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Facebook balance sheet, 2010-2011 7B cash increase, 17b net goodwill increase

http://www.marketwatch.com/investing/stock/fb/financials/balance-sheet

As you can see, in 2011, Facebook reports that it has 8.97B in cash from 1.79. During this time, it did not raise anywhere near 7.2B (atleast as publicly reported and/or recorded on crunchbase).

In addition, in 2014, they record a Net Goodwill of ~18b.

The questions are the following:

  1. Where did they accumulate 7B cash? Eg, must they have raised cash or are there ways to come up with this number with creative accounting/liquidation of assets that perhaps I am not seeing? In a practical sense, were there some events that occured that were not publicly recorded? By 2007, Facebook was well on it’s way to being a market force in it’s sector, having raised from Microsoft and having mindshare with developers.

Perhaps they acquired a corporation with significant cash assets.

  1. Their total balance sheet equity value is far from their market cap? Is the net goodwill what they are using bring those numbers closer? Why is that relevant and is there any methodology to assignng that number? Presumably, it is a relatively arbitrary number but they have leeway with it considering their public market cap.
  2. Perhaps the net goodwill they are using to assign value to the WhatsApp acquisition.

Answer 6046

The increase in cash is from Facebook’s public offering.

You noted on the balance sheet you linked to on MarketWatch that it says went from 1.79B in cash in 2010 to 8.79B in 2011. In the shareholder’s equity section of that same balance sheet, Common Equity goes from 2.16B to 12.35B. That’s the money raised by Facebook by selling shares.

However, the strange thing is that Facebook went public in May 2012, so none of this should be reflected in 2011. It looks like there is something wrong with MarketWatch’s data because when you look at the same balance sheet on Google Finance, you see different numbers (see here: https://www.google.com/finance?q=NASDAQ:FB&fstype=ii). The numbers on Google Finance are more consistent with what you’d expect given the timing of Facebook’s public offering.

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