[SOLVED] example of company performance analysis. select two companies and compare their financial structures including WACC, book value, and market value.
United States steel is a steel production company located in Pittsburgh, Pennsylvania. The company was founded in 1901. The company area of operation includes the USA and central Europe. The company generated revenue of 10 billion in 2016 financial year. Facebook, on the other hand, is a social media platform founded in 2004. The company is based in Menlo Park California. The company generated a revenue of 27 billion 2016 financial year. These companies operate in different industries. Therefore, the underlying conditions that influence the earning of companies may be totally different. Besides, their assets and expenses are totally different. A company like Facebook invest most on research and development while a company like US steel invest heavily on plant and equipment.
United States steel (X) have 176,000,000 outstanding shares while Facebook have 2,930,000,000 outstanding shares. The price per share for United States steel (X) is 35.48 USD and for Facebook (FB) is 161.89 USD. Therefore, the value of United States Steel (X) is 6,244,480,000 USD and for Facebook (FB) is 474,337,700,000 USD (Yahoo, 2019). The book value of the company is calculated by taking the total asset value less total liability. Therefore the book value of each company is as calculated below
