Financial Statement Analysis Project On Uber

Financial Statement Analysis Project
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Table of Content
TOC \o "1-3" \h \z \u 1. Introduction PAGEREF _Toc16707012 \h 32. Company Analysis PAGEREF _Toc16707013 \h 33. Industry Analysis PAGEREF _Toc16707014 \h 54. Financial Statement Analysis PAGEREF _Toc16707015 \h 75. Conclusion and Recommendation PAGEREF _Toc16707016 \h 96. References PAGEREF _Toc16707017 \h 117. Appendices PAGEREF _Toc16707018 \h 15Appendix A: Financial Ratio Analysis PAGEREF _Toc16707019 \h 15Appendix B: Horizontal Analysis for Income Statement PAGEREF _Toc16707020 \h 15Appendix C: Horizontal Analysis for Balance Sheet PAGEREF _Toc16707021 \h 16Appendix D: Vertical Analysis / Common Sized Analysis for Income Statement PAGEREF _Toc16707022 \h 18Appendix E: Vertical Analysis / Common Sized Analysis for Balance Sheet PAGEREF _Toc16707023 \h 18
Financial Statement Analysis Project
1. Introduction
Investors require effective strategies for achieving a high rate of return on investments. As a financial advisor, the recommendation is presented in a report related to the stock of Uber Technologies Inc. in the transportation industry. The investor has planned to diversify its portfolio by investing in financial capital in Uber Technologies. It is important to mention that the investment portfolio of investor contains different types of high-risk stocks. In order to minimize the unsystematic risk, low-risk stocks should be included in the investor portfolio. Report present company, industry and financial statement analyses, and recommendation related to investment are given based on the facts identified.
2. Company Analysis
Uber is a multinational transportation network company, offering different types of services. The company seeks a valuation of up to $91.5 billion in the second quarter of the year 2019 and it makes company IPO (Initial Public Offerings) the largest in the USA since Alibaba debuted in 2014 (Griswold, 2019). Company is planning to sell 180 million shares for raising up to $9 billion (Griswold, 2019). Market share of Uber in the USA is about 69%, revenue increased by 43% to $11.3 billion and gross bookings increased by 45% to $50 billion in the year 2018 (Iqbal, 2019). Uber has diversified its services in recent years, introduced UberPop for peer to peer rides, UberPool for ride-sharing and luxury options like UberChopper. Important competitor Lyft revenue also increased from $1 billion in 2017 to $2.2 billion in 2018, and it's market share is continuously increasing (Iqbal, 2019). Company has faced different types of legal issues and fines are paid for settling the issues. In March 2018, the company paid $20 million for settling a long-running fight with drivers in Massachusetts and California over the issue of independent contractors (Bond, 2019). Uber also paid fine of $2.6 million over the issue of offering unlicensed taxi service in Netherlands (Bond, 2019). Company performance has improved in recent years but it is expected that different kinds of more legal issues will arise in upcoming years.
Company stock performance is below than the expectations. In August 2019, second-quarter results reflect revenue growth by 14% to $3.17 billion and it is lower as compared to analyst estim...