$4.$ Using the data in Case Exhibits $1$ and $2...$

Using the data in Case Exhibits $1$ and $2,$ what is your assessment of Twitter$$s financial position? Based on your analysis, what financial performance can reasonably be expected in the near$-$term future for Twitter? Support your answer.

Select $$yes$$ for those statements below that are accurate and choose $$no$$ for those that are not.

a$.$ In $2018,$ at $85$ percent of revenue, Twitter was able to post a $15$ percent operating profit.

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b$.$ Operating income had shown a steady improvement over the past five years and, in $2017,$ Twitter had a small positive operating income for the first time.

No

c$.$ R&D expenses were the biggest expense for Twitter year after year.

No

d$.$ Twitter will encounter problems paying its current liabilities, as there has not been sufficient cash for day$-$to$-$day operations.

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e$.$ Twitter had $61$ percent of its total assets in cash and short$-$term investments in $2018,$ up from $55$ percent in $2017.$

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f$.$ In fiscal $2018,$ the company posted a $$1\mathrm{.}2$ billion net income; however, it must be noted that the income was in large part due to benefits resulting from the Tax Act of $2018.$

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g$.$ Cost of revenue and expenses will certainly increase as revenue increases. The increase should be at a very high rate if present trends continue.

No

h$.$ Twitter can be expected to have an increase in revenue as well as positive and increasing net income in the near$-$term future.

Yes

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