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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (60653)	4/5/2018 6:05:31 AM
From: bruwin	Read Replies (1) of 78753

" FB margins - it is not uncommon for software to have 80% gross margins" No, it isn't, and that's the beauty of running a business that is primarily based on the internet that can rake in advertising revenue or a company that primarily provides the market with desired information, etc, etc.. If one looks at FB's last Annual, .... .... apart from a very healthy annual increase in Top Line Revenue, one sees a Very Large EBITDA/Revenue of over 58%. One won't see that sort of number in the more traditional industrial type companies. Not unexpectedly one sees a very low CoS/Rev of only ~13% and SG&A/Rev of only ~17%. However, the fact that FB only had a tax rate of 10.3% possibly raises some "questions". No doubt there are some smart "tax advisors" on Zuckerberg's payroll taking any advantage they can of any US tax loopholes. If FB was paying closer to the previous 35% tax rate that would have cut about $5 billion more off his Bottom Line (Would be interesting to know how they calculate their tax obligation). Probably not a "train smash" seeing as FB had a Net Income of close to $16 billion and hadn't paid a dividend !

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