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Microsoft Excel LibreOffice Calc


Analysis of Investments

Difficulty: Advanced


Investment Accounting Policy

Short-term investments, which may include marketable equity securities, time deposits, certificates of deposit, government bonds and corporate debt securities with original maturities of greater than three months but less than one year when purchased, are classified as available-for-sale and are reported at fair value using the specific identification method. Unrealized gains and losses are excluded from earnings and reported as a component of other comprehensive income (loss), net of related estimated income tax provisions or benefits.

Long-term investments may include marketable government bonds and corporate debt securities, time deposits, certificates of deposit and cost and equity method investments. Debt securities are classified as available-for-sale and are reported at fair value using the specific identification method. Unrealized gains and losses on eBay's available-for-sale investments are excluded from earnings and reported as a component of other comprehensive income (loss), net of related estimated income tax provisions or benefits.

eBay's equity method investments are primarily investments in privately-held companies. eBay's consolidated results of operations include, as a component of interest and other, net, the share of the net income or loss of the equity method investments. eBay's share of investees' results of operations is not significant for any period presented. eBay's cost method investments consist of investments in privately held companies and are recorded at cost. Amounts received from eBay's cost method investees were not material to any period presented.

eBay assesses whether an other-than-temporary impairment loss on the investments has occurred due to declines in fair value or other market conditions. With respect to the debt securities, this assessment takes into account the severity and duration of the decline in value, the intent to sell the security, whether it is more likely than not that eBay will be required to sell the security before recovery of its amortized cost basis, and whether eBay expects to recover the entire amortized cost basis of the security (that is, whether a credit loss exists).

Source: 10-K (filing date: 2018-02-05).


Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

eBay Inc., adjustment to Net Income (loss)

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income (loss) (as reported) hidden hidden hidden hidden hidden
Add: Unrealized gains (losses) on investments, net hidden hidden hidden hidden hidden
Net income (loss) (adjusted) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).


Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)

eBay Inc., adjusted ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net Profit Margin
Reported net profit margin hidden hidden hidden hidden hidden
Adjusted net profit margin hidden hidden hidden hidden hidden
Return on Equity (ROE)
Reported ROE hidden hidden hidden hidden hidden
Adjusted ROE hidden hidden hidden hidden hidden
Return on Assets (ROA)
Reported ROA hidden hidden hidden hidden hidden
Adjusted ROA hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. eBay Inc.'s adjusted net profit margin improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders' equity. eBay Inc.'s adjusted ROE improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. eBay Inc.'s adjusted ROA improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Net income (loss) (USD $ in millions) hidden hidden hidden hidden hidden
Net revenues (USD $ in millions) hidden hidden hidden hidden hidden
Net profit margin1 hidden hidden hidden hidden hidden
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income (loss) (USD $ in millions) hidden hidden hidden hidden hidden
Net revenues (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted net profit margin2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 Net profit margin = 100 × Net income (loss) ÷ Net revenues
= 100 × hidden ÷ hidden = hidden

2 Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Net revenues
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. eBay Inc.'s adjusted net profit margin improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Net income (loss) (USD $ in millions) hidden hidden hidden hidden hidden
Stockholders' equity (USD $ in millions) hidden hidden hidden hidden hidden
ROE1 hidden hidden hidden hidden hidden
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income (loss) (USD $ in millions) hidden hidden hidden hidden hidden
Stockholders' equity (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted ROE2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 ROE = 100 × Net income (loss) ÷ Stockholders' equity
= 100 × hidden ÷ hidden = hidden

2 Adjusted ROE = 100 × Adjusted net income (loss) ÷ Stockholders' equity
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders' equity. eBay Inc.'s adjusted ROE improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Net income (loss) (USD $ in millions) hidden hidden hidden hidden hidden
Total assets (USD $ in millions) hidden hidden hidden hidden hidden
ROA1 hidden hidden hidden hidden hidden
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income (loss) (USD $ in millions) hidden hidden hidden hidden hidden
Total assets (USD $ in millions) hidden hidden hidden hidden hidden
Adjusted ROA2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-05), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-01), 10-K (filing date: 2015-02-06), 10-K (filing date: 2014-01-31).

2017 Calculations

1 ROA = 100 × Net income (loss) ÷ Total assets
= 100 × hidden ÷ hidden = hidden

2 Adjusted ROA = 100 × Adjusted net income (loss) ÷ Total assets
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. eBay Inc.'s adjusted ROA improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.