Calcuate and evaluate financial ratios using 2020 data for Twitter and Facebook. Use financial statement provided, to compute ratios, compare results, and make an investing decision.

Twitter Financial Statement

vs Facebook

1. Calculate the 2020 (year ended 12/31/20) current ratio for Twitter. ( 6 pts) 2. Calculate the 2020 (year ended 12/31/2020) current ratio for Facebook. (6 pt) 3. Which company has a better current ratio and why? Explain in a short tparagraph. ( 4 ptss) 4. Calculate the 2020 accounts receivable turnover ratio for Twitter. Note: Be sure to average the beginning and ending AR first, before calculating the final ratio. ( 6 pts ) 5. Calculate the 2020 accounts receivable turnover ratio for Facebook. Note: Be sure to average the beginning and ending AR first, before calculating the final ratio. ( 6 ptss) 6. Calculate the average collection period for each company. (8 pts) Show answer as number of days plus 2 decimals. 7. Which company has a better receivable turnover ratio and why? Explain in a short paragraph.(4 pts) 8. Calculate the 2020 return on assets for Twitter. Note: Be sure to average the beginning and ending assets first, before calculating the final ratio. (6 pts) 9. Calculate the 2020 return on assets for Facebook. Note: Be sure to average the beginning and ending assets first, before calculating the final ratio. (6 ptss) 10. Which company has a better return on assets and why? Explain in a short paragraph. (4 pts) 11. Calculate the 2020 debt to equity ratio for Twitter. ( 6 pts) 12. Calculate the 2020 debt to equity ratio for Facebook. (6 pt) 13. Describe in a short paragraph what the debt-to-equity ratio measures and why this would be important to a potential creditor. (4 pts) 14. Calculate the 2020 "net" profit margin for Twitter. (4 pts) Note: This is not the same as "gross profit". Show answer as a percentage plus 2 decimals. 15. Calculate the 2020 "net" profit margin for Facebook. (4 pts) Note: This is not the same as "gross profit". Show answer as a percentage plus 2 decimals. 16. Which company has a better profit margin and why? Explain in a short paragraph. (4 pts) 17. In a paragraph or two, please explain which company you would rather invest in and explain why. Give at least three reasons why based on your ratio analysis. ( 12 pts) 18. Name the auditors for each company. Note: The audit opinion is usually right before or after the financial statements. ( 4 pt) TWITTER, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except par value) 4. December 31, Assets Total liabilities Commitments and contingencies (Note 16) Stockholders' equity? Preferred stock. $0.000005 par value- 200,000 shares autharized: none issued and Qutstanding Common stock, $0.000005 par value 5.000.000 shares authorized; 796,000 and 779.619 4 (erep ajeys Jad adaoxa 'spuesnoun uj) 'DNI ' 311M1. 29 The accompanying notes are an integral part of these consolidated financial statements. TWITTER, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) The accompanying notes are an integral part of these consolidated financial statements. TWITTER, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands) The accompanying notes are an integral part of these consolidated financial statements. TWITTER, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) FACHBOOK. INC. CONSOLIDATED BAIANCE SHEETS (In milfions, except for number of sheres and par vilue) FACEBOOK, INC. CONSOLIDATED STATEMENTS OFINCOME (In millions, except per share amounts) FACEBOOK, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVEINCOME (n mifilons) FACEBOOK, INC. WRNCOt in A TEn STATEMENTS OF STOCKHOLDERS' EQUITY FACEBOOK, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Tn milfons) FACEBOOK, INC. CONSOLIDATED STATEMENTS OF CASH FIOWS (In milfions)