statements for the year ended Dec 3 A). Uber showed a loss of $570 million on sales of 17.455 billion. Some = to blame Covid-19 for this loss, but others pointed to bigger long-term is investors that Uber has consistently lost money over the past few years, = Moss of $8.5 billion on sales of 13.0 billion in 2019 (a year before Covid, all before-times). For simplicity purposed, assume the following cost structure: ● Cost of Revenues and Operations & Support expenses are all variab Sales and Marketing, R+D, General + Administrative, and Deprecia Amortization expenses are all fixed. Interest Fynenco Othon
statements for the year ended Dec 3 A). Uber showed a loss of $570 million on sales of 17.455 billion. Some = to blame Covid-19 for this loss, but others pointed to bigger long-term is investors that Uber has consistently lost money over the past few years, = Moss of $8.5 billion on sales of 13.0 billion in 2019 (a year before Covid, all before-times). For simplicity purposed, assume the following cost structure: ● Cost of Revenues and Operations & Support expenses are all variab Sales and Marketing, R+D, General + Administrative, and Deprecia Amortization expenses are all fixed. Interest Fynenco Othon
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Recently, Uber released its financial statements for the year ended Dec 31 2021 (Appendix
A). Uber showed a loss of $570 million on sales of 17.455 billion. Some analysts are quick
to blame Covid-19 for this loss, but others pointed to bigger long-term issues and reminded
investors that Uber has consistently lost money over the past few years, and generated a
loss of $8.5 billion on sales of 13.0 billion in 2019 (a year before Covid, also known as the-
before-times).
For simplicity purposed, assume the following cost structure:
Cost of Revenues and Operations & Support expenses are all variable
Sales and Marketing , R+D, General + Administrative, and Depreciation +
Amortization expenses are all fixed.
Interest Expense, Other income (expense), and tax and loss from equity method can
be ignored for this analysis
1. Based on the financial information in Appendix A, how much would revenues have
to have been in 2021 in order for Uber to break even?
2. What level of Revenue would Uber need to have reached in 2021 to make a profit of
$2 billion.
3. What percentage increase would Contribution Margin need to increase in order for
Uber to break-even on Revenues of $19 billion (assuming that fixed costs do not
change)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6136fa1d-cf6a-4717-8e96-2b8d371973c3%2F630f97cc-9db1-4efa-88a1-307b265091ed%2Fuowdvjrh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Recently, Uber released its financial statements for the year ended Dec 31 2021 (Appendix
A). Uber showed a loss of $570 million on sales of 17.455 billion. Some analysts are quick
to blame Covid-19 for this loss, but others pointed to bigger long-term issues and reminded
investors that Uber has consistently lost money over the past few years, and generated a
loss of $8.5 billion on sales of 13.0 billion in 2019 (a year before Covid, also known as the-
before-times).
For simplicity purposed, assume the following cost structure:
Cost of Revenues and Operations & Support expenses are all variable
Sales and Marketing , R+D, General + Administrative, and Depreciation +
Amortization expenses are all fixed.
Interest Expense, Other income (expense), and tax and loss from equity method can
be ignored for this analysis
1. Based on the financial information in Appendix A, how much would revenues have
to have been in 2021 in order for Uber to break even?
2. What level of Revenue would Uber need to have reached in 2021 to make a profit of
$2 billion.
3. What percentage increase would Contribution Margin need to increase in order for
Uber to break-even on Revenues of $19 billion (assuming that fixed costs do not
change)?
![UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share amounts which are reflected in thousands, and per share amounts)
(Unaudited)
Three Months Ended December 31, Year Ended December 31,
2021
2020
2021
2020
3,165 $
5,778 $
11,139 $
17,455
Revenue
Costs and expenses
Cost of revenue, exclusive of
depreciation and amortization
shown separately below
Operations and support
Sales and marketing
Research and development
General and administrative
Depreciation and amortization
Total costs and expenses
Loss from operations
Interest expense
Other income (expense), net
Income (loss) before income
taxes and loss from equity
method inyestments
Provision for (benefit from)
1,441
3,104
5,154
9,351
369
547
1,819
1,877
1,038
1,262
3,583
4,789
483
558
2,205
2,054
531
611
2,666
2,316
180
246
575
902
4,042
6,328
16,002
21,289
(877)
"(118)
63
(550)
(4,863)
(3,834)
(130)
(458)
(483)
1,471
(1,625)
3,292
(932)
791
(6,946)
(1,025)
income taxes
23
(97)
(192)
Loss from equity method
investments
(492)
Net income (loss) including
(7)
(9)
(34)
(37)
non-controlling interests
(962)
879
(6 788)
Less: net income (loss)
%24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6136fa1d-cf6a-4717-8e96-2b8d371973c3%2F630f97cc-9db1-4efa-88a1-307b265091ed%2Fib0ecdi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share amounts which are reflected in thousands, and per share amounts)
(Unaudited)
Three Months Ended December 31, Year Ended December 31,
2021
2020
2021
2020
3,165 $
5,778 $
11,139 $
17,455
Revenue
Costs and expenses
Cost of revenue, exclusive of
depreciation and amortization
shown separately below
Operations and support
Sales and marketing
Research and development
General and administrative
Depreciation and amortization
Total costs and expenses
Loss from operations
Interest expense
Other income (expense), net
Income (loss) before income
taxes and loss from equity
method inyestments
Provision for (benefit from)
1,441
3,104
5,154
9,351
369
547
1,819
1,877
1,038
1,262
3,583
4,789
483
558
2,205
2,054
531
611
2,666
2,316
180
246
575
902
4,042
6,328
16,002
21,289
(877)
"(118)
63
(550)
(4,863)
(3,834)
(130)
(458)
(483)
1,471
(1,625)
3,292
(932)
791
(6,946)
(1,025)
income taxes
23
(97)
(192)
Loss from equity method
investments
(492)
Net income (loss) including
(7)
(9)
(34)
(37)
non-controlling interests
(962)
879
(6 788)
Less: net income (loss)
%24
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