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Facebook Analysis | Assignment
Added on -2019-09-18
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Running Head: FACEBOOK ANALYSISAssignment TitleStudent NameStudent NumberCourse NameInstructor NameDate1
FACEBOOK ANALYSISTable of ContentsIntroduction......................................................................................................................................3Financial Performance Analysis......................................................................................................3Liquidity Analysis.......................................................................................................................4Profitability..................................................................................................................................5Efficiency.....................................................................................................................................7Capital Structure..........................................................................................................................9Stock Market Performance........................................................................................................10Problems or Limitation..................................................................................................................11Recommendation...........................................................................................................................12Conclusion.....................................................................................................................................13Reference.......................................................................................................................................142
FACEBOOK ANALYSISIntroductionFacebook Inc., is a company that falls under the Internet information providing industry was incorporated on 29, July 2004 (Yahoo Finance, n.d.). Facebook focuses on building productsthat would make people connect with each other using a computer, mobile or any other devices (Reuters, n.d.). The Company provides a safe and secured platform to share their personal and professional information with others across the world and provides all world information to them. The product of the company includes Facebook, WhatsApp, Instagram, Oculus, and Messengers (Weinberger, 2015). They provide platforms that are extensively used by various companies for marketing their products, and they generate revenue by selling advertisement placements to marketers. Facebook is popular around the world and is used by millions of peopleacross the globe. In this paper, there is a detailed financial analysis performed to know about the financial performed of Facebook and recommendations are provided for improving them.Financial Performance AnalysisIt is essential to make a comparative financial analysis using the historical financial information of the company. In this case, the five-year financial ratio is taken into consideration for making an analysis of the financial performance and position of the company (Horngren, Harrison and Oliver, 2011). There are industrial data available for the company that is used for making a comparative analysis so an appropriate evaluation of the financial performance of Facebook can be performed. In this section, there is a detailed analysis of liquidity, profitability, efficiency, capital structure and stock performance of the company over the past five years.3
FACEBOOK ANALYSISLiquidity AnalysisThe five-year liquidity ratios of the Facebook are as follows:20122013201420152016IndustryCurrent Ratio10.7111.889.611.2511.972.41Quick Ratio10.2611.469.0410.9111.631.33 Data Source: Reuters, n.d. and Morningstar, n.d.Current ratio and quick ratio indicates the liquidity position of the company (Reilly and Brown, 2011). The current ratio of the company is disclosing a fluctuating trend. It increased during 2013 and decreased during 2014. But the current ratio of the company is consistently increased from 2015. When compared to the industrial ratio the current ratio of Facebook is considerably higher. A quick ratio of the company is disclosing a fluctuating trend (Green, 2013). It increased during 2013 and decreased during 2014. But the quick ratio of the company isconsistently increased from 2015. When compared to the industrial ratio the quick ratio of Facebook is considerably higher. Thus, the overall liquidity position of the company is significantly higher when compared to the industry. It indicates that Facebook has better workingcapital management and has strong liquidity position that will enable them to have better business operation management (Hoefflinger, 2017). ProfitabilityThe five-year profitability ratio and percentage change on Year on Year basis for all the ratios:4
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