Meta Platforms
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GB530 Final Report
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Contents
Research Report: Financial Statement Analysis on Meta Platforms
..........................................
3
1. Introduction:
...........................................................................................................................
3
2. Financial Performance Analysis:
............................................................................................
3
2.1 Revenue Analysis:
............................................................................................................
3
2.2 Profitability Analysis:
.......................................................................................................
3
2.3 Earnings per Share (EPS):
................................................................................................
4
3. Liquidity and Solvency Analysis:
..........................................................................................
4
3.1 Current Ratio:
...................................................................................................................
4
3.2 Debt-to-Equity Ratio:
.......................................................................................................
4
4. Efficiency Analysis:
...............................................................................................................
4
4.1 Asset Turnover:
.................................................................................................................
4
4.2 Return on Assets (ROA) and Return on Equity (ROE):
...................................................
4
Business Condition of Meta Platforms
......................................................................................
5
Financial Performance Comparison:
..........................................................................................
5
Revenue:
.................................................................................................................................
5
Profitability:
............................................................................................................................
5
User Base and Market Position:
.............................................................................................
6
Competitive Landscape:
.........................................................................................................
6
Strategic Initiatives:
................................................................................................................
6
2
Executive Summary:
This research report offers a thorough financial statement analysis of Meta Platforms, a
publicly traded US company. Numerous social media platforms and related services are run
by Meta Platforms, a technology conglomerate formerly Facebook Inc. The analysis covers
the company's financial performance, profitability, liquidity, solvency, and efficiency for the
fiscal year ending March 31, 2023. The report aims to assist stakeholders and investors in
assessing the Meta Platforms' financial health and investment potential.
• Write a research report providing financial statement analysis on a specific US
company whose stock is publicly traded.
Research Report: Financial Statement Analysis on Meta Platforms
1. Introduction:
With its corporate headquarters in Menlo Park, California, the top technology company Meta
Platforms trades under the "META." It manages several popular social media platforms,
including Facebook, Instagram, WhatsApp, and Messenger.The financial statement analysis
examines Meta Platforms' annual report, SEC filings, and pertinent financial data to evaluate
its performance and financial position.
2. Financial Performance Analysis:
2.1 Revenue Analysis:
According to Meta Platforms, as of March 31, 2023, total revenue was $28.645 billion, up
2.64% from the previous year. Higher user engagement, more advertising opportunities, and
the addition of new services are all responsible for the increase in revenue.
2.2 Profitability Analysis:
Gross Profit Margin: For the quarter that ended in March 2023, Meta Platforms achieved a
gross profit margin of 78.68%, indicating strong profitability and effective cost control.
Operating Profit Margin: As of March 31, 2023, the operating profit margin was 22.04%,
demonstrating the company's capacity to make significant profits from its operations.
Net Profit Margin: As of March 31, 2023, Meta Platforms reported a net profit margin of
18.27%, indicating effective operating expense management and high overall profitability
(
Yaddanapudi, Chaudhary,& Saxena,2022).
3
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2.3 Earnings per Share (EPS):
The company reported diluted earnings per share (EPS) of $2.20 for the three months ended
March 31, 2023, a decrease of 19.12% from the prior year. The decrease in EPS can be
attributed to lower revenues, slightly worsened operating efficiency, and inefficient capital
management.
3. Liquidity and Solvency Analysis:
3.1 Current Ratio:
As of March 31, 2023, Meta Platforms' current ratio was a healthy 2.07, showing a strong
capacity to pay short-term obligations. This suggests the business has enough liquid assets to
cover its short-term obligations.
3.2 Debt-to-Equity Ratio:
With a debt-to-equity ratio of 0.08 as of March 31, 2023, Meta Platforms had a conservative
capital structure and little reliance on debt financing. The ability of the company to use
internally generated funds to finance operations and growth strengthens the company's
financial position.
4. Efficiency Analysis:
4.1 Asset Turnover:
For the three months ending March 31, 2023, Meta Platforms demonstrated a high asset
turnover ratio of 0.16, indicating efficient use of its assets to generate revenue. The business
efficiently uses its infrastructure and resources, such as user data, to boost sales.
4.2 Return on Assets (ROA) and Return on Equity (ROE):
Meta Platforms' return on assets (ROA) was 12.27%, and its return on equity (ROE) was
17.14% as of March 2023. These figures demonstrate the company's ability to generate
favourable returns on its assets and shareholders' equity.
According to the analysis of financial statements, Meta Platforms have shown strong
financial performance, profitability, liquidity, solvency, and efficiency. The company has
experienced significant revenue growth, high profitability margins, and efficient asset
4
utilisation. Meta Platforms has maintained a conservative capital structure and a strong
liquidity position to increase its financial stability.
Investors and stakeholders should consider the growth potential of Meta Platforms, its
capacity for innovation and adaptation to shifting market dynamics, and any potential
regulatory challenges that may impact the company's future performance. It is crucial to
conduct additional research, considering qualitative factors and industry trends, before
making investment decisions.
•
Discuss the company’s business condition. In order to put up a clear picture of the
company’s business level, a comparison in finance is needed between the company and
one of its biggest competitors.
Business Condition of Meta Platforms
A technology conglomerate called Meta Platforms, formerly known as Facebook Inc. runs
various social media platforms and associated services. The business condition can be
determined by assessing the company's financial performance, market position, competitive
environment, and strategic initiatives. A comparison with one of its main rivals will be made
to give a clear picture. In this instance, a well-known social media company called Twitter
Inc. will be contrasted with Meta Platforms.
Financial Performance Comparison:
Revenue:
While Twitter reported revenue of $4.7 billion in 2022, Meta Platforms reported total revenue
of $128.2 billion. Compared to Twitter, Meta Platforms' revenue base is significantly higher,
underscoring the company's wider market reach and increased user engagement on various
platforms.
Profitability:
Twitter and Meta Platforms both showed profitability, but Meta Platforms consistently
reported higher profitability margins. Compared to Twitter, which had a net profit margin of
5
5.3% in 2022, Meta Platforms had a net profit margin of 37.2%. Meta Platforms can profit
from their bigger user base, numerous advertising options, and monetisation techniques.
User Base and Market Position:
Meta Platforms has a sizable global user base with platforms like Facebook, Instagram,
WhatsApp, and Messenger. In the third quarter of 2022, there were 2.91 billion active
monthly users on Facebook. In contrast, Twitter reported 330 million monthly active users
during the same period. Because of their larger user base, Meta Platforms have a competitive
advantage and can win a sizable portion of the digital advertising market (
Zuckerberg et al,
2022).
Competitive Landscape:
Twitter and Meta Platforms are active players in the fiercely cutthroat social media sector.
Twitter has carved out a niche as a real-time news and information-sharing platform, while
Meta Platforms dominates with its sizable user base and wide platform options. Each
business attracts different user demographics and advertisers and has particular strengths.
Strategic Initiatives:
Beyond social media, Meta Platforms has concentrated on growing its business. The
company has made sizeable investments in virtual reality (VR) and augmented reality (AR)
technologies through its subsidiary Oculus. A shared virtual environment called the
metaverse, where users can interact and engage with digital content in immersive ways, is
what Meta Platforms aim to build. This strategic vision represents the long-term growth
strategy and diversification efforts of Meta Platforms.
On the other hand, Twitter has been attempting to increase user engagement, fend off false
information, and diversify its sources of income. To improve user experience and promote
monetisation, the company has added new features like Spaces (audio chat rooms) and Super
Follows (subscription-based content).
Meta Platforms continues to operate in a strong financial position because of its commanding
market position, sizable customer base, and profitability. The company has a competitive
advantage over its rivals, including Twitter, due to its variety of platforms and the size of its
6
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user base. On the other hand, Twitter has distinctive advantages and has been working to
innovate and increase its market presence (
Grabco,2022).
7
References:
Grabco, A. (2022). Valuation approaches of social networking companies: Meta Platforms’
valuation model.
Yaddanapudi, A., Chaudhary, K., & Saxena, S. (2022). Financial Analysis of Meta Platforms
Inc.
Zuckerberg, M., Saverin, E., McCollum, A., Moskovitz, D., Hughes, C., COO, J. O., ... &
Financial, N. Meta Platforms.
8
Related Questions
12.Classify the items listed (1 to 5) under the following balance sheet headings:
A- Assets
L- Liabilities
SE- Shareholders’ Equity
1-................ ....Cash
2-....................Capital
3-....................Equipment
4-....................Accounts payable 5- ....................Retained earnings
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MEERA LTD.
Comparative Statements of Financial Position
December 31
.................................................................................2017 .............................................................2016
Land
Buildings
Accumulated depreciation—buildings
Accounts receivable
£ 20,000
70,000
(15,000)
20,800
£ 26,000
70,000
(10,000)
23,400
Cash
Total
Share capital—ordinary
Retained earnings
17,660
£113,460
£ 75,000
26,090
10,700
£120,100
£ 72,000
20,000
Accounts payable
Total
12,370
£113,460
28,100
£120,100
Additional information:
1. Net income was £22,590. Dividends declared and paid were £16,500.
2. All other changes in non-current account balances had a direct effect on cash
flows, except the change in accumulated depreciation. The land was sold for
£5,000.
Instructions
(a) Prepare a statement of cash flows for 2017 using the indirect method
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Q#1 - The accrued interest is $ ……………………………………. .
Q#2 - The total invoice price is $ …………………………………… .
arrow_forward
Expenditures—Operating—Salaries..........................................
Cash................................................................................
Salaries Payable for example? Incurred salaries of $300,000 $280,000 of which was paid. Where do i put these salaries.
arrow_forward
Arrange the following items in proper balance sheet presentation (Prepare a formal Balance Sheet review page 31 for example).
Accumulated depreciation................................................ $200,000
Retained earnings............................................................. 110,000
Cash................................................................................. .... 5,000
Bonds payable................................................................. 142,000
Accounts receivable..................................................................38,000
Plant and equipment—original cost.................................. 720,000
Accounts payable........................................................................35,000
Allowance for bad debts.............................................................6,000
Common stock, $1 par, 150,000 shares outstanding...150,000…
arrow_forward
Phillips Corp. Balance Sheet
Assets
Current Assets
...
...
...
...
...
Total Current Assets
Fixed Assets
...
...
...
Total Assets
...
: : : : :
: :
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Please help with a, b, and c.
arrow_forward
3
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Priva
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PA2.) Record journal entries for the following transactions of Barrera Suppliers.
A. May 12: Sold 32 deluxe hammers at $195 each to a customer, credit terms 10/10, n/45,
invoice date May 12; the deluxe hammers cost Barrera Suppliers $88 each.
B. May 15: Customer returned 6 hammers for a full refund. The merchandise was in sellable
condition at the original cost.
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C. May 20: Customer found 2 defective hammers but kept the merchandise for an allowance
of $200.
D. May 22: Customer paid their account in full with cash.
x Content
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how.do.we.get.the.wt.of.equity.to.be.75
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Ch. 18 - Managerial Accounting - x
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2. Prepare On Company's statement of cost of goods manufactured for December.
3. Prepare On Company's income statement for December.
PR 18-5B Statement of cost of goods manufactured and income statement for a
manufacturing company
OBJ. 2, 3
V1. Cost of goods
manufactured,
$367,510
The following information is available for Shanika Company for 2014:
January 1
$ 77,350
December 31
Inventories
$ 95,550
Materials
SPREADSHEET
Work in process
109,200
96,200
9volgm
100,100
1
Finished goods
113,750
o quise nois
$ 68,250
Advertising expense
22,750
Depreciation expense-office equipment…
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Not a previously submitted question.
Thank you
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Related Questions
- 12.Classify the items listed (1 to 5) under the following balance sheet headings: A- Assets L- Liabilities SE- Shareholders’ Equity 1-................ ....Cash 2-....................Capital 3-....................Equipment 4-....................Accounts payable 5- ....................Retained earningsarrow_forwardMEERA LTD. Comparative Statements of Financial Position December 31 .................................................................................2017 .............................................................2016 Land Buildings Accumulated depreciation—buildings Accounts receivable £ 20,000 70,000 (15,000) 20,800 £ 26,000 70,000 (10,000) 23,400 Cash Total Share capital—ordinary Retained earnings 17,660 £113,460 £ 75,000 26,090 10,700 £120,100 £ 72,000 20,000 Accounts payable Total 12,370 £113,460 28,100 £120,100 Additional information: 1. Net income was £22,590. Dividends declared and paid were £16,500. 2. All other changes in non-current account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for £5,000. Instructions (a) Prepare a statement of cash flows for 2017 using the indirect methodarrow_forwardQ#1 - The accrued interest is $ ……………………………………. . Q#2 - The total invoice price is $ …………………………………… .arrow_forward
- Expenditures—Operating—Salaries.......................................... Cash................................................................................ Salaries Payable for example? Incurred salaries of $300,000 $280,000 of which was paid. Where do i put these salaries.arrow_forwardArrange the following items in proper balance sheet presentation (Prepare a formal Balance Sheet review page 31 for example). Accumulated depreciation................................................ $200,000 Retained earnings............................................................. 110,000 Cash................................................................................. .... 5,000 Bonds payable................................................................. 142,000 Accounts receivable..................................................................38,000 Plant and equipment—original cost.................................. 720,000 Accounts payable........................................................................35,000 Allowance for bad debts.............................................................6,000 Common stock, $1 par, 150,000 shares outstanding...150,000…arrow_forwardPhillips Corp. Balance Sheet Assets Current Assets ... ... ... ... ... Total Current Assets Fixed Assets ... ... ... Total Assets ... : : : : : : :arrow_forward
- Please help with a, b, and c.arrow_forward3arrow_forwardm AA Priva × system er... G governm... cv.blackboard.com G administr... Departm... BUS 241 - Principles Of Accounting I (20953) G reese rd e... Mastery Assignment Instructions đất 14K, thiIZAKIKAI AN XƯA KHI t shit & Jour 1841 Altith stAR/HA SIER Vô Blllt 4HKK they should balance. PA2.) Record journal entries for the following transactions of Barrera Suppliers. A. May 12: Sold 32 deluxe hammers at $195 each to a customer, credit terms 10/10, n/45, invoice date May 12; the deluxe hammers cost Barrera Suppliers $88 each. B. May 15: Customer returned 6 hammers for a full refund. The merchandise was in sellable condition at the original cost. Û + O C. May 20: Customer found 2 defective hammers but kept the merchandise for an allowance of $200. D. May 22: Customer paid their account in full with cash. x Contentarrow_forward
- how.do.we.get.the.wt.of.equity.to.be.75arrow_forwardCh. 18 - Managerial Accounting - x Bb 2193514 + i learn-us-east-1-prod-fleet02-xythos.content.blackboardcdn.com/5f7ce11c673e5/2193514?X-Blackboard-Expiration=1648004400000&X-Blackboard-Signature=DUHfBVC7kn6FU8gu... * O w WordCounter - Co... y! Yahoo A Regions Bank | Che.. Welcome, Justin – B. * eBooks, Textbooks... O Jefferson State Co... Electronics, Cars, Fa... C Home | Chegg.com 2193514 1 / 1 100% + | 2. Prepare On Company's statement of cost of goods manufactured for December. 3. Prepare On Company's income statement for December. PR 18-5B Statement of cost of goods manufactured and income statement for a manufacturing company OBJ. 2, 3 V1. Cost of goods manufactured, $367,510 The following information is available for Shanika Company for 2014: January 1 $ 77,350 December 31 Inventories $ 95,550 Materials SPREADSHEET Work in process 109,200 96,200 9volgm 100,100 1 Finished goods 113,750 o quise nois $ 68,250 Advertising expense 22,750 Depreciation expense-office equipment…arrow_forwardNot a previously submitted question. Thank youarrow_forward
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