Facebook Inc (FB) Extended Graph Analysis
April 17th, 2020 Posted by criseldar Extended Analysis No Comment yetCompany Profile
Facebook, Inc. is an online social media and social networking service available in 140 multilingual. Founded by Mark Zuckerberg and was launched on February 4, 2004. Headquartered in Menlo Park, California.
Facebook active users are more than 2 billion worldwide. And there are about 140 million businesses that use the apps to connect with customers, and more than 100 billion messages are shared daily.
Facebook Inc (FB) Extended Graph Analysis
1. FB CASH FLOW
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Net cash flow provided by operating activities | 8,599,000,000 | 16,108,000,000 | 24,216,000,000 | 29,274,000,000 | 36,314,000,000 | 36,314,000,000 |
Net cash used for investing activities | -9,434,000,000 | -11,739,000,000 | -20,038,000,000 | -11,603,000,000 | -19,864,000,000 | -19,864,000,000 |
Net cash provided by (used for) financing activities | 1,582,000,000 | -310,000,000 | -5,235,000,000 | -15,572,000,000 | -7,299,000,000 | -7,299,000,000 |
Capital expenditure | -2,523,000,000 | -4,491,000,000 | -6,733,000,000 | -13,915,000,000 | -15,102,000,000 | -15,102,000,000 |
Free cash flow | 6,076,000,000 | 11,617,000,000 | 17,483,000,000 | 15,359,000,000 | 21,212,000,000 | 21,212,000,000 |
Working Capital | 19,727,000,000 | 31,526,000,000 | 44,803,000,000 | 43,463,000,000 | 51,172,000,000 | 51,172,000,000 |
Facts:
- Cash provided by operating activities was $ 36 billion in 2020.
- Cash used for investing activities was $ -20 billion in 2020.
- Net cash provided by (used for) financing activities was $ -7 billion in 2020.
- Capital expenditure was $ -15 billion in 2020.
- Free cash flow was $21 billion in 2020.
- Working capital was $51 billion in 2020.
Explanation:
- Cash from operating activities increased year-over-year and grew 322 percent in five years.
- Net cash used from investing activities were investment in property, plant and equipment and purchases of investments and net acquisitions.
- Cash provided by financing activities were debt repayment, common stock repurchases and other financing activities.
- Capital expenditure was investment in property, plant and equipment.
- Free cash flow increases year-over-year and has a growth of 249 percent in five years.
- Working capital increased 149 percent in five years.
Interpretation
Facebook Inc. managed to generate cash from operations year-over-year in five years from regular business operations. The company’s cash was stable by managing a positive cash flow.
2. FB BALANCE SHEET
2015 | 2016 | 2017 | 2018 | 2019 | |
Total cash | 18,434,000,000 | 29,449,000,000 | 41,711,000,000 | 41,114,000,000 | 54,855,000,000 |
Current Assets | 21,652,000,000 | 34,401,000,000 | 48,563,000,000 | 50,480,000,000 | 66,225,000,000 |
Net property, plant and equipment | 5,687,000,000 | 8,591,000,000 | 13,721,000,000 | 24,683,000,000 | 44,783,000,000 |
Total non-current assets | 27,755,000,000 | 30,560,000,000 | 35,961,000,000 | 46,854,000,000 | 67,151,000,000 |
Total assets | 49,407,000,000 | 64,961,000,000 | 84,524,000,000 | 97,334,000,000 | 133,376,000,000 |
Current liabilities | 1,925,000,000 | 2,875,000,000 | 3,760,000,000 | 7,017,000,000 | 15,053,000,000 |
Non-current liabilities | 3,264,000,000 | 2,892,000,000 | 6,417,000,000 | 6,190,000,000 | 17,269,000,000 |
Total liabilities | 5,189,000,000 | 5,767,000,000 | 10,177,000,000 | 13,207,000,000 | 32,322,000,000 |
Retained earnings | 9,787,000,000 | 21,670,000,000 | 33,990,000,000 | 41,981,000,000 | 55,692,000,000 |
Stockholders equity | 44,218,000,000 | 59,194,000,000 | 74,347,000,000 | 84,127,000,000 | 101,054,000,000 |
Facts:
- Total cash was $55 billion in 2019.
- Current assets were $66 billion in 2019.
- Net property, plant and equipment was $45 billion in 2019.
- Non-current assets were $67 billion in 2019.
- Total assets were $133 billion in 2019.
- Current liabilities were $32 billion in 2019.
- Retained earnings were $56 billion in 2019.
- Stockholders equity were $101 billion in 2019.
Explanation:
- Total cash increased year-over-year and grew 198 percent in five years. Cash represents 41 percent of total assets.
- Current assets increased year-over-year and grew 206 percent in five years.
- Current assets represent 50 percent of total assets.
- Net property, plant and equipment grew 687 percent in five years and it represents 34 percent of total assets.
- Total non-current assets grew 142 percent in five years and it represents 50 percent of the total assets.
- Total assets grew 170 percent in five years.
- Current liabilities represent 47 percent of total liabilities.
- Non-current liabilities represent 53 percent of total liabilities.
- Total liabilities represents 24 percent of total liabilities and stockholders equity.
- Retained earnings represent 55 percent of total stockholders equity.
- Stockholders equity represents 76 percent of total liabilities and equity.
Interpretation
The balance sheet of the company is financially healthy and is liquid. The management is very efficient in maintaining a strong balance sheet, cash was capable to meet obligations in due period.
3. FB INCOME AND MARKET
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Revenue | 17,928,000,000 | 27,638,000,000 | 40,653,000,000 | 55,838,000,000 | 70,697,000,000 | 70,697,000,000 |
EBIT | 6,225,000,000 | 12,427,000,000 | 20,203,000,000 | 24,913,000,000 | 23,986,000,000 | 23,986,000,000 |
Net Income | 3,688,000,000 | 10,217,000,000 | 15,934,000,000 | 22,112,000,000 | 18,485,000,000 | 18,485,000,000 |
EBITDA | 8,162,000,000 | 14,870,000,000 | 23,625,000,000 | 29,685,000,000 | 30,573,000,000 | 30,573,000,000 |
Market Capitalization | 303,330,000,000 | 340,120,000,000 | 516,130,000,000 | 382,790,000,000 | 585,370,000,000 | 507,923,000,000 |
Intrinsic Value | 0 | 0 | 86,576,736,693 | 108,416,979,226 | 243,076,122,705 | 279,125,593,215 |
Facts:
- Revenue was $71 billion in 2020.
- EBIT was $24 billion in 2020.
- Net income was $18 billion in 2020.
- EBITDA was $31 billion in 2020.
- Market capitalization was $508 billion in 2020 trailing twelve months.
- Intrinsic value was $279 billion in 2020 trailing twelve months.
Explanation:
- Revenue increases year-over-year and has grown 294 percent in five years.
- EBIT grew 285 percent in five years and it represented 34 percent of revenue.
- Net income grew 401 percent in five years and represented 26 percent of the total revenue.
- EBITDA increases year-over-year and it grew 275 percent in five years.
- Market capitalization grew 67 percent in five years.
- Intrinsic value is lower by 45 percent of the market capitalization, in other terms the stock of Facebook is undervalued by 45 percent.
Interpretation
The company was profitable by maintaining a positive bottom line averaging 31 percent in the last five years.
4. FB FINANCIAL RATIOS
2015 | 2016 | 2017 | 2018 | 2019 | TTM | |
Asset turnover (average) | 0.40 | 0.46 | 0.54 | 0.61 | 0.61 | 0.51 |
Return on assets % | 8.19 | 17.82 | 21.30 | 24.32 | 16.02 | 16.02 |
Return on equity % | 9.14 | 19.70 | 23.84 | 27.90 | 19.96 | 19.96 |
Return on invested capital % | 9.03 | 19.42 | 23.39 | 27.02 | 17.32 | 17.32 |
Facts:
- Asset turnover was averaging 0.51 2020 trailing twelve months.
- Return on assets were 16.02 percent in 2020.
- Return on equity was 19.96 percent in 2020.
- Return on invested capital was 17.32 percent in 2020.
Explanation:
- Asset turnover indicates that for every $1 invested in assets Facebook generated 51 cents of sales.
- Return on assets indicates that for every dollar invested in assets it generated 16 cents of net income.
- Return on equity indicates that for every dollar invested in equity it generated a $0.20 return.
- Return on invested capital means that the return made by the company was 17% or .17.
Interpretation
Financial ratios indicate that the company has the ability to generate good returns on the investments made.
5. FB KEY EXECUTIVE COMPENSATION
2014 | 2015 | 2016 | 2017 | 2018 | |
Key Executive Compensation | |||||
Salary | 2,080,168 | 2,659,617 | 2,718,462 | 2,930,387 | 3,104,616 |
Bonus | 3,037,293 | 3,756,059 | 4,026,621 | 2,474,416 | 2,208,042 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 47,406,563 | 51,552,744 | 64,703,214 | 84,289,724 | 73,694,092 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 6,244,925 | 6,318,204 | 8,653,231 | 11,816,608 | 26,405,800 |
Total | 58,768,949 | 64,286,624 | 80,101,528 | 101,511,135 | 105,412,550 |
Mark Zuckerberg/CEO | |||||
Salary | 1 | 1 | 1 | 1 | 1 |
Bonus | 0 | 0 | 0 | 0 | 0 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 0 | 0 | 0 | 0 | 0 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 6,213,106 | 5,037,840 | 6,015,431 | 9,101,965 | 22,554,542 |
Total | 6,213,107 | 5,037,841 | 6,015,432 | 9,101,966 | 22,554,543 |
David M. Wehner/CFO | |||||
Salary | 418,051 | 665,385 | 662,692 | 711,539 | 753,846 |
Bonus | 535,077 | 653,365 | 940,421 | 633,317 | 499,494 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 11,024,750 | 15,465,667 | 14,931,596 | 21,072,431 | 18,423,523 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 9,905 | 9,000 | 9,566 | 9,000 | 9,250 |
Total | 11,987,783 | 16,793,417 | 16,544,275 | 22,426,287 | 19,689,113 |
Sheryl K Sandberg/COO | |||||
Salary | 592,885 | 715,385 | 738,077 | 795,769 | 843,077 |
Bonus | 624,204 | 1,265,193 | 1,293,635 | 640,378 | 638,310 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 14,332,313 | 15,465,667 | 19,908,426 | 21,072,431 | 18,423,523 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 0 | 1,252,724 | 2,609,318 | 2,687,643 | 3,823,508 |
Total | 15,549,402 | 18,698,969 | 24,549,457 | 25,196,221 | 23,728,418 |
Michael Schroepfer/ Chief Technology Officer
|
|||||
Salary | 535,577 | 639,423 | 658,846 | 711,539 | 753,846 |
Bonus | 979,021 | 943,360 | 859,356 | 633,317 | 570,744 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 11,024,750 | 10,310,705 | 14,931,596 | 21,072,431 | 18,423,523 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 9,164 | 9,140 | 9,377 | 9,000 | 9,250 |
Total | 12,548,512 | 11,902,628 | 16,459,175 | 22,426,287 | 19,757,363 |
Christopher K. Cox/Former Chief Product Officer
|
|||||
Salary | 533,654 | 639,423 | 658,846 | 711,539 | 753,846 |
Bonus | 898,991 | 894,141 | 933,209 | 567,204 | 499,494 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 11,024,750 | 10,310,705 | 14,931,596 | 21,072,431 | 18,423,523 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 12,750 | 9,500 | 9,538 | 9,000 | 9,250 |
Total | 12,470,145 | 11,853,769 | 16,533,189 | 22,360,374 | 19,686,113 |
Facts:
- Total key executive compensation in 2018 was $105,412,550.
- Total compensation of Mark Zuckerburg/CEO in 2018 was $22,554,542.
- Compensation of David M. Wehner/CFO in 2018 was $19,689,113.
- Compensation of Sheryl K Sandberg/COO in 2018 was $23,728,418.
- Total compensation of Michael Schroepfer/ Chief Technology Officer in 2018 was $19,757,363.
- Compensation of Christopher K. Cox/Former Chief Product Officer in 2018 was $19,686,113.
Explanation
- The total key executive compensation represents 0.57% of the total net income in 2018.
- Mark Zuckerberg, CEO total compensation in 2018 represents 21.40% of the total key executive compensation.
- David M. Webner, CFO total compensation in 2018 represents 18.68% of the total key executive compensation.
- Sheryl K. Sandberg, COO total compensation in 2018 represents 22.51% of the total key executive compensation.
- Michael Schroepfer, CTO total compensation in 2018 represents 18.74% of the total key executive compensation.
- Christopher K. Cox, Former Chief Product Officer total compensation in 2018 represents 18.68% of total key executive compensation.
Interpretation
The total key executive compensation in 2018 was less one percent of the total net income. The executive salary includes basic salary, bonuses, restricted stock award and other compensation.
6. FB LOBBYING AND CONTRIBUTIONS
PERIOD | USD |
2009 | 207,878 |
2010 | 351,390 |
2011 | 1,350,000 |
2012 | 3,850,000 |
2013 | 6,430,000 |
2014 | 9,340,000 |
2015 | 9,850,000 |
2016 | 8,692,000 |
2017 | 11,510,000 |
2018 | 12,620,000 |
2019 | 16,710,000 |
Facts:
- Facebook Inc was spending lobbying and contributions from 2009 to the current period.
Explanation:
A note from OpenSecret.org
“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on March 18, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.”
Source: OpenSecret.org Center for Responsive Politics
7. FB FINANCIAL STRENGTH
DATA:
USD | |
Working capital | 51,172,000,000 |
Total assets | 133,376,000,000 |
Sales | 70,697,000,000 |
EBIT | 23,986,000,000 |
Market value of equity | 507,923,000,000 |
Book value of total liabilities | 32,322,000,000 |
Retained earnings | 55,692,000,000 |
CALCULATION
Ratio | Score | Result | |
A – Working Capital / Total Assets | 0.38 | 1.2 | 0.46 |
B – Retained Earnings / Total Assets | 0.42 | 1.4 | 0.58 |
C – EBIT / Total Assets | 0.18 | 3.3 | 0.59 |
D – Market Value of Equity / Book Value of Total Liabilities | 15.71 | 0.6 | 9.43 |
E – Sales / Total Assets | 0.53 | 1 | 0.53 |
Z-Score | 11.60 |
Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
Explanation:
Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.
Interpretation
Facebook calculated Z-Score 11.60. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. Facebook Inc has a strong financial health and is very far from insolvency.
Overview
Facebook Inc. has a strong balance sheet and is liquid. The income statement shows that the company has been profitable in the last five years. The company has a very strong financial strength.
CITATION
https://www.morningstar.com/stocks/xnas/fb/quote
https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000033563
Researched and written by Criselda