In-depth Financial and Sustainability Analysis of Freelancer.com

This report provides a financial analysis of Freelancer.com, a global crowdsourcing marketplace. It examines the company's business model, its performance on the stock exchange, and key financial metrics such as revenue, profit after tax, and earnings per share. The analysis includes a comparison with industry peers like Twitter, Google, and LinkedIn, highlighting the challenges Freelancer.com faces in delivering returns to investors. Trend analysis reveals that while revenue has increased, rising operating expenses have impacted profitability. The report concludes by emphasizing the need for Freelancer.com to focus on increasing profits by either reducing operating expenses or adjusting service pricing to ensure long-term financial sustainability. Desklib provides access to this and other solved assignments.

Freelancer.coom
Financial and sustainability analysis
Financial Research Analysis
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Table of Contents
Introduction...........................................................................................................................................1
Business model of the Freelaner.com Company...................................................................................1
Floating on the security stock exchange................................................................................................2
Data revealed by the price earnings multiples of Freelancer.com Company and comparison with the
Twitter, Google and LinkedIn.................................................................................................................2
Trend analysis of Freelaner.com Company’s revenue, profit after tax and earning per share..............3
Usefulness of the peer analysis when analysing the company..............................................................5
Conclusion.............................................................................................................................................5
References.............................................................................................................................................6

Introduction
This report focuses on the financial analysis of Freelaner.com Company. There are
several financial analysis tools which could be used to assess the financial performance of
company such as trend analysis, ratio analysis and top down analysis.
Business model of the Freelaner.com Company
Freelaner.com Company is a global crowdsourcing marketplace website which has been
offering freelancer portal services to potential employees who could bid to complete the
assigned task. The business model of the Freelaner.com Company is accompanied with the
following features which allows employees to bid for their invited tasks, connecting
freelancers and employers with each other’s and allowing others to globally connect with
each other. The business model of the Freelancer.com has been described as below
(Freelancer.com Company, 2018).
(Freelancer.com Company, 2018).

Floating on the security stock exchange
Floating on the security stock exchange means the market capitalization of the company and
total number of the shares of the stock that are available for trading in the open market.
Currently, the market capitalization of company is $ 700 million (Yahoo finance, 2018).
Price earnings multiple of Freelancer.com Company
Price earnings multiple of Freelancer.com Company is accompanied with the price earning
return on the equity and market price of company. However, price earning is described as
relatively rare as it is hard to find the exact financial data which could be used to determine
the price earnings and market share of company. However, by computing the earing per share
available to equity shareholders and market share price of the shares of Freelaner.com
Company, we could easily determine the price earnings ratio.
Data revealed by the price earnings multiples of
Freelancer.com Company and comparison with the
Twitter, Google and LinkedIn.
The earning per share of company is -1.10 which is reflecting the negative outcomes. In this
case, the price earnings ratio of company will be zero. As there is no price earning on the
shares hold by the investors (Bloomberg, 2018).
In addition to this, after taking the closing price of the Google, $ 561 and divided by the EPS
21.34 the price earnings ratio of Google would be $561.14/21.034 = 26.68. It reflects that

Google is ready to pay $26.68 on the investment of $ 1. Apart from that, the closing price of
the Twitter is $-0.15 and divided by the EPS 54.2 then the price earnings ratio of Twitter
would be $-0.15 /21.034 = 0000. It reflects that Twitter has failed to deliver the positive
outcomes on the value on the shares. In context with the LinkedIn, the closing price of the
LinkedIn is $195.96 and it would be divided by the EPS 5.2 then the price earnings ratio of
LinkedIn would be $-1.24 (Freelancer.com Company, 2018). It is divulged that this company
has also failed to add value to the investment made by the shareholders (Morningstar, 2018).
After analysing the industry situation, it could be inferred that not only Freelacer.com but
other rivals such as LinkedIn and Twitter are facing issue in offering the good return to its
investors. Nonetheless, these all companies have faced these issues due to the sluggish
market condition and negative business outcomes throughout the time (Ehiedu, 2014).
Trend analysis of Freelaner.com Company’s
revenue, profit after tax and earning per share
Freelaner.com Company has been expanding business throughout the time. However, with
the increasing revenue, company has indulged in developing the cost leadership strategy
throughout the time. It is analyzed that Freelaner.com Company has faced issue of cost
cutting and also reduced its overall profit earning capacity. The main mission of company is
to allow all type of services to its clients at very cheap price and while offering the services at
very least cost it is resulting to the high business loss to organization. In addition to this,
Freelaner.com Company has also made $ 594 million investment in its research and
development department which have increased the cost of capital and other operating
expenses (Freelancer.com Company, 2018). The increased operating expenses and interest
changes have also resulted to increase in the overall costing of the business. Therefore, with
the increase in its revenue, company has also increased its operating expenses as well
(Flannery, 2016).

(Bloomberg, 2018).
Therefore, after assessing the financial information of the company, it could be inferred that
Freelaner.com Company has increased its revenue throughout the time but with the increase
in its total revenue, it has also increased its operating expenses (Moroney, and Trotman,
(2016). For instance, 2015, total operating expenses of company is very high in 2015 which
overcut the total revenue of the company. This has shown that if company does not cover its
operating expenses with the increased revenue then it might destruct the value of the
company and also increase the overall financial leverage of company (Mwangi, and Murigu,
2015).
Trend analysis of Freelaner.com Company
Years 2015 2016 2017 2018 2019 2020
Total
revenue ($
in million)
43825 37349 154497 180247 202545 250754

Net profit
after tax
-2666 330 2269 2758 3585 4252
EPS 0 2.5 3.2 3.5 3.7 4.1
The trend analyses have been done to identify the estimated revenue, EPS and net profit after
tax of company which it would have in future. The future trend of company is very good and
reflecting that company is having increasing business revenue trend and will grow in future.
However, the main reason of loss in 2015 was related to its increased business operating
expenses (Weygandt, Kimmel. and Kieso, 2015).
Usefulness of the peer analysis when analysing the
company
The main Usefulness of the peer analysis when analysing the company is to identify the
loopholes of the company which have resulted to high financial risk and low profitability. It
will allow researchers to compare the research which will allow it to identify the future
sustainability, business growth and profit earning capacity of company. The peer analysis
also allow researcher to identify the different methods and analysing factors from the
different perceptive which will assist him to identify the possible hidden issues and problems
in company (White, Sondh, and Fried, 2015).
Conclusion
After analysing all the facts and details of company, it could be inferred that
Freelaner.com Company has faced issue of the high operating expenses in its business which
have resulted to the loss of its business in spite of its increasing revenue. Now in the end, it
could be inferred that Company should focus on increasing its profit by reducing its operating
expenses or should increase the price of its services so that it could cover its operating
expenses.

References
Bloomberg, (2018) Available at https://www.bloomberg.com/markets/fixed-income/.,
Accessed on 17th September 2018
Ehiedu, V.C., (2014). The impact of liquidity on profitability of some selected companies:
The financial statement analysis (FSA) approach. Research Journal of Finance and
Accounting, 5(5), pp.81-90.
Flannery, M.J., (2016). Stabilizing large financial institutions with contingent capital
certificates. Quarterly Journal of Finance, 44(3), pp.20-29.
Freelancer.com Company, (2018) annual report Available at
https://www.freelancer.com/about/investor-pdf.php?id=58254758&name=FLN
%202017%20Financial%20Report%20v14%20FINAL., Accessed on 17th September 2018
Morningstar, (2018) Available at https://www.bloomberg.com/markets/fixed-income/.,
Accessed on 17th September 2018
Moroney, R., and Trotman, K. T. (2016). Differences in Auditors' Materiality Assessments
When Auditing Financial Statements and Sustainability Reports. Contemporary Accounting
Research, 33(2), 551-575.
Mwangi, M. and Murigu, J.W., (2015) The determinants of financial performance in general
insurance companies in Kenya. European Scientific Journal, ESJ, 11(1).
Weygandt, J.J., Kimmel, P.D. and Kieso, D.E., (2015). Financial & managerial accounting.
3rd ed, Australia: John Wiley & Sons.
White, G.L., Sondh, A.C. and Fried, D., (2015). Analysis of Financial Statement. Analysis.
14(3), pp.240-259.
Yahoo finance, (2018) Available at https://in.finance.yahoo.com/., Accessed on 17th
September 2018