Calculate the internal and sustainable growth rates for Zoom Video Communications; Retention ratio is 0.006 or .6% Consolidated Balance Sheet information: CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands Jan. 31, 2020 Jan. 31, 2019 Current assets: Cash and cash equivalents $ 283,134 $ 63,624 Marketable securities 572,060 112,777 Accounts receivable, net of allowances of $7,634 and $2,071 as of January 31, 2020 and 2019, respectively 120,435 63,613 Deferred contract acquisition costs, current 44,885 26,453 Prepaid Expense and Other Assets, Current 75,008 10,252 Total current assets 1,095,522 276,719 Deferred contract acquisition costs, noncurrent 46,245 29,063 Property and equipment, net 57,138 37,275 Operating lease right-of-use assets 68,608 Other assets, noncurrent 22,332 11,508 Total assets 1,289,845 354,565 Current liabilities: Accounts payable 1,596 4,963 Accrued expenses and other current liabilities 122,692 32,256 Deferred revenue, current 209,542 115,122 Total current liabilities 333,830 152,341 Deferred revenue, noncurrent 20,994 10,651 Operating lease liabilities, noncurrent 64,792 Other liabilities, noncurrent 36,286 39,460 Total liabilities 455,902 202,452 Commitments and contingencies (Note 8) Convertible preferred stock, $0.001 par value per share, zero and 158,104,540 shares authorized as of January 31, 2020 and 2019, respectively; zero and 152,665,804 shares issued and outstanding as of January 31, 2020 and 2019, respectively 0 159,552 Stockholders’ equity (deficit): Preferred stock, $0.001 par value per share, 200,000,000 and zero shares authorized as of January 31, 2020 and 2019, respectively; zero shares issued and outstanding as of January 31, 2020 and 2019 0 0 Common stock, $0.001 par value per share, 2,000,000,000 and 320,000,000 Class A shares authorized as of January 31, 2020 and 2019, respectively; 123,391,114 and zero shares issued and outstanding as of January 31, 2020 and 2019, respectively; 300,000,000 Class B shares authorized as of January 31, 2020 and 2019; 155,336,747 and 90,327,435 shares issued and outstanding as of January 31, 2020 and 2019, respectively 277 89 Additional paid-in capital 832,705 17,760 Accumulated other comprehensive income (loss) 809 (135) Retained earnings (accumulated deficit) 152 (25,153) Total stockholders’ equity (deficit) 833,943 (7,439) Total liabilities, convertible preferred stock, and stockholders’ equity (deficit) $ 1,289,845 $ 354,565 Consolidated statement comprehensive Income CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands 12 Months Ended Jan. 31, 2020 Jan. 31, 2019 Jan. 31, 2018 Statement of Comprehensive Income [Abstract] Net income (loss) $ 25,305 $ 7,584 $ (3,822) Other comprehensive income (loss): Unrealized gain (loss) on available-for-sale marketable securities, net of tax 944 396 (531) Comprehensive income (loss) $ 26,249 $ 7,980 $ (4,353)

Calculate the internal and sustainable growth rates for Zoom Video Communications; Retention ratio is 0.006 or .6% Consolidated Balance Sheet information: CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands Jan. 31, 2020 Jan. 31, 2019 Current assets: Cash and cash equivalents $ 283,134 $ 63,624 Marketable securities 572,060 112,777 Accounts receivable, net of allowances of $7,634 and $2,071 as of January 31, 2020 and 2019, respectively 120,435 63,613 Deferred contract acquisition costs, current 44,885 26,453 Prepaid Expense and Other Assets, Current 75,008 10,252 Total current assets 1,095,522 276,719 Deferred contract acquisition costs, noncurrent 46,245 29,063 Property and equipment, net 57,138 37,275 Operating lease right-of-use assets 68,608 Other assets, noncurrent 22,332 11,508 Total assets 1,289,845 354,565 Current liabilities: Accounts payable 1,596 4,963 Accrued expenses and other current liabilities 122,692 32,256 Deferred revenue, current 209,542 115,122 Total current liabilities 333,830 152,341 Deferred revenue, noncurrent 20,994 10,651 Operating lease liabilities, noncurrent 64,792 Other liabilities, noncurrent 36,286 39,460 Total liabilities 455,902 202,452 Commitments and contingencies (Note 8) Convertible preferred stock, $0.001 par value per share, zero and 158,104,540 shares authorized as of January 31, 2020 and 2019, respectively; zero and 152,665,804 shares issued and outstanding as of January 31, 2020 and 2019, respectively 0 159,552 Stockholders’ equity (deficit): Preferred stock, $0.001 par value per share, 200,000,000 and zero shares authorized as of January 31, 2020 and 2019, respectively; zero shares issued and outstanding as of January 31, 2020 and 2019 0 0 Common stock, $0.001 par value per share, 2,000,000,000 and 320,000,000 Class A shares authorized as of January 31, 2020 and 2019, respectively; 123,391,114 and zero shares issued and outstanding as of January 31, 2020 and 2019, respectively; 300,000,000 Class B shares authorized as of January 31, 2020 and 2019; 155,336,747 and 90,327,435 shares issued and outstanding as of January 31, 2020 and 2019, respectively 277 89 Additional paid-in capital 832,705 17,760 Accumulated other comprehensive income (loss) 809 (135) Retained earnings (accumulated deficit) 152 (25,153) Total stockholders’ equity (deficit) 833,943 (7,439) Total liabilities, convertible preferred stock, and stockholders’ equity (deficit) $ 1,289,845 $ 354,565 Consolidated statement comprehensive Income CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands 12 Months Ended Jan. 31, 2020 Jan. 31, 2019 Jan. 31, 2018 Statement of Comprehensive Income [Abstract] Net income (loss) $ 25,305 $ 7,584 $ (3,822) Other comprehensive income (loss): Unrealized gain (loss) on available-for-sale marketable securities, net of tax 944 396 (531) Comprehensive income (loss) $ 26,249 $ 7,980 $ (4,353)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 99.2C

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Question

Calculate the internal and sustainable growth rates for Zoom Video Communications; Retention ratio is 0.006 or .6%

Consolidated Balance Sheet information:

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Current assets:
Cash and cash equivalents	$ 283,134	$ 63,624
Marketable securities	572,060	112,777
Accounts receivable, net of allowances of $7,634 and $2,071 as of January 31, 2020 and 2019, respectively	120,435	63,613
Deferred contract acquisition costs, current	44,885	26,453
Prepaid Expense and Other Assets, Current	75,008	10,252
Total current assets	1,095,522	276,719
Deferred contract acquisition costs, noncurrent	46,245	29,063
Property and equipment, net	57,138	37,275
Operating lease right-of-use assets	68,608
Other assets, noncurrent	22,332	11,508
Total assets	1,289,845	354,565
Current liabilities:
Accounts payable	1,596	4,963
Accrued expenses and other current liabilities	122,692	32,256
Deferred revenue, current	209,542	115,122
Total current liabilities	333,830	152,341
Deferred revenue, noncurrent	20,994	10,651
Operating lease liabilities, noncurrent	64,792
Other liabilities, noncurrent	36,286	39,460
Total liabilities	455,902	202,452
Commitments and contingencies (Note 8)
Convertible preferred stock, $0.001 par value per share, zero and 158,104,540 shares authorized as of January 31, 2020 and 2019, respectively; zero and 152,665,804 shares issued and outstanding as of January 31, 2020 and 2019, respectively	0	159,552
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value per share, 200,000,000 and zero shares authorized as of January 31, 2020 and 2019, respectively; zero shares issued and outstanding as of January 31, 2020 and 2019	0	0
Common stock, $0.001 par value per share, 2,000,000,000 and 320,000,000 Class A shares authorized as of January 31, 2020 and 2019, respectively; 123,391,114 and zero shares issued and outstanding as of January 31, 2020 and 2019, respectively; 300,000,000 Class B shares authorized as of January 31, 2020 and 2019; 155,336,747 and 90,327,435 shares issued and outstanding as of January 31, 2020 and 2019, respectively	277	89
Additional paid-in capital	832,705	17,760
Accumulated other comprehensive income (loss)	809	(135)
Retained earnings (accumulated deficit)	152	(25,153)
Total stockholders’ equity (deficit)	833,943	(7,439)
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)	$ 1,289,845	$ 354,565

Consolidated statement comprehensive Income

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 25,305	$ 7,584	$ (3,822)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale marketable securities, net of tax	944	396	(531)
Comprehensive income (loss)	$ 26,249	$ 7,980	$ (4,353)

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