Facebook Analysis 1

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Analyzing the earnings per share we can see that twitter has an earnings per share

of 0.28 well below Facebook that is by 10.22 this means that at the level of
profitability Facebook is in a higher position for shareholders, because we know
that earnings per share are the most important single variable to determine the
price of a share. And by the way calculate the valuation ratio of price to earnings
and Facebook is in a superior position to twitter.
The net income of Facebook and twitter have a huge difference where you can see
that Facebook is in a position where it can be used to pay a dividend to
shareholders or can be reinvested in the company so that it remains the leader in
social networking.
Moving on to earnings, Facebook's earnings are triple compared to twitter's and
these earnings are needed to grow and to reward shareholders who provide the
capital to generate them. However, earnings are not everything, for that there is
also the free cash flow Facebook has a cash flow of 23,632,000,000, a fairly high
amount that will improve the value for shareholders, through the development of
new products, making acquisitions, paying dividends and reducing debts.
Another indicator to analyze is the debt ratio Facebook is at a ratio of 0.24 while
twitter is at a ratio of 0.35, at a glance you can tell that Facebook is in a good
position because as we know a value higher than 0.6 represents a warning sign, it
indicates that the company is indebted above what is due with respect to its net
capital, but the value of Facebook is at a value below 0.4 which indicates that the
company is not using its own resources optimally.
The operating margin is the measure of a company's efficiency. The higher the
operating margin, the more profitable a company's core business will be, Facebook
has a much higher operating margin than twitter, therefore it has a larger measure
of its efficiency.

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