Financial analysis of 2015 LinkedIn . a. Determine the following ratios for 2015

Question

Financial analysis of 2015 LinkedIn .

a. Determine the following ratios for 2015: account payable days, current ratio,return on asset, working capital turns

b. Using the DuPont method, calculate the three components of LinkedIn’s return on equity for 2013 and 2015; Identify the components that contributed the most to the observed change in Sears’s return on equity from 2013 to 2015. State the reasons for the observed change.

c. Determine the company’s bankruptcy risk using Z-score.

View: Annual Data | Quarterly Data All numbers in thousands Period Ending Total Revenue Cost of Revenue Gross Profit Dec 31, 2015 2,990,911 418,858 2,572,053 Dec 31, 2014 2,218,767 293,797 1,924,970 Dec 31, 2013 1,528,545 202,908 1,325,637 enses 775,660 1,526,863 536,184 1,115,705 395,643 747,666 Research Development Selling General and Administrative Non Recurring Others Total Operating Expenses 420,472 236,946 134,516 Operating Income or Loss (150,942) 36,135 47,812 nu erations (12,906) (163,848) 50,882 (214,730) (49,969) (1,383) (166,144) 1,416 49,228 Total Other Income/Expenses Net Earnings Before Interest And Taxes Interest Expense Income Before Tax Income Tax Expense Minority Interest Net Income From Continuing Ops 1,867 38,002 6,797 31,205 46,525 49,228 22,459 (427) (15,747) 26,769 Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting Changes Other Items (166,144) (15,747) Net Income Preferred Stock And Other Adjustments Net Income Applicable To Common Shares 26,769 (166,144) (15,747) 26,769

Explanation / Answer

accounts payable days = (account payable/cogs)*365 16218000/41858= 141.4203 current ratio = current assets/current liabilities 3.85/1.19 = 3.235294 return on asset = net income/total assets 166144000/7.01billion = 0.0237 working capital turnover = net sales/working capital 2.99/(3.85-1.19)= 1.12406 ROE BY DU PONT = (NET PROFIT/SALES)*(SALES/ASSETS)*(ASSETS/EQUITY) (166144/2990911)*(2.99/7.01)*(7.01/4.5)= 0.03691

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