Now that we have the future projected Financial statements in place, we enter into the Performance Measurement part of the model. We need to Performing Ratio Analysis for Facebook to see what has happened and what could happen in future! This is like looking at the crystal ball and trying to Performing Ratio Analysis for Facebook.
This exercise is on modeling ratio analysis taking into account both the historical and future financial statements of Facebook
I have for you a simple template to measure the performance of Facebook.
Go ahead and find the past as well as expected future performance of Facebook!!!
In the next step, we will provide you hints on performing ratio analysis for Facebook. Till then go on and measure the future of social networking by performing ratio analysis for Facebook valuation.
In the last tutorial we had started discussing regarding the ratio analysis for the Facebook model. We had released a simple template for Ratio Analysis Formula for Facebook.
I give you a simple hint on performing Ratio Analysis Formula for Facebook, and you should try to build the financial ratios of Facebook on your own.
Ratio Analysis Formula for Facebook is performed by calculating pure and mixed ratios. Pure P/L ratios are calculated using only P/L line items and pure B/S ratios are calculated using only B/S line items. The mixed ratios are calculated using both the P/L and B/S line items.
Profitability Ratios (Pure P/L Ratios)
Gross Profit Margins = Gross Profit / Revenue (sales)
EBITDA Margins = EBITDA / Revenue (sales)
EBIT Margins = EBIT / Revenue (sales)
EBT Margins = EBT / Revenue (sales)
Net Profit Margin = Net Profit / Revenue (sales)
Return on Investment Ratios (Mix Ratios)
Return on Assets (ROA) = Net Profit / Average Assets
Return on Stockholder's Equity (ROE) = Net Profit / average Equity
Liquidity Ratios (Pure B/S Ratios)
Current Ratio = Current Assets / Current Liabilities
Quick Ratio = Current Liquid Assets / Current Liabilities
Defensive Interval Ratio = Current Liquid Assets / Daily Operating Expense - (Mix Ratio)
I am sure after looking at this post you can easily calculate the financial ratios for Facebook.
What do you think about Facebook’s performance??
Share your thoughts!!
Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc
CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to email@example.com and we will rectify it.
2015 © Edupristine. ALL Rights Reserved.