Posts tagged " online social media "

Facebook Inc (FB) Extended Graph Analysis

April 17th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

FB logo

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

FB CASH FLOWS

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

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

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

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

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

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

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

 

Note:

Research Reports can be found under the company tab.