FINANCIAL STATEMENT ANALYSIS

GROUP MEMBER: Hồ Minh TrangNguyễn Diệu Linh Nguyễn Thị Phương Anh ( 11130215)Vũ Linh Nguyễn Trung Hiếu

Advanced Finance 55B

1) Income Statement

2) Balance Sheet

3) Cash Flow

4) Performance of the firm

OUTLINE

REVENUE

GROSS PROFIT

EBIT

NET INCOME

INCOME STATEMENT

Income Statement Period Ending Dec 31, 2014 Dec 31, 2013 Dec 31, 2012

Total Revenue 1,403,002 664,890 316,933

Cost of Revenue 446,309 266,718 128,768

Gross Profit 956,693 398,172 188,165

Operating Expenses

Research Development 691,543 593,992 119,004

Selling General and Administrative 804,016 440,011 146,244

Total Operating Expenses 1,495,559 1,034,003 265,248

Operating Income or Loss -538,866 -635,831 -77,083

Income from Continuing Operations

Total Other Income/Expenses Net -5,500 -4,455 399  

Earnings Before Interest And Taxes -578,351 -647,146 -79,170

Interest Expense -   -   -  

Income Before Tax -578,351 -647,146 -79,17

Income Tax Expense -531 -1,823 229  

Net Income From Continuing Ops -577,820 -645,323 -79,399

Net Income   -577,820 -645,323 -79,399

1) Goal of Balancce Sheet

2) Cash & Cash Equivalent

3) Short – term Investment

4)Total Asset – Total Liabilities

5) Return on asset

6) Return on equity

BALANCE SHEET

2014 2013

Assets

Current assets

Cash 27,1% 25%Account Receivables 7,5 7,3

Inventory 0 0

Total 34,6 32,3

Fixed assets 65,4 67,7

Total asset 100 100

Total Liabilities and Owners’ Equity

Current liabilities

Account Payable 5 4,1

Notes Payable 2 2,6

Total 7 6,7

Long - term debt 26,8 3,3

Owners' equity

Common Stock and paid in surplus 94,4 119,5

Retained earnings -28,2 -29,5

Total 66,2 90Total liabilities and owners'

equity 100 100

TYPE OF RATIO

LIQUITDIY• Current ratio

Long term solvency

• Total debt ratio

PROFITABILITY• Profit margin ratio

Liquidity ratio

• Current ratio = current assets / current liabilities

• Current ratio: in 2012, the firm 's ability to cover its current liabilities with its current assets was 5.04. , the ratio goes up sharply to 11.42 in 2013 and finally drop down at 10.8. The higher ratio. the greater the ability the firm to pay its bill=> Twitter is improving liquidity and efficiency, because current ratio is improving.

Year 2014 2013 2012

Current ratio 10.8 11.42 5.04

Long term solvency• Total debt ratio = Total debt / Total assets

– Total debt ratio was 129% in 2012, which means that Twitter's debts exceeds its total assets and the company have to sell all of its assets to pay its liabilities .Fortunately, In 2013 & 2014, Twitter's liabilities are less than 50 % of its total assets, and it implies that the company now is more stable and with the potential of longevity.

Year 2014 2013 2012

Total debt ratio

0.35 0.12 1.29

Profitability• Profit margin ratio = Net income / Net sales

• The profit margin ratio equals net income / net sales is negative, which implies that Twitter's profit is not high enough to distribute dividends and to pay back its loan. Twitter's expenses are also too high and the management needs to budget and cut expense.

Year 2014 2013 2012Profit margin ratio

-0.41 -0.97 -0.25

CASH FLOW STATEMENT

Cash flow from operating activities

Cash flow from investing activities

Cash flow from financing activites

Period Ending Dec 31,2014 Dec 31,2013 Dec 31,2013

Net Income -577.820 -645.323 -79.399

Operating Activities, Cash Flows Provided By or Used In

Depreciation 234,651 114,351 76,608

Adjustments To Net Income 626,940 593,726 28,202

Changes In Accounts Receivables -177.583 -112.060 -73.898

Changes In Liabilities 141,003 62,749 27,243

Changes In Other Operating Activities -165.395 -12.045 -6.691

Total Cash Flow From Operating Activities 81,796 1,398 -27.935

Investing Activities, Cash Flows Provided By or Used InCapital Expenditures -201.630 -75.744 -50.599Investments -719.423 -1.175.403 104,711 Other Cash flows from Investing Activities -176.219 -54.919 -4.669

Total Cash Flows From Investing Activities -1.097.272 -1.306.066 49,443

Financing Activities, Cash Flows Provided By or Used InDividends Paid - - -

Sale Purchase of Stock 360,332 2,027,258 2,312

Net Borrowings 1,349,886 -70.445 -39.436

Other Cash Flows from Financing Activities -18.496 -14.637 -

Total Cash Flows From Financing Activities 1,691,722 1,942,176 -37.124

Effect Of Exchange Rate Changes -6.532 174 -52

Change In Cash and Cash Equivalents 676,246 637,508 -15.616

CASH FLOW STATEMENT

2014 2013 2012

Operating cash flow -343,169 -530,972 -2,791

Net capital spending 483,842 260,272 199,716

Change in NWC 1,512,810 1,904,662 -103,737

Free Cash Flow -2339821 -2,695,906 -98,770

PERFORMANCE OF TWITTER

• Current ratio• Debt ratio • 2013: 0.12 – 2014: 0.35

1)LIQUIDITY

• Net income• Return on equity • Profit margin

2)FINANCIAL

SITUATION