Company 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.facebook.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000033563

Researched and written by Criselda

 

Company Profile

Alibaba Group Holding Ltd Company is a Chinese multinational online company. Specializing in e-commerce, retail, internet and technology. Founded by Jack Ma on 4 April 1999 in Hangzhou, Zhejiang. Alibaba is a public company and traded as NYSE: BABA.

 

Alibaba Group Holding Ltd ADR (BABA N) Extended Graph Analysis

 

1. BABA CASH FLOWS

	2015	2016	2017	2018	2019	2020
Net cash provided by operating activities	41,217,000,000	56,836,000,000	80,326,000,000	125,171,000,000	150,975,000,000	196,996,000,000
Net cash used for investing activities	-53,454,000,000	-42,831,000,000	-78,364,000,000	-83,890,000,000	-151,060,000,000	-97,828,000,000
Net cash provided by (used for) financing activities	87,497,000,000	-15,846,000,000	32,914,000,000	20,359,000,000	-7,392,000,000	68,605,000,000
Capital expenditures	-7,705,000,000	-10,845,000,000	-17,546,000,000	-29,836,000,000	-49,643,000,000	-49,643,000,000
Free cash flow	33,512,000,000	45,991,000,000	62,780,000,000	95,335,000,000	101,332,000,000	147,353,000,000
Working capital	102,437,000,000	82,031,000,000	88,745,000,000	121,045,000,000	62,604,000,000	62,604,000,000

Facts:

• Cash provided by operating activities was CNY 196.996 billion in 2020.
• Cash used for investing activities were CNY -97.8 in 2020.
• Net cash provided by financing activities was CNY 68.605 billion in 2020.
• Capital expenditure was CNY -49.6 billion in 2020.
• Free cash flow was CNY 147 billion.
• Working capital was CNY 62.6 billion in 2020.

Explanation

• Cash from operations was increasing year-over-year and has a growth rate of 378 percent in five years.
• Cash from investing activities were purchases of property, plant and equipment, acquisitions and purchases of investments.
• Cash provided by (used for) financing activities were debt repayment and common stock repurchase.
• Capital expenditures were purchases of property, plant and equipment and purchases of intangibles.
• Free cash flow increases year-over-year and has a growth rate of 340% in five years.
• Working capital was erratic in movement in the last five years.

Interpretation

Alibaba was capable and efficient in maintaining a positive cash from operations, free cash flow and working capital in the last five years. 

 

2. BABA BALANCE SHEET

	2015	2016	2017	2018	2019
Total cash	125,999,000,000	115,696,000,000	150,801,000,000	210,210,000,000	203,165,000,000
Current Assets	142,109,000,000	134,070,000,000	182,516,000,000	256,855,000,000	270,273,000,000
Net property, plant and equipment	12,244,000,000	16,505,000,000	24,897,000,000	75,866,000,000	98,449,000,000
Total non-current assets	113,325,000,000	230,380,000,000	324,296,000,000	460,269,000,000	694,803,000,000
Total assets	255,434,000,000	364,450,000,000	506,812,000,000	717,124,000,000	965,076,000,000
Current liabilities	39,672,000,000	52,039,000,000	93,771,000,000	135,810,000,000	207,669,000,000
Non-current liabilities	70,323,000,000	95,424,000,000	134,242,000,000	215,492,000,000	265,150,000,000
Total liabilities	109,995,000,000	147,463,000,000	228,013,000,000	351,302,000,000	472,819,000,000
Retained earnings	24,842,000,000	78,752,000,000	108,558,000,000	172,353,000,000	257,886,000,000
Stockholders equity	145,439,000,000	216,987,000,000	278,799,000,000	365,822,000,000	492,257,000,000

Facts:

• Total cash was CNY 203 billion in 2019.
• Current assets were CNY 270 billion in 2019.
• Net property, plant and equipment was CNY 98 billion in 2019.
• Non-current assets were CNY 695 billion in 2019.
• Total assets were CNY 965 billion in 2019.
• Current liabilities were CNY 208 billion in 2019.
• Non-current liabilities were CNY 265 billion in 2019.
• Total liabilities were CNY 473 billion in 2019.
• Retained earnings were CNY 258 billion in 2019.
• Stockholders equity was CNY 492 billion in 2019.

Explanation

• Cash was increasing year-over-year and has a growth rate of 61% in five years. It represents 21 percent of the total assets.
• Current assets represent 28 percent of total assets and have a growth rate of 90 percent in five years.
• Net property plant and equipment represents 10 percent of total assets. It grew 704 percent in five years.
• Non-current assets was 72 percent of total assets and it grew 513 percent in five years.
• Total assets grew 278 percent in five years.
• Current liabilities represent 44 percent of total liabilities.
• Non-current liabilities represent 56 percent of total liabilities.
• Total liabilities represents 49 percent of total equities and liabilities.
• Retained earnings represent 52 percent of total equities.
• Stockholders equity represents 41 percent of total equities and liabilities.

Interpretation

The balance was strong and in good health. The company was efficient in maintaining a solid balance sheet in the last five years. 

 

3. BABA INCOME AND MARKET

	2015	2016	2017	2018	2019	2020
Revenue	76,204,000,000	101,143,000,000	158,273,000,000	250,266,000,000	376,844,000,000	488,895,000,000
EBIT	23,637,000,000	29,958,000,000	48,055,000,000	70,363,000,000	57,750,000,000	94,306,000,000
Net Income	24,261,000,000	71,460,000,000	43,675,000,000	64,985,000,000	87,886,000,000	172,126,000,000
EBITDA	39,491,000,000	90,115,000,000	76,992,000,000	125,989,000,000	138,491,000,000	212,655,000,000
Market Capitalization	0	1,356,753,374,878	2,601,380,048,653	2,601,380,048,653	3,231,462,292,833	3,231,462,292,833
Intrinsic Value	0	0	5,454,154,281,120	7,219,369,371,316	13,772,141,627,743	12,164,643,972,274

Facts:

• Revenue was CNY 489 billion in 2020.
• EBIT was CNY 94 billion in 2020.
• Net Income was CNY 172 billion in 2020.
• EBITDA was CNY 213 billion in 2020.
• Market capitalization was CNY 3 trillion in trailing twelve months.
• The calculated intrinsic value was CNY 12 trillion in trailing twelve months.

Explanation:

• Revenue increases year-over-year and has grown 542 percent in five years.
• EBIT has a growth of 299 percent in five years.
• Net income grew 609 percent in five years.
• Market capitalization increased year-over-year and grew 138 percent in five years.
• Intrinsic value was over 276 percent against market capitalization, therefore market price was undervalued.

Interpretation

Alibaba was profitable in the last five years. The management was able to generate more than enough revenue for the operation of the business.

 

4. BABA FINANCIAL RATIOS

	2015	2016	2017	2018	2019	2020
Asset turnover (average)	0.42	0.33	0.36	0.4	0.45	0.43
Return on assets %	13.16	23.06	10.03	10.46	10.41	15.37
Return on equity %	27.63	39.43	17.62	19.85	20.42	28.54
Debt/Equity	0.35	0.25	0.28	0.33	0.23	0.16
Return on invested capital %	13.99	11.08	12.13	9.72	9.89	12.16
Interest coverage	12.72	42.86	23.47	29.16	19.54	37.63

Facts:

• Asset turnover was averaging 0.43 in 2020.
• Return on assets was 15.37 percent in 2020.
• Return on equity was 28.54 percent in 2020.
• Debt/Equity ratio was 0.16 in 2020.
• Return on invested capital was 12.16 percent in 2020.
• Interest coverage was 37.63 in 2020.

Explanation

• Asset turnover indicates that for every $1 in asset, the company generates 0.43 CNY.
• Return on assets indicates that the company produces .15 CNY of net income for every CNY invested in assets.
• Return on equity indicates that for every CNY invested in equity, it earns .2854 CNY net income.
• Debt/Equity ratio indicates that for every CNY in equity, the company has .16 CNY in leverage.
• Return on invested capital means the company earns .12 CNY profit for its invested capital.
• Interest coverage means that the company can afford to pay its interest payment 38 times of its current financial obligations.

Interpretation

The financial ratios show that the company is managed very well from its business operations. The company is profitable.

 

5. BABA KEY EXECUTIVE

NAME	TITLE
Sophie Minzhi WU	Chief Customer Officer
Timothy A. Steinert	General counsel and Corporate Secretary
Luyuan Fan	Pres, Alibaba Digital Media and Entertainment
J. Michael Evans	Director and President
Shan Trudy Dai	President Wholesale Marketplaces
Jeff Jianfeng Zhang	Chief Technology Officer and President
Junfang Jessie Zheng	Chief Risk Officer and Chief Platform Governance Officer
Pen-Hung Chris Tung	Chief Marketing Officer
Judy Wenhong Tong	Chief People Officer

Facts:

Alibaba does not reveal the key executive compensation.

 

6. BABA LOBBYING AND CONTRIBUTIONS

Period	USD
2011	100,000
2012	461,000
2013	430,000
2014	450,000
2015	410,000
2016	1,020,000
2017	2,010,000
2018	2,740,000
2019	2,620,000

Facts:

Alibaba has been spending annual lobbying and contributions since 2011. The figures vary  every period. A Note from OpenSecrets is quoted as follows:

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 January 23, 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. BABA FINANCIAL STRENGTH

DATA	CNY
Working capital	62,604,000,000
Total assets	965,076,000,000
Sales	488,895,000,000
EBIT	94,306,000,000
Market value of equity	3,404,603,312,500
Book value of total liabilities	472,819,000,000
Retained earnings	257,886,000,000

CALCULATION

	Ratio	Score	Result
A – Working Capital / Total Assets	0.06	1.2	0.08
B – Retained Earnings / Total Assets	0.27	1.4	0.37
C – EBIT / Total Assets	0.10	3.3	0.32
D – Market Value of Equity / Book Value of Total Liabilities	7.20	0.6	4.32
E – Sales / Total Assets	0.51	1	0.51
Z-Score			5.60

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

Alibaba. has a Z-Score of 5.60. 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.

Overview

Alibaba Group Holding Ltd ADR has a strong balance sheet and is financially healthy. The income statement shows that the company was profitable and liquid. The stock price of Alibaba was undervalued, therefore, could be a good Buy.

CITATION

https://www.morningstar.com/stocks/xnys/baba/quote

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2011&id=D000064488

https://www.alibabagroup.com/en/global/home

Researched and written by Criselda