FSA Appendix 2
FSA Appendix 2
Change in Allowance 1 16 5
Difference 2193
Appendix 3: Direct Cashflow Facebook
Allowance for Bad debts for Facebook
2014 2013
Net Return on Assets = Net Income + After Tax = 14,444 0.108493 12,920 0.11648
Total Assets 133,133 110,920
46,039 6.916917
6,656
365 52.769174
6.91692
17,176 63.6148148
270
365 5.7376572
64
15,435 12.011284
1,285
365 30.3880916
12.0113
63.6148148
52.769174
30.3880916
85.99590
0
52.7692
30.388
22.38108
60,454 4.21664225
14,337
59,949 4.18141871
14,337
48,088 3.35411871
14,337
22,083 0.30792721
71,715
28,863 0.626925
46,039
10,737 0.23321532
46,039
14,469 0.31427703
46,039
10,737 0.11425014
93,978
14,469 0.15396157
93,978
10,737 0.14971763
71,715
46,039 0.4898913
93,978
10,737 0.74206925
14,469
14,469 1.045901
13,834
13,834 0.300484
46,039
46,039 0.4898913
93,978
93,978 1.310437
71,715
0.1497176
10,737 15.775258
680.62
761.98 48.3022211
15.7753
518,620.95 85.2574301
6,083
518,620.95 31.2065
16,619
Appendix 6: Ratios For Facebook
Ratios
2014 2013
Net Return on Assets = Net Income + After Tax = 2,940 0.073163 1,500 0.08382
Total Assets 40,184 17,895
5,089 8.039494
633
365 45.400865
8.03949
1,364 0.0000
-
365 0
-
1,364 21.3125
64
365 17.126099707
21.3125
0
45.400865
17.126099707
28.27476
13,070 12.423954373
1,052
13,070 12.423954373
1,052
9,626 9.1501901141
1,052
3,348 0.2848149724
11,755
3,725 0.7319709177
5,089
53 0.0104146198
5,089
538 0.1057182158
5,089
53 0.0035092366
15,103
538 0.0356220618
15,103
53 0.0045087197
11,755
5,089 0.3369529
15,103
53 0.1072874494
494
494 0.918216
538
538 0.105718
5,089
5,089 0.3369529
15,103
15,103 1.284815
11,755
0.00450872
53 0.018949516
2,796.91
$108.37 5718.6293633
0.0189
303,100.62 216.6551947
1,399
303,100.62 188.0277
1,612
Appendix 6: Z-Score Google
Z- score
0.76310413
0.15396157
3.24752072
0.48989125
4.60319822
Appendix 7: Z-Score Facebook
Z- score
0.10984573
0.03562206
3.51105137
0.33695292
3.66946675
Appendix 8: Decomposing Cost in Fixed and Variable Cost
Quarterly Data of Sales of Google to figure out the fixed cost and variable cost using re
Interest Income
Total Cost
Financial Leverage Revenue - (TVC+ other cost)
Revenue
d and Variable Cost
and variable cost using regression
SS MS F Significance F
321663789.932 321663789.93 4212.4595347 1.0955916E-25
1603561.89368 76360.090175
323267351.826
Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Upper 95.0%
180.982995604 8.7615702667 1.85999E-08 1209.3204897 1962.06998 1209.32049 1962.06998 2040.74988
0.01876240184 64.903463195 1.095592E-25 1.1787263066 1.25676341 1.17872631 1.25676341 3.2558109
Total Cost
Total Fixed Cost
Total Variable Cost
Operating Leverage Revenue - TVC
Revenue
Interest expense
Total Cost
Financial Leverage Revenue - (TVC+ other cost)
Revenue
and Variable Cost
and variable cost using regression
SS MS F Significance F
31298366.6222 31298366.6 168.207171 1.71529E-11
3907477.29087 186070.347
35205843.913
Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
155.752173828 1.47071775 0.15619344 -94.8368907 552.971863 -94.8368907 552.971863
0.10332432056 12.9694707 1.71529E-11 1.12518706 1.55493644 1.12518706 1.55493644
84 50 44
6471.7 4101.7 3590.7
48.002% 47.895% 29.441%
Appendix 10: Calculation of The Risk of
Daily returns of Google since IPO compared with sector and m
SUMMARY OUTPUT
XLKe GOOGLe
-0.00217198 0.07241143 Regression Statistics
0.00735758 0.01259805 Multiple R 0.277890962322198
-0.00669451 -0.04276869 R Square 0.077223386940357
0.00446354 0.00397859 Adjusted R Square 0.076898694254552
-0.00530223 0.01801893 Standard Error 0.016196896506906
0.0011141 -0.01946014 Observations 2844
-0.00183016 -0.0307466
-0.00900081 -0.0017184 ANOVA
0.00564495 -0.02259922 df
0.00043345 0.00124984 Regression 1
-0.01756131 -0.01069084 Residual 2842
-0.00228278 0.00909822 Total 2843
0.00355555 0.00956892
0.01591779 0.00098615 Coefficients
0.01176585 0.02436166 Intercept 0.000726777768882
0.0014076 0.01732914 XLKe 0.884717799511311
0.00211303 0.03508866
-0.00841292 0.01214094 Total risk 0.0413089%
-0.00091884 0.01457504 systematic risk 0.0129510%
0.00254429 0.02663383 unsystematic 0.0283578%
0.00964412 0.02192604
-0.00073539 -0.01709122 Shares outstanding A 286,938,352
-0.00401252 0.01706469 Share price of A 772.99
0.0079993 0.02599041 Shares outstanding B 53,018,898
-0.01296048 -0.01279073 Share price (estimated) of B 768
-0.00259159 -0.00673185 Shares outstanding C 340,665,532
-0.00212591 0.06793547 Share price of C 763.25
0.0055777 0.02823291 Market Value of Equity 522,538,319,943
0.00438991 -0.01057576 Book Value of Debt 2,663,300,000
0.00819333 0.00608274 Levarage 0.509685%
0.00649148 0.01703395 Beta unleveraged 0.889814650590652
0.0065579 0.02398036
-0.00031536 -0.0161708 Cost of Debt (according to morningstar)
0.00024116 0.02363759 2.125%
-0.0058415 0.00021926 Current Tax Rate 2014
-0.00101792 -0.02202205 19.30%
0.00134378 0.01971619
0.00521708 0.03427075 Cost of Debt after tax (Kd)
0.00036866 0.01587575 1.7149%
0.00060424 0.00925544
0.0065078 0.03126763 Cost of Equity = Risk Free Rate + Beta Equity (Average Market Return - Risk F
0.00841693 0.00023778 Risk Free Rate (according to bloomberg)
0.00351344 -0.04837141 Average Market Return (from yahoo finance)
0.00212354 0.05676371 Beta
-0.01042554 0.16554143 Cost of Equity (ke)
-0.00036291 0.08799975
-0.01322923 -0.0451748 WACC = (1 - Tax Rate) x kd (D/D+E) + ke (E/D+E)
0.01217574 0.01092372
-0.00049946 0.0364029 Debt 26633
0.00067784 -0.01358429 Equity 104500
0.00527755 0.02553457 Total 131133
0.00113861 -0.00626987 WACC
-0.00713449 -0.02901477
-0.00230217 -0.0500192
0.00252143 -0.08937106
0.00290095 0.02034528
0.00148088 -0.02034837
-0.00946993 -0.00574937
0.00506793 0.08270464
0.00607172 -0.0134639
0.00324107 0.01331227
-0.00039518 -0.0595363
0.0054794 -0.00617011
0.00241369 -0.03010298
-0.00434716 0.02221856
-0.00334135 -0.03015298
-0.00580328 0.01313213
0.00574495 0.04084909
-0.00066062 0.02725336
0.00503693 0.01381644
-0.00636633 0.0044575
0.00912917 -0.02246666
0.00196369 -0.00395053
0.00765699 0.00624461
0.00449817 -0.0224473
-0.00404653 -0.01825693
-0.00677628 -0.01430068
-0.00400294 0.01676083
-0.00614916 -0.01127018
0.0030328 -0.01570631
-0.00163143 0.04485338
-0.00074506 0.00535492
-0.00359336 -0.01783237
0.00182707 0.02712663
-0.00597632 0.0271811
0.00333577 -0.01456469
-0.00051037 0.01146861
0.00162276 0.0078425
-0.00407355 0.02341125
-0.00024574 -0.0010471
-0.00148539 -0.00075912
0.00236822 0.02626021
0.00025522 -0.02219572
-0.00381097 0.05617076
-0.00641407 -0.02828174
0.00349256 0.00181062
-0.00801541 -0.03071606
0.00339312 0.02954247
-0.00472811 0.00151391
-0.0028892 -0.00090176
0.00213205 0.00620704
-0.00181107 0.00775613
-0.00229505 0.01848362
0.00047783 0.00925025
-0.01057434 -0.02190589
-0.00090611 -0.01104089
-0.00091821 -0.02295656
-0.00614002 -0.03818348
-0.00129831 -0.02275161
0.00720945 0.06543349
-0.00271606 -0.00783574
0 0.01201619
0.00086133 0.02152338
-0.00032321 -0.02536379
-0.00252852 0.07023977
-0.0038846 0.02639024
0.00639234 -0.04150208
-0.00163062 -0.03943056
0.00378444 0.0121483
-0.00975442 -0.02805476
-0.00159911 -0.02239517
0.00090282 -0.01168741
0.00272728 0.03057443
0.00121679 0.00787794
-0.0041053 0.01562801
-0.0082112 0.00551473
-0.00333883 -0.00107811
0.00933521 -0.0183724
-0.01020188 0.0063148
0.0020114 -0.03270277
-0.0033576 -0.02588503
0.00358969 0.01799397
0.00705613 -0.01524044
-0.00198158 -0.00423473
-0.00786052 0.00946971
-0.00595341 -0.01839232
0.0069664 0.01516474
-0.00464054 -0.01537355
0.00912738 -0.00967076
0.00225461 -0.00978646
-0.00589234 -0.00510154
-0.00220765 -0.02203406
-0.00176007 0.02894172
-0.00162633 -0.00836212
-0.00252571 0.01899883
-0.00265465 0.00715216
0.00371185 0.00837753
0.00142046 -0.00244421
0.00329399 0.00127227
-0.00068001 0.00031187
-0.00041884 0.0106548
-0.00108684 -0.0035483
0.00091332 -0.00925873
0.00339764 0.00219407
-0.00419821 0.00188921
0.001907 0.02745712
-0.00270519 0.01294121
-0.00500744 -2.204E-05
0.00795759 0.01859709
0.00330343 0.00157374
-0.00637785 0.00538155
0.0009947 -0.00138761
-0.00249137 0.00648398
-0.00093164 0.00537239
-0.016453 -0.01969709
-0.00198323 0.00758259
0.00449149 0.01574599
0.00486903 0.04895544
0.0075342 0.01147348
-0.00828066 0.06054528
0.00033149 0.02919613
0.00285357 -0.01167039
-0.00018689 0.00080231
0.00247972 0.01103635
-0.00448182 -0.01106644
-0.00667544 0.00479362
0.0051783 0.01582644
-0.00086934 0.00249383
-0.00122945 -0.00631161
0.00577053 0.00773196
-0.00205266 -0.01500569
-5.6403E-05 0.01823014
-0.00075449 0.00983164
0.01205025 -0.00010851
0.01453588 0.00425711
-3.5361E-05 -0.00143723
-0.00309573 0.00232428
0.00398756 0.01557457
0.00132131 -0.00412549
0.00292511 0.0115848
-0.00204583 0.05174179
0.00731276 0.00449068
-0.00370234 0.01954219
0.00607739 -0.01153272
-0.00314089 0.02456857
2.51484E-06 0.04877171
0.00137379 0.03016171
0.0022584 -0.00250491
-0.00569603 -0.02148564
-0.00056603 0.03902306
-0.00470618 0.00674326
0.00381744 -0.04442964
0.00020187 0.01939148
-0.00310002 -0.01098315
0.00080488 -0.0022764
-0.00824811 -0.0178836
0.00405835 -0.01465674
-0.00058477 0.00704685
-0.00321234 0.00660339
-0.00180741 0.02250305
0.00386346 0.00339968
0.0011414 0.00424902
0.0062228 0.01548325
-0.00500993 0.03336789
-0.00943275 0.02161573
0.00421434 -0.01529834
0.00415744 -0.0280651
-0.0040237 0.01030947
-0.00042672 -0.01279561
-0.00152163 0.0072819
0.00589476 -0.00578686
-0.0019386 0.00985611
0.00649793 -0.0090868
0.00515845 -0.01483261
0.00270006 -0.00797618
0.00294271 0.02287432
0.00470839 0.00287188
9.42735E-05 0.0015666
-0.00171725 -0.00148933
0.00934932 0.02911026
-0.00671291 0.00336228
-0.00078655 0.01205079
-0.00906171 -0.04344056
-0.00241496 -0.01882695
0.00645624 -0.00040638
0.00301497 -0.00081147
-0.00582815 -0.01785256
0.00146445 -0.01289417
0.00120233 0.0141065
0.00398698 0.020009
0.00392905 -0.00896996
-0.00132353 0.00946427
0.00443221 -0.01128048
-0.0061623 -0.00189091
0.00158923 -0.00493473
-0.01086122 -0.01971467
0.00367874 -0.00967871
-0.00715101 0.02609918
-0.00088492 -0.02591912
0.00343342 0.01881269
0.00877739 -0.00184365
-0.00662316 -0.01784163
-0.00132713 -0.00225589
0.00192672 -0.02139289
0.00139735 0.02220582
0.00266381 0.01961155
-0.00314777 -0.00356104
0.00343961 0.01032939
-0.00090515 0.00947207
0.00525926 0.00116843
-0.00733557 -0.01706031
-0.00166391 0.00160835
-0.00108853 0.00948168
-0.00012359 -0.01634094
-0.00169771 0.02533023
0.00569218 0.00507233
-0.00795591 0.00361895
0.00438174 0.03761448
0.00649673 0.01181218
-0.00677768 -0.02421003
-0.00190535 -0.00076725
-0.00087599 -0.01510778
-0.00478307 0.01527858
0.00460471 0.02201112
-0.00271935 0.02229875
0.00034992 -0.00525563
-0.00033777 0.01199024
-0.00261123 -0.0045775
-0.00316132 -0.00083508
0.0053636 -0.02627873
-0.0003698 0.00369328
0.00364573 0.01899367
0.00214071 0.01059112
0.00215209 -0.0128433
-0.00090654 0.01218422
-0.00768559 0.01015997
-0.00095951 -0.00267217
0.0015169 0.00096784
-0.00604045 -0.01321337
0.00132664 -0.00890648
0.00767004 -0.01113302
-0.00654543 -0.01493008
-0.00470734 0.02621049
0.0088294 0.00519102
-0.00410419 0.0012357
0.01018979 -0.00020097
0.00207584 0.11713295
-0.00260095 0.01025144
-0.00485197 -0.00298999
0.00045913 0.027512
-0.00023029 0.00394328
-0.00490419 7.88343E-05
0.00763639 0.03624927
-0.00495567 0.0164583
0.00082834 -0.00966657
0.00494773 0.01224289
0.00563548 0.0129163
0.0009321 0.01079909
0.00047781 -0.01298627
-0.00226414 -0.02888025
0.00084217 0.02375585
-0.00103564 -0.00519504
0.00151129 0.01739448
0.00033158 -0.00686639
0.00176294 0.01159158
0.00249105 0.00399904
0.00166829 -0.01196199
-0.00549876 0.01782808
0.0022056 0.0130747
-0.00024488 0.00956346
0.00196518 0.01283429
0.00341969 -0.00491265
0.00110914 -0.04597691
0.00217884 0.00878787
0.00499396 0.01246516
-0.00217038 0.0074551
-0.002867 -0.02624121
-0.00052676 -0.00512381
0.00401183 0.00504403
-0.00667137 0.01654169
0.00106078 -0.0061501
0.0017999 0.0073835
-0.0100004 0.00502604
-0.00255188 -0.00040632
-0.001226 0.01146373
0.0017371 0.0212044
-0.00690975 -0.00775839
-0.00470869 0.0111509
-0.00064733 -0.00952441
-0.00053097 0.00815647
0.00132092 -0.00312174
0.00176158 -0.00441962
-0.00458896 0.00259604
-0.00121776 -0.01087401
-0.00122227 -0.00715905
0.00202828 0.03151198
0.00699595 0.01826369
0.00400984 0.01284757
0.00737554 0.02363475
0.00061253 9.35802E-05
-0.00191571 0.00511609
0.00634306 0.00079993
-0.00144691 -0.01301851
0.00048006 0.0065828
-0.00722135 0.00456439
-0.00789261 -0.04355216
0.0049425 -0.0228486
-0.00786183 -0.06651488
-0.0073334 0.06662247
0.00227506 0.03529918
0.00242335 -0.02350878
0.00103692 -0.00259356
0.00191336 -0.01106116
0.00400229 -0.01460883
-0.0009459 0.02100122
-0.00096185 -0.07835284
-0.00220054 -0.00268121
-0.00203495 -0.03162259
-0.00543306 0.00669063
0.0060192 -0.03576509
0.0102911 -0.00593223
-0.00297759 -0.02627582
0.00609857 0.00888388
-0.00742594 -0.04481803
0.00292569 -0.01748499
0.00199983 -0.00626047
0.00166495 0.06284284
-0.00273225 0.00895885
-0.00845969 -0.00337336
-0.00099911 -0.00907114
-0.00357598 0.03588927
-0.00209551 -0.00432868
0.00883012 0.03400687
-0.00191445 -0.06160917
0.01097116 -0.00287845
0.00234173 0.03201254
-0.00123607 0.00923388
0.00049124 -0.0220719
-0.00482935 -0.00835531
-0.00302863 -0.03111246
0.00072926 -0.02403867
-0.00487383 -0.02553417
0.00181678 -0.00317011
0.00098905 0.03135344
0.00144037 -0.02342107
-0.00837685 -0.01869772
0.0023409 0.00217581
0.00341675 0.02632883
0.00222472 -0.01746351
-0.00564289 -0.00521368
-0.00019459 0.00697956
0.00241026 0.06916612
0.00281734 0.01209342
-0.00514907 0.02646724
0.00882079 0.04086842
0.00492196 -0.01478899
-0.00606864 0.003785
0.00664208 9.99779E-07
-0.00280566 0.03116947
0.00505446 0.00558039
0.00018132 0.00888747
-0.00138255 -0.00204607
-0.00289177 0.02361855
-0.00051824 -0.00766061
-5.0042E-05 -0.00359882
0.00267835 -0.0152845
-0.01047122 0.01197595
0.00427236 -0.02219756
-0.00280957 0.01357307
-0.00047703 0.00958757
-0.01091476 0.0531006
0.00047002 0.00960845
0.00367109 -0.02615876
0.00340294 -0.00301595
0.00512338 -0.01877591
-0.02441534 -0.00833388
-9.9188E-05 -0.03741804
-0.00290073 -0.01779367
0.00143291 0.00213397
9.24143E-05 -0.0021194
-0.00332609 -0.00997066
0.002576 0.0024247
-0.00606452 0.03354914
-0.00999381 -0.01370898
-0.00873341 -0.02758363
0.00361545 -0.02019752
-0.00105839 0.00352115
-0.00805663 -0.01155771
0.00556255 0.02764236
0.001634 -0.00432719
0.00028323 -0.0096663
-0.00110606 0.01014511
0.00026545 0.02009268
0.00187758 0.00710755
-0.00308237 -0.00780041
-0.00024858 -0.00937094
-0.00198972 -0.00691571
-0.00725039 -0.01150425
0.0075638 0.01947843
-0.00546614 -0.01040852
-0.00039495 0.0013963
0.00243869 0.04396733
-0.00623395 -0.00143175
-0.0040962 0.01844142
-0.00081506 -0.01393067
-0.0077061 -0.00216233
0.01263581 0.02466617
-0.00111591 -0.01326256
0.00414039 -0.00401855
0.00580343 0.00651981
0.00340433 0.0013097
-0.00488866 -0.00589523
0.00554061 0.03122533
-0.00740553 -0.0010214
-0.00282583 0.01243713
-0.00242279 -0.00600051
-0.00481232 0.00394019
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5.81765E-05 -0.00627003
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0.00056909 -4.4327E-05
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3.57854E-05 -0.01290416
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0.00332033 0.0061669
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0.00564824 -0.00299069
0.01694643 0.04510606
-0.00142098 0.01884791
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0.00359894 -0.0057798
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-0.00229007 -0.00570562
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0.00232312 -0.00145501
0.0041626 0.01170013
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0.0039179 0.00174604
-0.00036628 0.00036361
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0.00347316 0.01315015
0.00524427 0.00256487
-0.00843858 -0.01052897
0.00013418 -0.00122175
0.0009619 -0.00518722
-0.00076027 0.00294148
0.0054411 0.00077021
0.00364843 0.01880495
-0.00473582 0.0007605
-0.00111163 -0.01044188
-0.00304214 -0.00033745
0.00113603 0.00237629
0.00529021 -0.00766239
-0.00066395 0.01791407
0.00389165 0.00262646
0.0010688 0.00159683
0.00509479 -0.0051707
SS MS F Significance F
0.06239358705 0.06239359 237.835314 1.3540928E-51
0.74556873525 0.00026234
0.80796232229
Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
0.00030373773 2.39278067 0.01678579 0.0001312091 0.0013223464 0.0001312091 0.0013223464
0.05736758859 15.4219102 1.35409E-51 0.7722314861 0.9972041129 0.7722314861 0.9972041129
0.2
0.15
0.1
0.05
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61
-0.05
-0.1
y (Average Market Return - Risk Free Rate)
2.740%
14%
0.88471779951
12.941%
10.66%
Daily returns between Google Vs Sector
7 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 109 111 113 115 117 119 121 123 125 127 129
Google SPY
Vs Sector
109 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 169 171 173 175 177 179 181 183 185 187 189 1
69 171 173 175 177 179 181 183 185 187 189 191 193 195 197 199 201
Appendix 11: Calculation of The Risk of the stock (Beta)
Monthly returns of Google since IPO compared with sector and market to get the risk using beta
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.41831023730556
R Square 0.17498345463464
Adjusted R Square 0.16799178899595
Standard Error 0.06693901496433
Observations 120
ANOVA
df SS MS F Significance F
Regression 1 0.11214372 0.11214372 25.0274346 1.99164E-06
Residual 118 0.52873814 0.00448083
Total 119 0.64088187
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0%
Intercept 0.0052069318681 0.00613339 0.8489489 0.39762871 -0.00693884 0.01735271 -0.00693884
XLKe 1.49298172586334 0.29843264 5.00274271 1.99164E-06 0.90200385 2.08395961 0.90200385
Cost of Equity = Risk Free Rate + Beta Equity (Average Market Return - Risk Free Rate)
Risk Free Rate (according to bloomberg) 2.740%
Average Market Return (from yahoo finance) 14%
Beta 1.49298173
Cost of Equity (ke) 19.954%
Debt 26633
Equity 104500
Total 131133
WACC 16.25%
Upper 95.0%
0.01735271
2.08395961
Appendix 12: Calculation of The Risk of the stock (Beta)
Daily returns of Facebook since IPO compared with sector and market to get the risk using beta
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.13413536828949
R Square 0.01799229702616
Adjusted R Square 0.01688891758461
Standard Error 0.02572506746771
Observations 892
ANOVA
df SS MS F Significance F
Regression 1 0.01079132492 0.01079132 16.3065364 5.85219E-05
Residual 890 0.58898339563 0.00066178
Total 891 0.59977472056
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0%
Intercept 0.00085050671571 0.00086133978 0.98742301 0.32370367 -0.00083999 0.002541 -0.00083999
XLKe 0.91908593590512 0.22760157254 4.03813526 5.85219E-05 0.47238757 1.3657843 0.47238757
-0.02
0.02
Levarage 1.3840% 0
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 5
Beta unleveraged 0.9329256811807
-0.02
Cost of Equity = Risk Free Rate + Beta Equity (Average Market Return - Risk Free Rate)
Risk Free Rate (according to bloomberg) 2.740%
Average Market Return (from yahoo finance) 14%
Beta 0.91908593591
Cost of Equity (ke) 13.337%
Debt 4088
Equity 36096
Total 40184
WACC 12.29%
Upper 95.0%
0.002541
1.3657843
34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100 103 106 109 112 115 118 121 124 127 130 133 136 139 142 145 148 151 154 157 160 163 166 169 172
34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100 103 106 109 112 115 118 121 124 127 130 133 136 139 142 145 148 151 154 157 160 163 166 169 172
Facebook SPY
148 151 154 157 160 163 166 169 172 175 178 181 184 187 190 193 196 199
148 151 154 157 160 163 166 169 172 175 178 181 184 187 190 193 196 199
Appendix 13: Calculation of The Risk of
Monthly returns of Facebook since IPO compared with sector an
Debt 4088
Equity 36096
Total 40184
WACC
SS MS F Significance F
0.00560243829 0.00560244 0.33091234 0.56834438
0.67721115928 0.01693028
0.68281359757
Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
0.02007859614 1.26599496 0.21283875 -0.01516095 0.06599976 -0.01516095 0.06599976
1.33310797295 -0.57524981 0.56834438 -3.46118182 1.92744161 -3.46118182 1.92744161
ty (Average Market Return - Risk Free Rate)
2.740%
14%
-0.7668701075
-6.102%
-5.17%
Appendix 14: Growth of Google
Growth of Google's Sales and Total Assets
Dividend 0% 0%
46039 21.45891%
37905
93978 29.24463%
72754
0%
14.97176%
14.97176%
17.60799%
Appendix 15: Growth of Facebook
Growth of Facebook's Sales and Total Assets
Dividend 0% 0%
37.133%
138.556%
0%
0.45087%
0.45087%
0.45291%
Appendix 16: Data For Forecasting - Google
Data Collected for Forecasting of Google - Sales, Research & Developme
Sales R&D
2,015 Q1 17258 2,015
Q2 17727
Q3 18675
2014 Q1 15420 2014
Q2 15955
Q3 16523
Q4 18103
2013 Q1 12951 2013
Q2 13107
Q3 13754
Q4 15707
2012 Q1 10645 2012
Q2 10964
Q3 11526
Q4 12905
2011 Q1 8575 2011
Q2 9026
Q3 9720
Q4 10584
2010 Q1 6775 2010
Q2 6820
Q3 7286
Q4 8440
2009 Q1 5509 2009
Q2 5522.9
Q3 5944.9
Q4 6673.8
2008 Q1 5186.1 2008
Q2 5367.2
Q3 5541.4
Q4 5700.9
2007 Q1 3663.9 2007
Q2 3871.9
Q3 4231.3
Q4 4826.7
2006 Q1 2253.7 2006
Q2 2455.9
Q3 2869.7
Q4 3205.5
a For Forecasting - Google
e - Sales, Research & Development and Earnings
Earnings
Q1 2753 2,015 Q1 3586
Q2 2789 Q2 3931
Q3 3230 Q3 3979
Q1 2126 2014 Q1 3452
Q2 2238 Q2 3422
Q3 2655 Q3 2813
Q4 2813 Q4 4757
Q1 1617 2013 Q1 3346
Q2 1766 Q2 3228
Q3 1821 Q3 2970
Q4 1933 Q4 3376
Q1 1441 2012 Q1 2890
Q2 1538 Q2 2785
Q3 1879 Q3 2176
Q4 1935 Q4 2886
Q1 1226 2011 Q1 1798
Q2 1234 Q2 2505
Q3 1404 Q3 2729
Q4 1298 Q4 2705
Q1 818 2010 Q1 1955
Q2 898 Q2 1840
Q3 994 Q3 2167
Q4 1051 Q4 2543
Q1 641.6 2009 Q1 1422.8
Q2 707.6 Q2 1484.6
Q3 757.5 Q3 1639
Q4 736.2 Q4 1974.1
Q1 673.1 2008 Q1 1307.1
Q2 682.2 Q2 1247.5
Q3 704.6 Q3 1289.9
Q4 733.3 Q4 382.4
Q1 408.4 2007 Q1 1002.1
Q2 532.1 Q2 925.1
Q3 584.7 Q3 1069.9
Q4 630.7 Q4 1206.5
Q1 246.6 2006 Q1 592.2
Q2 282.5 Q2 721
Q3 312.6 Q3 733.3
Q4 386.8 Q4 1030.7
Appendix 17: Sales Forecast using 3 Moving A
Sales Forecasted using 3 Moving average
Sales Forecast
Period Sales Forecast
1 2253.7
2 2455.9
3 2869.7 20000
4 3205.5 2526
5 3663.9 2844 18000
6 3871.9 3246
7 4231.3 3580 16000
8 4826.7 3922
9 5186.1 4310
14000
10 5367.2 4748
11 5541.4 5127
12 5700.9 5365 12000
13 5509 5537
14 5522.9 5584 10000
15 5944.9 5578
16 6673.8 5659
8000
17 6775 6047
18 6820 6465
19 7286 6756 6000
20 8440 6960
21 8575 7515 4000
22 9026 8100
23 9720 8680 2000
24 10584 9107
25 10645 9777
0
26 10964 10316
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1
27 11526 10731
28 12905 11045
29 12951 11798
30 13107 12461
31 13754 12988
32 15707 13271
33 15420 14189
34 15955 14960
35 16523 15694
36 18103 15966
37 17258 16860
38 17727 17295
39 18675 17696
40 17887
ecast using 3 Moving Average
d using 3 Moving average
Sales
Forecast
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Appendix 18: Sales Forecast Regression with seasonality
Sales Forecasted using seasonality
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.98354832
R Square 0.9673673
Adjusted R Square 0.96352816
Standard Error 956.264674
Observations 39
ANOVA
df SS MS F Significance F
Regression 4 921665923 230416481 251.974919 9.41409E-25
Residual 34 31091032.3 914442.126
Total 38 952756955
CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 935.650407 419.46343 2.23058875 0.03241346 83.1981544 1788.10266 83.1981544 1788.10266
Time 431.805813 13.6331295 31.6732715 8.04162E-27 404.09996 459.511666 404.09996 459.511666
Q1 -316.290854 439.584753 -0.71952189 0.47673642 -1209.63456 577.052848 -1209.63456 577.052848
Q2 -490.076667 439.373296 -1.1153993 0.27250122 -1382.99064 402.837302 -1382.99064 402.837302
Q3 -396.44248 439.584753 -0.90185676 0.37347767 -1289.78618 496.901222 -1289.78618 496.901222
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.98287362
R Square 0.96604055
Adjusted R Square 0.96512273
Standard Error 935.126799
Observations 39
ANOVA
df SS MS F Significance F
Regression 1 920401856 920401856 1052.53484 8.80619E-29
Residual 37 32355098.8 874462.13
Total 38 952756955
CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 630.482591 305.333844 2.06489586 0.04599343 11.8174582 1249.14772 11.8174582 1249.14772
Time 431.643563 13.3047595 32.4427933 8.80619E-29 404.685559 458.601566 404.685559 458.601566
R&D
Forecast
7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
R&D
Forecast
34 35 36
Appendix 18: Research & Development Forecast Regression with seasonality
R&D Forecasted using seasonality
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.96003458
R Square 0.92166639
Adjusted R Square 0.91245067
Standard Error 241.237658
Observations 39
ANOVA
df SS MS F Significance F
Regression 4 23280630.8 5820157.7 100.010257 2.62428E-18
Residual 34 1978650.66 58195.6077
Total 38 25259281.5
CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -87.0934959 105.818377 -0.82304699 0.4162169 -302.142311 127.955319 -302.142311 127.955319
Time 68.3380081 3.43924055 19.8700868 2.73132E-20 61.3486304 75.3273858 61.3486304 75.3273858
Q1 -16.2586585 110.894399 -0.14661388 0.88430269 -241.623192 209.105875 -241.623192 209.105875
Q2 -12.9266667 110.841055 -0.11662345 0.90784462 -238.182791 212.329458 -238.182791 212.329458
Q3 86.2353252 110.894399 0.77763463 0.44216214 -139.129209 311.599859 -139.129209 311.599859
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.95858767
R Square 0.91889032
Adjusted R Square 0.91669816
Standard Error 235.313038
Observations 39
ANOVA
df SS MS F Significance F
Regression 1 23210509.1 23210509.1 419.172405 8.9154E-22
Residual 37 2048772.36 55372.2259
Total 38 25259281.5
CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -76.6148448 76.8334674 -0.99715459 0.32516642 -232.294237 79.0645477 -232.294237 79.0645477
Time 68.5454858 3.34797739 20.4737003 8.9154E-22 61.7618393 75.3291324 61.7618393 75.3291324
Earnings
Forecast
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Earnings
Forecast
35 36
Appendix 24 - Earnings Forecast Regression with seasonality
Earnings Forecasted using seasonality
Regression Statistics
0.95369004
0.90952469
0.89888054
348.815979
39
df SS MS F Significance F
4 41586854.4 10396713.6 85.4482827 3.00256E-17
34 4136867.95 121672.587
38 45723722.3
CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
483.223848 153.007374 3.15817359 0.00332267 172.275452 794.172244 172.275452 794.172244
91.7315854 4.97294687 18.4461221 2.77777E-19 81.6253414 101.837829 81.6253414 101.837829
-91.0039702 160.347015 -0.5675439 0.57407348 -416.868311 234.860371 -416.868311 234.860371
-108.935556 160.269882 -0.67970073 0.5012958 -434.643143 216.772032 -434.643143 216.772032
-252.977141 160.347015 -1.57768538 0.12389794 -578.841482 72.8871999 -578.841482 72.8871999
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.95007192
R Square 0.90263665
Adjusted R Square 0.90000521
Standard Error 346.870746
Observations 39
ANOVA
df SS MS
Regression 1 41271907.7 41271907.7
Residual 37 4451814.64 120319.315
Total 38 45723722.3
Ticker Goog
Company Google
Current price 779.21 531.25
y/end 2014
Historical Year Ended
2003 2004 2005 2006 2007 2008 2009 2010
Revenue 439.51 1,466 3,189 6,139 10,605 16,594 21,796 23,651 29,321
% growth rate 233.54% 117.56% 92.48% 72.76% 56.47% 31.35% 8.51% 23.98%
Gross Profit 882 1,869 3,855 6,874 10,911 14,666 16,313 20,285
% of revenue 60.15% 58.59% 62.80% 64.82% 65.75% 67.29% 68.97% 69.18%
- Total Opex 477 868 1,432 2,789 4,856 6,447 6,468 8,523
% of revenue 32.57% 27.21% 23.33% 26.30% 29.26% 29.58% 27.35% 29.07%
Operating Income (EBIT) 404 1,001 2,423 4,085 6,055 8,219 9,845 11,762
% of revenue 27.58% 31.39% 39.47% 38.52% 36.49% 37.71% 41.63% 40.11%
NOPAT / EBIAT 106 399 1,465 3,077 4,204 4,227 6,520 8,505
% of revenue 24.04% 27.23% 45.95% 50.13% 39.64% 25.47% 29.92% 35.96%
Working Capital 142.288 325 2,353 8,256 11,735 15,254 17,876 26,419 31,566
% of revenue 22.16% 73.78% 134.49% 110.66% 91.92% 82.02% 111.71% 107.66%
Free Cash Flow -203 -1,800 -4,982 -1,810 -751 738 -1,327 721
% of revenue -13.88% -56.43% -81.15% -17.07% -4.53% 3.38% -5.61% 2.46%
37,905 50,175 59,825 66,001 79,624 96,058 115,884 139,803 168,658 203,469 245,465
29.28% 32.37% 19.23% 10.32% 21% 21% 21% 21% 21% 21% 21%
11,351 17,633 21,885 20,711 24,986 30,143 36,364 43,870 52,925 63,849 77,027
29.95% 35.14% 36.58% 31.38% 31% 31% 31% 31% 31% 31% 31%
26,554 32,542 37,940 45,290 54,638 65,915 79,520 95,933 115,733 139,621 168,438
70.05% 64.86% 63.42% 68.62% 69% 69% 69% 69% 69% 69% 69%
5,162 6,793 7,952 9,832 11,944 14,409 17,383 20,970 25,299 30,520 36,820
13.62% 13.54% 13.29% 14.90% 15% 15% 15% 15% 15% 15% 15%
7,313 9,491 11,960 13,982 16,864 20,345 24,544 29,610 35,722 43,095 51,990
19.29% 18.92% 19.99% 21.18% 21% 21% 21% 21% 21% 21% 21%
12,475 16,284 19,912 23,814 28,808 34,754 41,927 50,581 61,020 73,615 88,809
32.91% 32.45% 33.28% 36.08% 36% 36% 36% 36% 36% 36% 36%
14,079 16,258 18,028 21,476 25,830 31,161 37,593 45,352 54,713 66,005 79,629
37.14% 32.40% 30.13% 32.54% 32% 32% 32% 32% 32% 32% 32%
4,342 5,521 5,108 7,032 7,491 9,037 10,902 13,152 15,867 19,142 23,092
30.84% 33.96% 28.33% 32.74% 29% 29% 29% 29% 29% 29% 29%
9,737 10,737 12,920 14,444 18,339 22,124 26,691 32,200 38,846 46,864 56,537
33.21% 28.33% 25.75% 24.14% 23% 23% 23% 23% 23% 23% 23%
1,837 2,872 3,939 4,602 5,550 6,695 8,077 9,744 11,755 14,182 17,109
4.85% 5.72% 6.58% 6.97% 7% 7% 7% 7% 7% 7% 7%
3,438 3,273 7,358 10,959 8,759 6,724 8,112 9,786 11,806 14,243 17,183
9.07% 6.52% 12.30% 16.60% 11% 7% 7% 7% 7% 7% 7%
43,845 46,117 56,978 63,880 75,364 90,919 109,684 132,323 159,635 192,584 232,333
115.67% 91.91% 95.24% 96.79% 95% 95% 95% 95% 95% 95% 95%
12,279 2,272 10,861 6,902 11,484 15,555 18,766 22,639 27,312 32,949 39,749
32.39% 4.53% 18.15% 10.46% 14.42% 16.19% 16.19% 16.19% 16.19% 16.19% 16.19%
-4,143 8,064 -1,360 1,185 3,647 6,541 7,891 9,519 11,484 13,854 16,714
-10.93% 16.07% -2.27% 1.80% 4.58% 6.81% 6.81% 6.81% 6.81% 6.81% 6.81%
8.00% 968 WACC 1 3,295 5,341 5,823 6,348 6,920 7,544 8,225
877 WACC 2 3,137 4,840 5,023 5,212 5,409 5,613 5,825
296,129 357,250
21% 21%
92,925 112,105
31% 31%
203,204 245,145
69% 69%
44,419 53,588
15% 15%
62,720 75,666
21% 21%
107,140 129,253
36% 36%
96,064 115,892
32% 32%
27,859 33,609
29% 29%
68,206 82,283
23% 23%
20,640 24,900
7% 7%
20,729 25,008
7% 7%
280,286 338,137
95% 95%
47,953 57,851
16.19% 16.19%
According to Wacc 2
20,163 24,325 987,328 318,448
6.81% 6.81%
129,511
64,395
0
0
2,009
0
3,228
0
0
0
188,669
(millions) 522
$361.43
Appendix 27 - DCF Valuation - Facebook
Discounted Cash Flow Valuation Facebook
Ticker FB
Company Facebook
Current price 106.49 78.58
y/end 2014
Historical Year Ended Projected
2011 2012 2013 2014 2015 2016 2017
Operating Income (EBIT) 1,542 462 3,167 5,279 5,991 8,987 13,480
% of revenue 41.55% 9.08% 40.23% 42.35% 32% 32% 32%
Working Capital 1,857 3,705 10,215 11,970 12,246 14,024 21,036 31,555
% of revenue 99.84% 200.73% 152.06% 98.24% 75% 75% 75%
Free Cash Flow -1,131 -7,048 -615 2,075 3,219 484 725
% of revenue -30.48% -138.49% -7.81% 16.65% 17.21% 1.72% 1.72%
PV of Free Cash Flow WACC -5.17% 2,307 WACC 1 3,394 538 851
WACC 2 12.29% 1,646 WACC 2 2,867 383 512
LT Growth 3.00%
ook
Enterprise Value
+ Cash & Cash Equivalents
+ Short-term Investments
+ Long-term marketable securities
- Short-term Debt
- Current portion of Long-term Debt
- Long-term Debt
- Book Value of Preferred Stock
- Book Value of Minority Interest
- Notes Payable
Equity Value
Common shares outstanding
-118,261 56,567
2,796 (millions) 522
-$42.30 $108.37
Appendix 28 - Asset based Valuation - Google
Asset based Valuation Google