eBay, Inc. Annual Report

eBay, Inc.
Annual Report
Jonathan Bowers
ACG2021 (001)

Executive Summary
Ebay continues to grow and make profits,
though allowing people to buy and sell goods
while only charging them a small fee. Ebay’s
payment program Paypal continues to become more
trustworthy and used to pay for many goods and
services.
http://files.shareholder.com/downloads/ebay/430
089552x0x192977/08eaa22c-c31c-41ad-b4d3-
0a954354566f/ar2007.pdf

eBay Introduction
John Donahoe, President and CEO
Executive Office at 2145 Hamilton Avenue San Jose,
California
Fiscal year ended December 31, 2007
eBay offers online buying and selling of goods, eBay
offers Paypal their online payment method, and Their
company Skype offers online communication
Ebay does most business in the US, but is very
succesful doing bussiness across the world

eBay’s independent Auduitors
Pricewaterhouse Coopers LLP
eBay’s independent auditors confirmed
that eBay and all its subsidaries are in
accordance with general accounting
principles in the United States for the
peirod ending December 31, 2007 and the
three previous years.

eBay’s Stock Market
Most recent stock price $18.94
12 mo. Trading range between $40.73 &
$18.93
No Divident listed
Dated October 3, 2008
Stock has been low, would be a good time
to buy

Ebay’s Situation and Company
Plans
Ebay seems confident that they will continue to
make profits by attracting users and keeping old
users in both the ebay service and their new
technology program, Skype.

Ebay’s Income Statement
Ebay use the multistep format
The numbers in Income from operations
and Net income have dropped significantly
compared to the year before
In thousands
Gross Profit Income for
operations
Net Income
2006 4,712,949 1,422,956 1,125,639
2007 5,909,357 613,180 348,251

In Thousands
Ebay’s Balance sheet
year Assets Liabilities SE L + SE
2006 $13,494,011 $2,589,379 $10,904,632 $13,9494,011
2007 $15,366,037 $3,661,435 $11,704,602 $15,366,037
Total assets has increased 1.87 billion, and total
liabilities has increased 1.07 billion. I think the
increase in liabilites is far too high compared to
the increase in assets.

Ebay Statement of Cashflows
Net Income by far lower than Net cash provided from
operating activities over last two years.
Ebay is still growing through its investing activities
Their primary source of financing is sale/repurchasing of
common stock
Overall cash has increased significantly over the past
two years

Accounting Policies
All investments are made with as little risk as
possible.
Management decides on financial policies which
is checked by the audit company

Financial Analysis
Liquidity Ratios
Working Capital in 2006 was $2,452191, in 2007 was
$4,022,926, current assets was much higher in 2007
cause the higher number.
Current ratio in 2006 was 1.97, in 2007 was 2.30
Recievable Turnover in 2006 was 15.18, in 2007 was
15.97, numbers between years are very close
Avg. day’s sales uncollected in 2006 was 24 days in
2007 it was 22.86 days
Inventory turnover- no average inventory given

Financial Analysis
Profitability Ratios
Profit margin in 2006 was 18.9% in 2007 it was 4.5%.
2007’s profit margin is horrible when compared to the
previous year.
Asset turnover in 2006 was .41 times, and was .53 times
in 2007.
Return on assets in 2006 was 7.8%, and in 2007 it was
2.4%
Return on Equity in 2006 was 10%, in 2007 it is 3.1% a
pretty large difference than the previous year

Financial Analysis
Solvency Ratio
Debt to Equity in 2006 was 23.7%, and in
2007 was 31.3%. The change in numbers
between years maybe from buying back a
large amount of their stock shares.

Financial Analysis
Market Strength Ratios
In 2007 eBay’s price/earnings per share
was 12.52, in 2006 it was