This document analyzes the financial performance of Twitter from 2012-2014 through income statements, balance sheets, cash flow statements, and key financial ratios. It shows that Twitter improved its liquidity and reduced debt levels over this period. While Twitter generated negative net income each year, its current ratio and debt ratios improved from 2012 to 2014, indicating stronger financial stability. The analysis also calculates profit margin, return on equity, and cash flows to evaluate Twitter's overall financial performance during this startup period.

2. FINANCIAL STATEMENT ANALYSIS
GROUP MEMBER: Hồ Minh Trang
Nguyễn Diệu Linh
Nguyễn Thị Phương Anh ( 11130215)
Vũ Linh
Nguyễn Trung Hiếu
Advanced Finance 55B

3. 1) Income Statement
2) Balance Sheet
3) Cash Flow
4) Performance of the firm
OUTLINE

4. REVENUE
GROSS PROFIT
EBIT
NET INCOME
INCOME STATEMENT

5. Income Statement
Period Ending
Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
Total Revenue 1,403,002 664,890 316,933
Cost of Revenue 446,309 266,718 128,768
Gross Profit 956,693 398,172 188,165
Operating Expenses
Research Development 691,543 593,992 119,004
Selling General and
Administrative
804,016 440,011 146,244
Total Operating Expenses 1,495,559 1,034,003 265,248
Operating Income or
Loss
-538,866 -635,831 -77,083

6. Income from Continuing
Operations
Total Other Income/Expenses
Net
-5,500 -4,455 399
Earnings Before Interest And
Taxes
-578,351 -647,146 -79,170
Interest Expense - - -
Income Before Tax -578,351 -647,146 -79,17
Income Tax Expense -531 -1,823 229
Net Income From
Continuing Ops
-577,820 -645,323 -79,399
Net Income -577,820 -645,323 -79,399

7. 1) Goal of Balancce Sheet
2) Cash & Cash Equivalent
3) Short – term Investment
4)Total Asset – Total Liabilities
5) Return on asset
6) Return on equity
BALANCE SHEET

8. 2014 2013
Assets
Current assets
Cash 27,1% 25%
Account
Receivables 7,5 7,3
Inventory 0 0
Total 34,6 32,3
Fixed assets 65,4 67,7
Total asset 100 100
Total Liabilities and
Owners’ Equity
Current liabilities
Account Payable 5 4,1
Notes Payable 2 2,6
Total 7 6,7
Long - term debt 26,8 3,3
Owners' equity
Common Stock and paid in
surplus 94,4 119,5
Retained earnings -28,2 -29,5
Total 66,2 90
Total liabilities and owners'
equity 100 100

9. TYPE OF RATIO
LIQUITDIY
• Current ratio
Long term
solvency
• Total debt ratio
PROFITABILITY
• Profit margin ratio

10. Liquidity ratio
• Current ratio = current assets / current liabilities
• Current ratio: in 2012, the firm 's ability to cover its
current liabilities with its current assets was 5.04. , the
ratio goes up sharply to 11.42 in 2013 and finally drop
down at 10.8. The higher ratio. the greater the ability
the firm to pay its bill=> Twitter is improving liquidity and
efficiency, because current ratio is improving.
Year 2014 2013 2012
Current ratio 10.8 11.42 5.04

11. Long term solvency
• Total debt ratio = Total debt / Total assets
– Total debt ratio was 129% in 2012, which means
that Twitter's debts exceeds its total assets and
the company have to sell all of its assets to pay its
liabilities .Fortunately, In 2013 & 2014, Twitter's
liabilities are less than 50 % of its total assets, and
it implies that the company now is more stable
and with the potential of longevity.
Year 2014 2013 2012
Total debt
ratio
0.35 0.12 1.29

12. Profitability
• Profit margin ratio = Net income / Net sales
• The profit margin ratio equals net income / net sales
is negative, which implies that Twitter's profit is not
high enough to distribute dividends and to pay back
its loan. Twitter's expenses are also too high and the
management needs to budget and cut expense.
Year 2014 2013 2012
Profit
margin ratio
-0.41 -0.97 -0.25

13. CASH FLOW STATEMENT
Cash flow from
operating activities
Cash flow from
investing activities
Cash flow from
financing activites

14. Period Ending Dec 31,2014 Dec 31,2013 Dec 31,2013
Net Income -577.820 -645.323 -79.399
Operating Activities, Cash Flows Provided By or Used In
Depreciation 234,651 114,351 76,608
Adjustments To Net
Income
626,940 593,726 28,202
Changes In Accounts
Receivables
-177.583 -112.060 -73.898
Changes In Liabilities 141,003 62,749 27,243
Changes In Other
Operating Activities
-165.395 -12.045 -6.691
Total Cash Flow From
Operating Activities
81,796 1,398 -27.935

15. Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures -201.630 -75.744 -50.599
Investments -719.423 -1.175.403 104,711
Other Cash flows from
Investing Activities
-176.219 -54.919 -4.669
Total Cash Flows From
Investing Activities
-1.097.272 -1.306.066 49,443
Financing Activities, Cash Flows Provided By or Used In
Dividends Paid - - -
Sale Purchase of Stock 360,332 2,027,258 2,312
Net Borrowings 1,349,886 -70.445 -39.436
Other Cash Flows from
Financing Activities
-18.496 -14.637 -
Total Cash Flows From
Financing Activities
1,691,722 1,942,176 -37.124
Effect Of Exchange Rate
Changes
-6.532 174 -52
Change In Cash and Cash
Equivalents
676,246 637,508 -15.616

16. CASH FLOW STATEMENT
2014 2013 2012
Operating cash flow -343,169 -530,972 -2,791
Net capital spending 483,842 260,272 199,716
Change in NWC 1,512,810 1,904,662 -103,737
Free Cash Flow -2339821 -2,695,906 -98,770

17. PERFORMANCE OF TWITTER
• Current ratio
• Debt ratio
• 2013: 0.12 – 2014: 0.35
1)LIQUIDITY
• Net income
• Return on equity
• Profit margin
2)FINANCIAL
SITUATION