liabilities: | |||
Accounts receivable | -973 | -610 | -378 |
Prepaid expenses and other current assets | -144 | -123 | 355 |
Other assets | -3 | -216 | -142 |
Accounts payable | 18 | 31 | 26 |
Partners payable | 17 | -28 | 12 |
Accrued expenses and other current liabilities | 513 | 328 | -38 |
Deferred revenue and deposits | -9 | 10 | 8 |
Other liabilities | 1,365 | 346 | 833 |
Net cash provided by operating activities | 8,599 | 5,457 | 4,222 |
Cash flows from investing activities | |||
Purchases of property and equipment | -2,523 | -1,831 | -1,362 |
Purchases of marketable securities | -15,938 | -9,104 | -7,433 |
Sales of marketable securities | 6,928 | 8,438 | 2,988 |
Maturities of marketable securities | 2,310 | 1,909 | 3,563 |
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets | -313 | -4,975 | -368 |
Change in restricted cash and deposits | 102 | -348 | -11 |
Other investing activities, net | 0 | -2 | -1 |
Net cash used in investing activities | -9,434 | -5,913 | -2,624 |
Cash flows from financing activities | |||
Net proceeds from issuance of common stock | 0 | 0 | 1,478 |
Taxes paid related to net share settlement | -20 | -73 | -889 |
Proceeds from exercise of stock options | 0 | 18 | 26 |
Repayment of long-term debt | 0 | 0 | -1,500 |
Principal payments on capital lease obligations | -119 | -243 | -391 |
Excess tax benefit from share-based award activity | 1,721 | 1,869 | 609 |
Net cash provided by (used in) financing activities | 1,582 | 1,571 | -667 |
Effect of exchange rate changes on cash and cash equivalents | -155 | -123 | 8 |
Net increase in cash and cash equivalents | 592 | 992 | 939 |
Cash and cash equivalents at beginning of period | 4,315 | 3,323 | 2,384 |
Cash and cash equivalents at end of period | 4,907 | 4,315 | 3,323 |