Fundamental Analysis
Founded in 2004, Facebook’s mission is to give people the power to build community and bring the world closer together. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.
High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
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- Here we see FACEBOOK makes a margin of 45% on Gross Level and about 42% on Net level This means that out of $1 that it makes $0.4 is being pocketed as profits.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
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- Here we see FACEBOOK grew at an astronomous rate of 50% in the revenue and the net profit figures grew by 60%.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
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- Here we see FACEBOOK makes a Return on Assets of 22% and Return of Equity of 26% which is pretty good.
Here we see that FACEBOOK scores high on each and every one of the parameters that we have selected when compared to our reasonable barriers that we have kept.
GOLD STANDARD : This is one of the no-debate stocks that are a must have in ones portfolio.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by FACEBOOK to the SEC. All the data on the above analysis can be found at the link below
Balance Sheet
Income Statement
