Revenue for the fourth quarter of 2017 came in at $12.9 billion, which is an increase from $10.3 billion in the third quarter. Daily active users increased from the pervious quarter as well to 1.4 billion, an improvement of over 30 million users from last quarter. Advertising continues to be one of Facebook’s revenue streams and will be for the foreseeable future. Net income did drop from Q3 to Q4 of 2017, but the overall trend is still trending upward.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Meta Platforms income statement, its balance sheet, and the statement of cash flows. Potential Meta Platforms investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Meta Platforms investors may use each financial statement separately, they are all related. The changes in Meta Platforms's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Meta Platforms's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Meta Platforms
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Meta Platforms performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Meta Platforms shares is the value that is considered the true value of the share. If
the intrinsic value of Meta is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Meta Platforms. Please read more on our
fundamental analysis page.
How important is Meta Platforms's Liquidity
Meta Platforms
financial leverage refers to using borrowed capital as a funding source to finance Meta Platforms ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Meta Platforms financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Meta Platforms' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Meta Platforms' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Meta Platforms's total debt and its cash.
Breaking down Meta Platforms Further
Mark Zuckerberg was quoted as saying, “2017 was a strong year for Facebook, but it was also a hard one”. He went on to say that he wants Facebook to not only be fun to use but contribute to people’s well-being. With changes in how the company operated, the goal is to show people important and useful information, thus pushing down the hours of time spent on the platform daily by 50 million hours.
Facebook continues to be the leader in social media but all it takes is one new invention or platform to draw people elsewhere. It seems obvious that the goal of Facebook is to make it an effective tool for people to keep in touch, but to also see important information such as news and other notable events.
Zuckerberg was also quoted as saying, “By focusing on meaningful connections, our community and business will be strong over the long term”. This is accurate because the flow of information was being cluttered and Facebook does not want that. Twitter is an example of information that is rapidly expressed with no real order.
The landscape continues to change but it certainly seems to be bright for Facebook. People should continue to advertise and contribute to the growth. Until there are peoples mothers and grandmothers on another platform, Facebook should be in a solid spot. Other platforms gear towards other age groups and genders, but Facebook is the common ground for all and that speaks volumes.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Meta Platforms. Please refer to our
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