Facebook Financial Statements and Financial Ratios

Meta (Facebook) Summary

Meta (Facebook) stock price started in February of 2019 at $171.20.  It ended in January of 2020, with a stock price of $210.47.  This is a growth rate annually of 22.94%.  From an investor’s perspective, this growth rate well exceeds overall market returns.

Facebook has not paid out dividends in the last five years.  The zero dividend payment policy may be due to the company’s need for internal growth.  However, over the next several years, investors should expect some type of dividends to be paid once the organization reaches the mature phase of its business cycle.

The current executive team and compensation are as follows.

Executive Team
Executives	Title	Pay Amount
Mark Zuckerberg	CEO	22.5 Million
David Wehner	CFO	1.26 Million
Sheryl Sandberg	COO	5.3 Million
Michael Schroepfer	CTO	1.33 Million
Susan Taylor	CAO	N/A

Meta (Facebook) Financial Report Sources

“Facebook 2021 Financial Report and Analysis: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA., and owner of Quality Business Plan.  In this book, the author selected Facebook's 2021 10k, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and Facebook's 2019 10k annual report as the basis for information gathering. 

 

 

 

Section 1: Meta (Facebook) Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is essential.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc., in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Facebook’s significant income statement line item trends in most cases.

Revenue Growth:

Meta’s revenues were $40.6 billion in 2017.  In the next several years, the company increased its revenues to $117.9 billion in 2021.  On average, this is a 30.7% revenue growth annually.  This trend shows that the organization is able to increase its revenues at an above-average pace year-over-year as compared to other industry competitors, based on my experience and research.  An excellent trend for a multinational organization.

Analyst Grade: A

Meta (Facebook) 2021 Income Statement
Column1	2021	2020	2019	2018	2017
Revenues	117,929	85,965	70,697	55,838	40,653
COGS	22,649	16,692	12,770	9,355	5,454
Gross Profit	95,280	69,273	57,927	46,483	35,199
SG&A	9,829	6,564	10,465	3,451	2,517
Depreciation	7,967	66,862	5,741	4,315	3,723
R & D	24,655	18,447	13,600	10,273	7,754
Other
Total Operating Expenses	42,451	91,873	29,806	18,039	13,994
EBIT	46,753	32,671	23,986	24,913	20,203
Other Income			-	-	-
Interest Expense	(531)	(509)	(826)	(448)	(391)
EBT	47,284	33,180	24,812	25,361	20,594
Taxes	7,914	4,034	6,327	3,249	4,660
Net Income	39,370	29,146	18,485	22,112	15,934

 

Section 2: Meta (Facebook) Balance Sheet Analyzed

For Facebook's balance sheet, I again go through each vital line item from the balance sheet.  In reviewing each line item, I will define Facebook’s balance sheet line item, such as cash, property, plant and equipment, and liabilities.  Next, I then offer a summary analysis of Facebook’s essential balance sheet line items.

Cash:   

Meta’s cash holding was $8 billion in 2017.  As compared to the sales, their cash position was 19.9%.  In the next four years, Meta would increase their cash holdings ending 2021 at $16.6 billion or 14.1% of sales.  This trend indicates that the company is able to hold less cash as compared to the sales year-over-year and still over current liabilities sufficiently.  This is an excellent trend from an investor’s perspective.

Analyst Grade: A

Meta (Facebook) 2021 Summary Balance Sheet
Column1	2021	2020	2019	2018	2017
Cash	16,601	17,576	19,079	10,019	8,079
Short Term Investment	31,397	44,378	35,776	31,095	33,632
Account Receivable	14,039	11,335	9,518	7,587	5,832
Inventory
Other
Current Assets	66,666	75,670	66,225	50,480	48,563
Net PPE	57,809	45,633	35,323	24,683	13,721
Goodwill	19,197	19,050	18,715	18,301	18,221
Other
Total Assets	165,987	159,316	133,376	97,334	84,524
Accounts Payable	4,083	1,331	1,363	820	380
Accrued Expense	14,312	11,152	11,735	5,509	2,892
Accrued Taxes			-
Notes Payable			-
LT Debt - Current			-
Other			-
Total Current Liabilities	21,135	14,981	15,053	7,017	3,760
LT Debt
Other
Total Liabilities	41,108	31,026	32,322	13,207	10,177
Common Stock	55,811	50,018	45,851	42,906	40,584
Treasury			-
Retained Earnings	69,761	77,345	55,692	41,981	33,990
Other
Total Equity	124,879	128,290	101,054	84,127	74,347
Total Equity & Liability	165,987	159,316	133,376	97,334	84,524

Section 3: Meta (Facebook) Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for Meta (Facebook).  In reviewing each of Facebook’s financial ratios, I first start by defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of Facebook’s Important Financial ratios. 

Meta (Facebook) Current Ratio

Meta’s current ratio was 12.9 in 2017.  In the next several years, the company reduced its current ratio to 3.1 in 2021.  This trend indicates that the company is taking steps to improve its current asset utilization.  However, a 3.1 current ratio is still excessive as compared to other multinational organizations.  From this, the company still needs to further improve its current asset handling procedures.  From an investor’s perspective, this is a poor trend.

Analyst Grade: B

Meta (Facebook) Return on Assets

Meta’s return on assets (ROA) was 18.8% in 2017.  In the next several years, the organization’s return on assets would increase to 23.7% in 2021.  This trend indicates that the company is doing a better job year-over-year in aligning assets with generating revenues.  From an investor’s perspective, this is a good trend.

Analyst Grade: A