eBay Inc. (NASDAQ:EBAY)

The composition of liabilities and stockholders’ equity exhibited significant shifts between 2014 and 2018. Overall, the proportion of total liabilities increased relative to stockholders’ equity over the period, indicating a growing reliance on debt financing. Several specific liability accounts demonstrated notable trends, while changes within stockholders’ equity also warrant attention.

Current Liabilities

Current liabilities as a percentage of the total decreased substantially from 38.84% in 2014 to a low of 12.72% in 2015, before gradually increasing to 19.52% in 2018. This initial decline was largely driven by a significant reduction in funds payable and amounts due to customers, which disappeared from the reporting after 2014. Accounts payable remained relatively stable, while accrued expenses and other current liabilities showed a moderate increase over the period. Short-term debt fluctuated, peaking in 2016 and 2018.

Non-Current Liabilities

Non-current liabilities demonstrated a marked increase from 17.05% in 2014 to 52.96% in 2018. This growth was primarily fueled by a substantial rise in long-term debt, which nearly doubled from 15.02% to 33.68% over the same period. Deferred tax liabilities also contributed to this increase, though to a lesser extent. Other liabilities experienced a significant increase in later years, particularly 2017 and 2018.

Total Liabilities

As a result of the trends in both current and non-current liabilities, total liabilities increased from 55.89% in 2014 to 72.47% in 2018. This represents a considerable shift in the company’s capital structure, with a greater proportion of its funding coming from liabilities rather than equity.

Stockholders’ Equity

Stockholders’ equity decreased from 44.11% in 2014 to 27.53% in 2018. This decline was primarily driven by significant changes in treasury stock, which became a much larger negative percentage of the total, increasing in magnitude from -31.14% to -115.67%. Retained earnings increased substantially over the period, but this increase was not sufficient to offset the impact of the growing treasury stock balance. Additional paid-in capital also showed an overall increase, though with some fluctuation. Common stock remained a negligible percentage of the total.

Specific Liability Accounts

The disappearance of “Funds payable and amounts due to customers” after 2014 suggests a change in business practices or reporting methodology. The increasing proportion of advertising accruals indicates potentially higher marketing expenditures. The emergence of “Other current tax liabilities” in 2018 suggests a new or specific tax obligation arose in that year.

In summary, the period from 2014 to 2018 witnessed a substantial increase in the company’s reliance on debt financing, coupled with a decrease in stockholders’ equity, largely attributable to treasury stock activity. These trends suggest a more leveraged capital structure and warrant further investigation into the underlying reasons for these changes.