Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

eBay Inc. (NASDAQ:EBAY)

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Analysis of Investments

Advanced level


Accounting Policy on Investments

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 related to equity securities are recognized in interest & other, net, with all other unrealized gains and losses 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 equity 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 debt securities 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 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 investments accounted for under the equity method of accounting. eBay’s share of investees’ results of operations is not significant for any period presented. Equity investments without readily determinable fair values are accounted for at cost, less impairment and adjusted for subsequent observable price changes obtained from orderly transactions for identical or similar investments issued by the same investee. Such changes in the basis of the equity investment are recognized in interest & other, net.

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: 2019-01-30).


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

eBay Inc., adjustment to net income (loss)

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income (loss) (as reported)
Add: Unrealized gains (losses) on investments, net
Net income (loss) (adjusted)

Based on: 10-K (filing date: 2019-01-30), 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).


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

eBay Inc., adjusted profitability ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (filing date: 2019-01-30), 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).

Profitability 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 ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. eBay Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. eBay Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

eBay Inc., Profitability Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)
Net revenues
Profitability Ratio
Net profit margin1
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income (loss)
Net revenues
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (filing date: 2019-01-30), 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).

2018 Calculations

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

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

Profitability 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 ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)
Stockholders’ equity
Profitability Ratio
ROE1
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income (loss)
Stockholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (filing date: 2019-01-30), 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).

2018 Calculations

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

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

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. eBay Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)
Total assets
Profitability Ratio
ROA1
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income (loss)
Total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (filing date: 2019-01-30), 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).

2018 Calculations

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

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

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. eBay Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.