facebook

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 TOPICS

FS Analysis Press Releases

Recommendations
 FS
FSANALYSIS
ANALYSIS
MVA
the sum of all capital claims held against the
company plus the market value of debt and
equity.
• Market Value Added EVA
a measure of a company's financial
• Economic Value Added performance based on the residual wealth
calculated by deducting its cost of capital
• Free Cash Flow from its operating profit, adjusted for taxes
on a cash basis.
FCF
a measure of a company's financial
performance, calculated as operating cash
flow minus capital expenditures.
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 FS ANALYSIS
Ratio Analysis
used to evaluate various aspects of a
company’s operating and financial
performance such as its efficiency, liquidity,
• Ratio Analysis profitability and solvency.
Profitability & Debt Management Ratios
• Profitability & Debt the direction of a client's cash and securities
Management Analysis while debt management analysis are used to
evaluate a prospective borrower's suitability
• Vertical Analysis for a mortgage or other loan.
Vertical Analysis
reports each line item of a financial
statement as a representation of the
percentage of the statement's main focus.
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Market Value
Added

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 Market Value
Added

Facebook’s MVA has increased for the past years. It indicates an

increasing shareholder’s value over time thus giving the stock price
of Facebook a higher value.

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 Market Value Added

2016

2015

2014

2013

2012

0 50000 100000 150000 200000 250000 300000 350000

Economic Value
Added

Facebook has been in a bad performance during the previous years

due to:

• Increase in investing capital to acquire Instagram in 2012

• Acquisition of WhatsApp in 2014
• New platform including expansion of its services, shifting into virtual reality,
acquiring streaming rights and music rights in 2015

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Economic Value
Added
38727
40000

35000 31660
30548
30000

25000

20000

15000
9712
8117
10000 7020
5981
2748 2936
5000 1539 757

0
-1422012 -800 2013 2014 -202 2015 -124 2016
-5000

NOPAT Invested Capital Economic Profit

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Free Cash Flow

Outstanding FCF Yield

  Free Cash Flow Stock Price
Shares (FCF per share/Stock price)

Dec 2012 483,000,000 2.372B 26.6197 .77%

Dec 2013 748,000,000 2.547B 54.649 .54%

Dec 2014 2,935,000,000 2.778B 78.02 1.35%

Dec 2015 3,856,000,000 2.834B 104.66 1.3%

Dec 2016 5,081,000,000 2.892B 115.05 1.52%

June 2017 3,916,000,000 2.90B 150.98 .89%

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Free Cash Flow

For the past 5 years the FCF yield of FB has increased.

This means that investors would like to pay as little price as possible for as
many earnings as possible. They prefer to free cash flow yield as a valuation
metric over an earnings yield.

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 Free Cash Flow
6000

5081
5000

3856 3916
4000

2935
3000

2000

1000 748
483

0
Value (in mil)

2012 2013 2014 2015 2016 2017

 Ratio Analysis

Facebook’s liquidity ratio may

have slightly gone down but,
this ratio is considered the
highest among other
establishments in the industry.

Historically, their current

liquidity ratio is at 13.56 (data
from over the 10 years). Their
high liquidity ratio indicates the
company’s confident ability to
pay their current liabilities given
their current assets.

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 Ratio Analysis
Fixed Asset Turnover Ratio
100.00%
90.00%

The increase in Facebook’s total assets 80.00%

70.00%

turnover was still due to the sharp 60.00%

50.00%
increase in their Revenue despite the 40.00% 84.89% 87.70%

increase in their total assets. This

30.00%
20.00%

indicates that the company is efficiently 10.00%

0.00%

handling their assets to produce

1 2

revenue. Total assets turnover

On the other hand, assessing
Facebook’s fixed asset and total assets 12.62%

turnover ratio, it shows that majority of

Facebook’s assets are current assets 11.69%

and long term assets other than PPE.

1 2

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 Profitability &
Debt Management
Analysis

Operating margin Return on total assets

47.22% 5.27%

41.42% 4.45%
Basic earning power
5.96%
Q1 Q2 4.84% Q1 Q2

Profit margin Return on equity

Q1 Q2
41.73% 5.85%

38.09% 4.92%

Q1 Q2 Q1 Q2

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Vertical Analysis

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 Press
Releases

Facebook Inc (FB) Stock Will Surpass $200 Before

2017 is Through
The company’s revenues depend highly on advertisements and
desiring to be independent on it, the firm is expanding its social
media offerings. Fayteq may also be able to create Virtual-Reality-
enhanced features. Another innovation that FB is working on is
Watch. It’s a new offer of the social media wherein original video
programming is curated on an individual basis for each user. With the
increased users of FB through use of Watch it is no doubt that FB may
potentially lure advertisers away from GOOGL as it allow advertisers
to reach a better target of prospect customers.
Recommendations

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Recommendations

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 References

Hoy, L. (2017, August 29). Why Facebook Inc (FB) Stock Will Surpass $200 Before
2017 is Through. Retrieved from Investor Place:
https://investorplace.com/2017/08/facebook-inc-fb-stock-surpass/view-
all/#.WbJByMiGPIV
https://investorplace.com/2017/07/facebook-inc-fb-stock-soar-more-
40/2/#.WbUEZsgjHIU
http://www.marketwatch.com/story/next-stop-for-facebook-shares-200-say-analysts-
applauding-results-2017-07-27
https://investorplace.com/2017/07/facebook-inc-fb-stock-soar-more-40/view-
all/#.WbUFD8gjHIU
https://www.forbes.com/sites/markberniker/2016/03/08/why-facebook-is-the-best-
global-social-mobile-video-investment-for-the-future/#1386abc021ab
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