Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Etsy Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Accounts payable	28,007)	40,883)	26,324)	26,545)	13,622)
Pass-through marketplace tax collection obligation	136,360)	109,662)	39,250)	12,242)	3,747)
Vendor accruals	115,593)	73,437)	25,760)	17,817)	14,576)
Employee compensation-related liabilities	66,477)	43,879)	23,335)	19,099)	10,420)
Taxes payable	9,688)	5,374)	—)	—)	—)
Accrued expenses	328,118)	232,352)	88,345)	49,158)	28,743)
Finance lease obligations, current	2,418)	8,537)	8,275)	3,884)	5,798)
Funds payable and amounts due to sellers	220,206)	146,806)	49,786)	21,072)	44,658)
Deferred revenue	12,339)	11,264)	7,617)	7,478)	6,262)
Other current liabilities	24,500)	14,822)	8,181)	3,925)	3,394)
Current liabilities	615,588)	454,664)	188,528)	112,062)	102,477)
Finance lease obligations, net of current portion	110,283)	44,979)	53,611)	2,095)	4,115)
Deferred tax liabilities	79,484)	58,481)	64,497)	30,455)	23,786)
Facility financing obligation	—)	—)	—)	59,991)	60,049)
Long-term debt, net	2,275,418)	1,062,299)	785,126)	276,486)	—)
Other liabilities	122,417)	41,642)	43,956)	19,864)	18,262)
Non-current liabilities	2,587,602)	1,207,401)	947,190)	388,891)	106,212)
Total liabilities	3,203,190)	1,662,065)	1,135,718)	500,953)	208,689)
Common stock, $0.001 par value	127)	126)	119)	120)	122)
Preferred stock, $0.001 par value	—)	—)	—)	—)	—)
Additional paid-in capital	631,762)	883,166)	642,628)	562,033)	499,441)
Retained earnings (accumulated deficit)	71,744)	(146,819)	(227,414)	(153,442)	(96,290)
Accumulated other comprehensive income (loss)	(75,014)	5,951)	(8,699)	(7,813)	(6,379)
Stockholders’ equity	628,619)	742,424)	406,634)	400,898)	396,894)
Total liabilities and stockholders’ equity	3,831,809)	2,404,489)	1,542,352)	901,851)	605,583)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Current Liabilities Trend: The current liabilities have exhibited a strong upward trajectory from 2017 to 2021. Starting at approximately $102 million in 2017, the figure more than doubled by 2018 and surged significantly to over $615 million by the end of 2021. Key components contributing to this increase include accrued expenses, which rose from about $29 million in 2017 to over $328 million in 2021, and vendor accruals, which increased sharply from approximately $15 million to nearly $116 million in the same period. Funds payable and amounts due to sellers also displayed substantial growth, jumping from around $45 million in 2017 to over $220 million by 2021. These changes indicate a notable expansion in operational scale and possibly higher transactional volumes.
Non-Current Liabilities Movement: Non-current liabilities more than doubled each year from 2017 to 2021, escalating from about $106 million to roughly $2.59 billion. In particular, long-term debt rose dramatically, starting from nil in 2017 to exceeding $2.27 billion in 2021, reflecting significant financing activities, possibly linked to growth initiatives or capital expenditures. Finance lease obligations, both current and non-current, also increased notably in certain years, showing shifting obligations under leasing arrangements. Deferred tax liabilities fluctuated but overall increased, suggesting changes in temporary differences or tax positions over the years.
Total Liabilities Development: Total liabilities exhibited a consistent and steep upward trend, growing from approximately $209 million at end-2017 to over $3.2 billion by the end of 2021. This represents a more than fifteen-fold increase, driven by both current and non-current liability growth. This rapid expansion likely reflects company scaling, associated operational activities, and increased leveraging.
Equity Components and Total Stockholders’ Equity: Total stockholders’ equity stayed relatively stable from 2017 through 2019, maintaining levels between approximately $397 million and $407 million. However, there was a significant jump in 2020, rising to over $742 million, followed by a decrease to about $629 million in 2021. Additional paid-in capital increased consistently until 2020 but declined in 2021. This pattern suggests significant equity financing or revaluation events occurring in 2020. Retained earnings, negative through 2019 and 2020, turned positive by 2021, indicating an improvement in accumulated profitability. The accumulated other comprehensive income/loss fluctuated widely, with a negative swing in 2021, which may be attributable to changes in foreign currency translation, unrealized gains/losses, or other comprehensive income elements.
Key Insights and Observations: The data reflects robust growth in liabilities, especially long-term debt and operational payables, indicating expansion but also increased financial risk. The pronounced rise in accrued expenses and vendor accruals signals potentially higher business activity and evolving payment cycles. The increase in equity in 2020 suggests capital raises or profitability improvements; however, the decline in 2021 requires attention. The shift of retained earnings from a deficit to a positive balance is a positive sign of profitability turnaround. Overall, the company's financial structure shows a trend toward greater leveraging accompanied by operational growth, necessitating monitoring of liquidity and solvency metrics going forward.

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Etsy Inc. (NASDAQ:ETSY)

Balance Sheet: Liabilities and Stockholders’ Equity