case study

Case Study Component 1

‘All companies within the industry experience various market fluctuations. Therefore, investors need to ensure they have come to an understanding on how to assess a business’s economic well-being via essential investigation of what their goals, tactics, and profits outlooks for the future will be before deciding to invest their money with that company or product. The following paper will identify an in-depth analysis of Facebook’s profitability, how they manage their assets, what their leverage is, and how their liquidity rations are determined (Chaykowski, 2017). This will any investor to understand the viable company in which they are investing in for the opportunity of capital growth to occur.

As observed from the Ratio investigation, all benefit proportions have been going downward step by step after the preceding year till present. The purpose behind the cause is working costs of Facebook went up. The real zones of spending were research and development, regulatory, General and costs (for the most part because of expanded employing) (Chaykowski, 2017). In this case, these proportions are greater to the announced Industrial average. One of the important fact is that while the business gainfulness is undesirable, Facebook has greater benefit proportions. “Facebook's total Account Receivable dropped by 35.88%, however it is still extensively above than the business normal” (Chaykowski, 2017).

In the interim, Asset Turnover showed a lofty decline of 42.50% to 0.3370, substantially underneath the business normal of 1.1665. The liquidity has expanded because of the deluge of value. The Current proportion has dramatically increased in the most recent year, and is presently at 10.7101, which is 3 times bigger than the business normal (Lagorio-Chafkin, 2015). The dissolvability situation of Facebook is generally worthy as it has been only year and a half subsequently Facebook declared its initial public offering. Interest earned dropped to 10.5491 compared to 41.8095 while industrial average is -50.7390 . Facebook’s debt ratio descending hardly, and it is below the average industry limit. Nonetheless, income numbers are exceptionally consoling. Money hopped by right around 420% to $872 million, totally overpowering the business figure of $68.580 million (Lagorio-Chafkin, 2015).

Mark Zuckerberg and his friends (Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes) in 2004 as an entrance where Harvard studies possibly will remain related with each other. The management slowly reached out to understudies of multiple colleges and as time passed by, unlocked for more than 13 years for everybody. Facebook’s total active users exceeds 1.86 billion (Lagorio-Chafkin, 2015). With average once-a-month engaged employers remaining at 1.7 billion, Facebook is one of the most operated person to person communication stage. Majority of Facebook’s income comes from advertising. Facebook is an alluring publicizing platform for some of the business because they have tremendous and expanded data base to individual’s personal information that they share.Facebook has many goals to continue in building their growth while supplying their active users with the online communication platform they are looking for (Lagorio-Chafkin, 2015). The strategies, technological improvements, and financial outlook are the fundamental values Facebook maintains’.

References

Christine Lagorio-Chafkin (2015) Facebook's 3 Huge Plans for the Future

Kathleen Chaykowski (2017) Facebook Shares Rise on Fourth Quarter Revenue, Earnings That Blow Away Estimates.

INSTRUCTORS COMMENT -CASE STUDY COMPONENT 1-Thank you for your submission. However, you did not incorporate the elements required by the assignment instruction. You discussed some things about Facebook but did not really address the elements required by the assignment instruction. You did not have a title or source for your table. Please use sub-titles such as competitive technology, strategy, etc. to break down your paper into sections. I encourage you to visit the online student success center for information on how to develop your thesis. You have tried. Thank you.

Case Study Component 2

Facebook Development.

Assessment processes

Business Unit Strategy or Strategies

For an organisation to make an investment, it is crucial that they have to undertake several evaluation procedures, this is to aid the agency to discover their SWAT analysis. Business unit strategy is essential to step in the assessment of organisation success; it addresses many questions when analyzed that is;

Where are we?

What do we have to work with?

Where do we want to be?

How do we get there?

Facebook development is seen to have undertaken to series of assessment steps to achieve its success. Although the process is more systematic and rational, it is often iterative and evolves substantially over time. The process also is affected by the political pressure and other external factors. Facebook developed a small area social network to the worldwide phenomenon.

Facebook has to stay concerned with its customers and also the resources they apply to achieve its mission and vision. Through teamwork, Facebook had to work in hand to establish the timeline and milestones (Grocer, 2010). The team has to set up the core factors that influence the success of the company. Users’ value proposition, understanding what users want and need from the social network is more of a key to building a differentiated strategy. Facebook developed convincing reasons why users should use their products, and this made them buy other social platforms Instagram and also WhatsApp social platforms to maintain their users’ needs and experiences. Facebook management had to think in the line of users’ needs that is why it has achieved its success.

Facebook has made their website an advert platform where other companies have developed buying shares from the enterprise, for example, the Microsoft Company. This was to aid them to invest in online business since many of the users over the world can access the site daily.

Future Profitability and Competitive Performance

The social media company have been using the cost-effectiveness analysis to determine their worth and future outcomes which are based on capital returns. This assessment step aids Facebook to determine pricing practice and based on the regulators they set up prices so as to allow the company to earn more returns over the cost invested.

Through market analysis, it has been discovered that Facebook gets much profit per week and the value of the company increases day in day out. This means the rate of competitors in the market is very slow. To avoid much competition on the environment, Facebook has analysed every upcoming technology upgrade which aids them to identify threats to the organisation which help them to be ready assure retaliation (Jason, 2014).

Looking at the internal factors bring out a clear set of strengths and weaknesses by examining its internal factors. Most of the Facebook internal factors are viewed to be strong that is regarding human and financial resources. It is good to identify in this analysis step that Facebook does much better compare to other social media competitors. The organisation has the mandate to discover and analyse all the profitable opportunities that are valuable to maintain its competitive edge in the marketplace.

Facebook growth and profitability is also from the adverts that they are made on a daily basis over their website. This is viewed as among the strategy plans for the company to increase its profits.

References

Grocer, K. (2010). Strategic Planning Process. iEduNote.com. Retrieved 22 March 2017, from https://iedunote.com/strategic-planning-process

Jason, B. (2014). How Facebook Has Developed over the Last Three Years. Socialbakers.com. Retrieved 22 March 2017, from https://www.socialbakers.com/blog/1184-how-facebook-has-developed-over-the-last-three-years

INSTRUCTORS COMMENT -CASE STUDY COMPONENT 2-Thank you for your submission. You incorporated the elements required by the assignment instruction, However, I think you should present some figures under the profitability section to support your discussion. I like the questions you have under business strategy. You have some line spacing issues in the paper. You have tried. Thank you.

Case Study Component 3

External Financial Assessment: Facebook

Financial assessment allows detailed evaluation of the stability, profitability, and viability a project, sub-business or the entire business holds (Gomulya & Boeker, 2014). As such, the following paper entails a detailed financial assessment on Facebook Inc. The article mainly focuses on the future external financing needs and the access to target sources of external funding for Facebook Inc. conclusively, the paper closes with an overview of the facts derived from the research and gives a forecast on the possible future funding curve of Facebook Inc.

In 2012, Derec Thompson prepared a list of 10 most serious threats to Facebook's future success. These became the propelling factors that defined the required areas of expansion and in which the latter needs to gain high competitiveness if at all it is going to survive the ongoing steep competition. In the article, Thompson (2012), pointed out three of the greatest future financing needs for Facebook. First, the firm needs adequate funds to finance the ideas that monetize the Facebook platform. Funding is also required to expand and diversify the business adequately enough to feed the needs of its diverse consumers and fight against competition arising from other local social media sites and search engines. Similarly, Facebook needs adequate funds liable enough to sustain the firm in all incoming technology inconsistencies. Technologies change, and innovative technologies arise each coming day. Therefore, Facebook needs to be readily and financially equipped to ensure its runs ahead in all future technologies to maintain its competitiveness revenue (Facebook Inc., 2017).

All these operations need sufficient external funding. In businesses, external financing is achieved in two primary facets; equity or debt. Equity financing encompasses the sale of business shares to outside sources. On the other hand, debt financing is achieved through credit card purchases, bank loans, and promissory notes (Gomulya & Boeker, 2014).

Fortunately, Facebook Inc. have full access to most sources of external financing for its future external financing needs. As reported by Kapko his 2015 blog, Facebook Inc. began regaining market competitiveness and accelerated growth in the third quarter of 2015. Thereon, the firm not only experience increased revenues but also raised the sale of both the ordinary and preference shares in the enterprise as forms of external financing revenue (Facebook Inc., 2017). Similarly, the apparent success reopened the firm's access to other sources of external financing including bank loans, sales, invoice discounting, venture capitals, bond issues, angle investors and debt factoring.

Evidently, financial assessment is vital in determining a business' financial trajectory. It allows the firm to identify its current and future financial needs and as well dictates the accessibility to sources of finance. Similarly, the above external financial assessment on Facebook Inc. has determined the firm's external financial trajectory. Facebook is already reporting accelerated growth in its user base, mobile users, and mobile ad revenue (Facebook Inc., 2017). This means that the firm is readily preparing to address its future external financing needs. With continued acceleration to this direction and illustrated access to sources of external finance, it is no doubt that Facebook Inc. will be able to sustain its future external financial needs adequately.

Facebook Inc. (FB) (2017). "Facebook Inc. (FB) | Financial Analysis and Stock Valuation". Stock Analysis on Net. Accessed 5 Apr. 2017 from <https://www.stock-analysis-on.net/NASDAQ/Company/Facebook-Inc>

Gomulya, D., & Boeker, W. (2014). How firms respond to financial restatement: CEO successors and external reactions. Academy of Management Journal, 57(6), 1759-1785.

Kapko, M. (2015). "Facebook Shuts Up Critics With Impressive Q3 Financials". CIO. Accessed 5 Apr. 2017 from <http://www.cio.com/article/3002288/social-networking/facebook-shuts-up-critics-with-impressive-q3-financials.html>.

Thompson, D. (2012). "Facebook's 10 Most Serious Threats, According To Facebook". The Atlantic. Accessed 5 Apr. 2017 from <https://www.theatlantic.com/business/archive/2012/02/facebooks-10-most-serious-threats-according-to-facebook/252398/>.

INSTRUCTORS COMMENT - Case Study Component 3 -Thank you for your submission. You incorporated the elements required by the assignment instruction. You provided essential supporting details. Your argument shows logical progressions. You did a good job. Thank you.