Microsoft Excel LibreOffice Calc

Long-term Debt and Solvency Analysis

Difficulty: Beginner


Ratios (Summary)

Facebook Inc., debt and solvency ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Debt to equity 0.00 0.01 0.03
Debt to capital 0.00 0.01 0.03
Interest coverage 3,433.33 1,252.80 270.30 214.48 50.18

Source: Based on data from Facebook Inc. Annual Reports

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity.
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Facebook Inc.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017.

Debt to Equity

Facebook Inc., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Current portion of capital lease obligations 114  239 
Capital lease obligations, less current portion 107  119  237 
Total debt 114  233  476 
Stockholders' equity 74,347  59,194  44,218  36,096  15,470 
Ratio
Debt to equity1 0.00 0.01 0.03
Benchmarks
Debt to Equity, Competitors
Adobe Systems Inc. 0.22 0.26 0.27 0.22 0.23
Alphabet Inc. 0.03 0.03 0.04 0.05 0.06
International Business Machines Corp. 2.66 2.31 2.80 3.44 1.74
Microsoft Corp. 1.19 0.75 0.44 0.25 0.20
Oracle Corp. 1.08 0.93 0.86 0.52 0.41
salesforce.com inc. 0.27 0.26 0.34 0.62 0.22
Debt to Equity, Sector
Software & Computer Services 0.51 0.42 0.39 0.32 0.32
Debt to Equity, Industry
Technology 0.60 0.49 0.45 0.32 0.27

Source: Based on data from Facebook Inc. Annual Reports

2017 Calculations

1 Debt to equity = Total debt ÷ Stockholders' equity
= ÷ 74,347 =

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity.

Debt to Capital

Facebook Inc., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Current portion of capital lease obligations 114  239 
Capital lease obligations, less current portion 107  119  237 
Total debt 114  233  476 
Stockholders' equity 74,347  59,194  44,218  36,096  15,470 
Total capital 74,347  59,194  44,332  36,329  15,946 
Ratio
Debt to capital1 0.00 0.01 0.03
Benchmarks
Debt to Capital, Competitors
Adobe Systems Inc. 0.18 0.20 0.21 0.18 0.18
Alphabet Inc. 0.03 0.03 0.04 0.05 0.06
International Business Machines Corp. 0.73 0.70 0.74 0.77 0.64
Microsoft Corp. 0.54 0.43 0.31 0.20 0.17
Oracle Corp. 0.52 0.48 0.46 0.34 0.29
salesforce.com inc. 0.21 0.21 0.26 0.38 0.18
Debt to Capital, Sector
Software & Computer Services 0.34 0.30 0.28 0.24 0.24
Debt to Capital, Industry
Technology 0.37 0.33 0.31 0.24 0.21

Source: Based on data from Facebook Inc. Annual Reports

2017 Calculations

1 Debt to capital = Total debt ÷ Total capital
= ÷ 74,347 =

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity.

Interest Coverage

Facebook Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income 15,934  10,217  3,688  2,940  1,500 
Add: Income tax expense 4,660  2,301  2,506  1,970  1,254 
Add: Interest expense 10  23  23  56 
Earnings before interest and tax (EBIT) 20,600  12,528  6,217  4,933  2,810 
Ratio
Interest coverage1 3,433.33 1,252.80 270.30 214.48 50.18
Benchmarks
Interest Coverage, Competitors
Adobe Systems Inc. 29.73 21.37 14.61 7.05 6.28
Alphabet Inc. 250.48 195.76 189.95 171.88 175.65
International Business Machines Corp. 19.56 20.60 35.09 42.31 49.58
Microsoft Corp. 11.42 16.89 24.70 47.60 64.06
Oracle Corp. 7.47 8.88 12.33 16.10 18.58
salesforce.com inc. 1.29 1.89 -1.91 -3.64 -3.13
Interest Coverage, Sector
Software & Computer Services 20.57 23.62 28.82 38.14 42.85
Interest Coverage, Industry
Technology 21.58 24.52 38.08 46.46 50.27

Source: Based on data from Facebook Inc. Annual Reports

2017 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= 20,600 ÷ 6 = 3,433.33

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Facebook Inc.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017.