Investors Decisions, Facebook Model and Economic Viability of Facebook

1406 Words Oct 23rd, 2013 6 Pages
Investors Decisions, Facebook Model And Economic Viability Of Facebook

Samuel Osene-Bosompem
California International University

Author Note

Samuel Osene-Bosompem, Department of Doctoral Study Global Business and Leadership

Correspondence concerning this study should be address to Samuel Osene-Bosompem, Ecobank Ghana Limited, SIA Branch, PMB, GPO, Accra, Ghana.

Contact: sbosompem@ecobank.com
Abstract
A Thesis Statement
Most rational investors decision to investing in any company would largely depend on the companies strategic and financial projections and company would use business models like the convergent concept targeted to meet customer needs. For a company to be a going concern, it is expedient that its
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However, according to Laudon and Traver (2012), financial analysis helps us to understand how a firm is performing. There are two parts to a financial analysis: the statement of operations and the balance sheet. The statement of operations tells us how much money (or loss) the firm is achieving based on current sales and costs. The balance sheet tells us how many assets the firm has to support its current and future operations. Moreover, Facebook is estimated to be worth at least $25 billion, and even as much as $100 billion. Although no one knows if Facebook has been profitable in years past, it is reportedly on track to earn as much as $2 billion before interest, taxes, depreciation, and amortization (EBITA) in 2011. According to Sortprice, almost $4 billion worth of merchandise has been put on Facebook storefronts using its app, 8th Bridge offers storefronts that can be embedded in tabs on Facebook pages and within news feed stories (Laudon and Traver, 2012). Clients include Lands’ End, Brooks Brothers, and Hallmark. Currently about 12% of Internet Retailer’s Top 500 retailers have a Facebook shopping application, and that number is sure to grow so one can conclude that Facebook has a going concern (Phillips, 2007). In addition, according to a recent Shop.org study, over 35% of shoppers surveyed said that they would be likely to make a purchase over Facebook (Laudon and Traver,

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