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"Facebook"
Anel Konysbayeva
Diana Almaskyzy
Fin-1801K
Introduction
Facebook is an American social networking company founded by Mark Zuckerberg. The first social network - Facebook - was launched on February 4, 2004. Headquartered in Menlo Park, California, the company generates nearly all of its revenue from selling advertisements to marketers.
Products of "Facebook"
1.
Balance sheet
In millions $
2015
2016
2017
2018
2019
Current assets
21652
34401
48563
50480
66225
Non-current assets
27755
30560
35961
46854
67151
Total assets
49407
Table
64961
84524
97334
133376
Current liabilities
1925
2875
3760
7017
15053
Non-current liabilities
3264
2892
6417
6190
17269
Total liabilities
5189
5767
10177
13207
32322
Owners equity:
44218
64961
74347
84127
101054
Trend analysis of liabilities
Growth of liability
Accured exp. and other current liability include accrued compensation and benefits ,property and equipment ,promissory note payable and other current liabilities
It also include Accrued legal settlements for FTC and BIPA ($5550).) Includes accrued legal settlements for U.S. Federal Trade Commission (FTC) of $5.0 billion and Illinois Biometric Information Privacy Act (BIPA) of $550 million.
Reasons for non-current liabilities growth:
Non-current liabilities:
- Capital lease obligations, less current portion
- Operating lease liabilities, non-current
- Other liabilities
Growth reason:
- In 2019 additional operating and finance leases for facilities and network equipment that have not yet commenced with lease obligations. These operating and finance leases will commence between 2020 and 2023 with lease terms of greater than one year to 25 years.
- Other liability include income tax liability and differed tax liability, other liability. So, Facebook's net income increase.
In % term:
Trend analysis of owners equity:
33.87%
2015-2016
2016-2017
Trend analysis of owners equity
25.6%
2017-2018
13.15%
2018-2019
20.12%
Reason
Reasons for owners equity growth:
Facebook is authorized to issue 5,000 million shares of Class A common stock and 4,141 million shares of Class B common stock, each with a par value of $0.000006 per share. Every year number of shares issued and outstanding raised.
- The 2015 year: 2,293 million shares of Class A and 552 million shares of Class B.
- The 2016 year: 2,354 million shares of Class A and 538 million shares of Class B.
- The 2017 year: 2,397 million shares of Class A and 509 million shares of Class B.
- The 2018 year: 2,385 million shares of Class A and 469 million shares of Class B.
- The 2018 year: 2,407 million shares of Class A and 445 million shares of Class B.
The owner equity growing because the market price of shares rises. So, additional paid-in capital rises. Also, Facebook's gross unrealized gains on marketable securities rose.
Income statement
Graph
2018
DAU's were 1.52 billion
2019
Income statement
DAU's were 1.66 billion and MAU's were 2.50 billion
Facebook's spending increased by 51%. Reason: improve security and privacy and limit the spread of disinformation on the platform. stop the development of fake political ads; disinformation, harassment.
The Facebook generate substantially all of revenue from advertising. Advertising revenue from 2017 to 2018 increased by 27%. (2018 year-$55013; 2019 year- $69655).
Graph 2
Expenses of the company:
Cost of revenue consists primarily of expenses associated with the delivery and distribution of the products
These include expenses related to the operation of our data centers, such as facility and server equipment depreciation, salaries, benefits, and share-based compensation for employees
Cost of revenue also includes costs associated with partner arrangements, including traffic acquisition and content acquisition costs, credit card and other transaction fees
Also includes Income Taxes, Advertising Expense and etc.
Expences
Additionally the company is also expanding into services like online payments, eCommerce, and business messaging. All of these projects requires big investments and money. However these services don’t make much money yet but likely will in the future. Since the company get its main source of income from ads they also have to provide users interest and impression as well as high informational security. Developments of such programs also need big money supports.