This project will require you to show your ability to create and understand the following financial analyses:
- Comparative Horizontal
- Common-Size Vertical
- Averages
- Trend
- The data required for the assignment is here: Link to DatDownload Link to Data
The data is Lyft Inc.'s financial statements and key company metrics that were made public prior to their IPO. It is organized across four different worksheets that include four different sets of financial data: a P&Ls for 2017 and 2018, Balance Sheets for 2017 and 2018, Statement of Cash Flows for 2017 and 2018, and three different company specific metrics.
Assignment Instructions
- Start by conducting the following analyses in the excel workbook. You will turn this in!
- Comparative horizontal analyses of the P&L, Balance Sheet, and Cash Flows from 2017 to 2018 including both absolute and relative changes for each line item. For all of these analyses, you can include them on the same worksheet that the data is located. Be sure to label and give titles to be clear what you are presenting. Be sure all numbers are formatted correctly!
- Common-size vertical analysis of the P&L, Balance Sheet, and Cash Flows for both 2017 and 2018. Use Net Revenue for the P&L common-size, Total Assets for the Balance Sheet common-size, and Beginning of Year Total Cash for the Cash Flows. For all of these analyses, you can include them on the same worksheet that the data is located. Be sure to label and give titles to be clear what you are presenting. Be sure all numbers are formatted correctly!
- In the fourth worksheet "Company Specific Metrics", calculate the average number of rides per active rider for each of the three month periods. In addition, conduct trend analyses (both absolute and relative) for all four of these metrics (the three originally provided and the fourth you just created). For all of these analyses, you can include them on the same worksheet that the data is located. Be sure to label and give titles to be clear what you are presenting. Be sure all numbers are formatted correctly!
- In a separate word document, answer the following questions:
- For the P&L:
- What absolute or relative changes stand out in the horizontal analysis?
- What are some important ideas from the vertical analysis?
- Based on both the horizontal and vertical analyses, how has the company done in terms of Gross Revenue and Gross Profit? Cite the analyses to back up your ideas.
- For the Balance Sheet:
- What absolute or relative changes stand out in the horizontal analysis?
- What are some important ideas from the vertical analysis?
- Based on both the horizontal and vertical analyses, make sense of the total assets, total liabilities, and total equity of the company. How exactly has the company been increasing its assets with the accumulated losses (deficits)? Cite the analyses to back up your ideas.
- For the Cash Flows:
- What absolute or relative changes stand out in the horizontal analysis?
- What are some important ideas from the vertical analysis?
- Evaluate the beginning and end of year cash for both years. Are these changes good or bad? Point to other line items and cite the analyses to back up your ideas.
- For the Company Specific Metrics:
- Explain what the metric you created means, how might the company use it?
- For all four metrics, explain if the trend of the metric is good or bad.
- For the P&L:
P&L
| Lyft, Inc. Profit & Loss Statement | |||
| All numbers in thousands | |||
| Year Ended December 31 | |||
| 2017 | 2018 | ||
| Gross Revenue | $1,059,881 | $2,156,616 | |
| Deductions | $0 | $0 | |
| Net Revenue | $1,059,881 | $2,156,616 | |
| Cost of revenue (COGS) | $659,533 | $1,243,400 | |
| Gross Profit | $400,348 | $913,216 | |
| Other Costs and expenses | |||
| Operations and support | $183,513 | $338,402 | |
| Research and development | $136,646 | $300,836 | |
| Marketing | $567,015 | $803,751 | |
| General and administrative | $221,446 | $447,938 | |
| Total other costs and expenses | $1,108,620 | $1,890,927 | |
| Earnings Before Interest and Taxes | ($708,272) | ($977,711) | |
| Other Income | |||
| Interest income, net | $20,243 | $66,462 | |
| Other income, net | $284 | $652 | |
| Loss before income taxes | ($687,745) | ($910,597) | |
| Provision for income taxes | $556 | $738 | |
| Net lncome | ($688,301) | ($911,335) | |
Balance Sheet
| Lyft, Inc. Balance Sheet | |||||||
| All numbers in thousands | |||||||
| December 31 | |||||||
| 2017 | 2018 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $1,106,102 | $517,690 | |||||
| Short-term investments | $1,284,642 | $1,520,180 | |||||
| Prepaid expenses and other current assets | $172,951 | $282,572 | |||||
| Total current assets | $2,563,695 | $2,320,442 | |||||
| Property and equipment, net | $14,208 | $109,257 | |||||
| Goodwill | $0 | $152,085 | |||||
| Intangible assets, net | $4,349 | $117,733 | |||||
| Restricted cash and cash equivalents | $72,817 | $187,374 | |||||
| Restricted investments | $360,882 | $863,713 | |||||
| Other assets | $776 | $9,439 | |||||
| Total assets | $3,016,727 | $3,760,043 | |||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Accounts payable | $66,874 | $32,343 | |||||
| Insurance reserves | $376,538 | $810,273 | |||||
| Accrued and other current liabilities | $253,406 | $606,203 | |||||
| Total current liabilities | $696,818 | $1,448,819 | |||||
| Other liabilities | $15,298 | $30,458 | |||||
| Total liabilities | $712,116 | $1,479,277 | |||||
| Owner's Stock and Equity (Deficit) | |||||||
| Redeemable convertible preferred stock | $4,284,049 | $5,152,047 | |||||
| Stockholders’ equity (deficit) | |||||||
| Additional paid-in capital | $55,568 | $73,916 | |||||
| Accumulated other comprehensive income (loss) | ($1,011) | $133 | |||||
| Accumulated deficit | ($2,033,995) | ($2,945,330) | |||||
| Total stockholders’ equity (deficit) | ($1,979,438) | ($2,871,281) | |||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $3,016,727 | $3,760,043 | |||||
Cash Flows
| Lyft, Inc. Statement of Cas Flows | |||||
| All numbers in thousands | |||||
| December 31 | |||||
| Cash flows from operating activities | 2017 | 2018 | |||
| Net loss | ($688,301) | ($911,335) | |||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||
| Depreciation and amortization | $2,611 | $18,752 | |||
| Stock-based compensation | $9,546 | $8,577 | |||
| Amortization of premium on marketable securities | $948 | $473 | |||
| Accretion of discount on marketable securities | ($5,542) | ($23,605) | |||
| Other | $0 | $989 | |||
| Changes in operating assets and liabilities | |||||
| Prepaid expenses and other assets | ($111,772) | ($75,640) | |||
| Accounts payable | $21,384 | ($40,811) | |||
| Insurance reserves | $244,587 | $433,735 | |||
| Accrued and other liabilities | $133,013 | $308,192 | |||
| Net cash used in operating activities | ($393,526) | ($280,673) | |||
| Cash flows from investing activities | |||||
| Purchases of marketable securities | ($2,559,423) | ($5,454,118) | |||
| Proceeds from sales of marketable securities | $872,298 | $900,361 | |||
| Proceeds from maturities of marketable securities | $707,722 | $3,838,464 | |||
| Cash paid for acquisitions, net of cash acquired | $0 | ($257,591) | |||
| Purchases of property and equipment and scooter fleet | ($7,537) | ($68,668) | |||
| Purchases of other intangible assets | ($4,486) | ($2,200) | |||
| Net cash used in investing activities | ($991,426) | ($1,043,752) | |||
| Cash flows from financing activities | |||||
| Proceeds from issuance of redeemable convertible preferred stock | $2,045,279 | $842,658 | |||
| Proceeds from exercise of stock options and other common stock issuances | $3,672 | $9,986 | |||
| Payment of deferred offering costs | $0 | ($406) | |||
| Net cash provided by financing activities | $2,048,951 | $852,238 | |||
| Effect of foreign exchange on cash, cash equivalents and restricted cash | $0 | ($246) | |||
| Net increase (decrease) in cash | $663,999 | ($472,433) | |||
| Cash, cash equivalents and restricted cash and cash equivalents | |||||
| Beginning of year | $514,920 | $1,178,919 | |||
| End of year | $1,178,919 | $706,486 | |||
Company Specific Metrics
| Lyft, Inc. Company Specific Metrics | ||||||||||||
| All numbers in millions except Revenue per Active Rider | ||||||||||||
| Three Months Ended | ||||||||||||
| Mar. 31, | June 30, | Sept. 30, | Dec. 31, | Mar. 31, | June 30, | Sept. 30, | Dec. 31, | Mar. 31, | June 30, | Sept. 30, | Dec. 31, | |
| 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | |
| Active Riders | 3.5 | 4.5 | 5.7 | 6.6 | 8.1 | 9.4 | 11.4 | 12.6 | 14.0 | 15.5 | 17.4 | 18.6 |
| Revenue per Active Rider | $15.88 | $14.11 | $18.03 | $18.53 | $21.42 | $25.29 | $26.59 | $27.34 | $28.27 | $32.67 | $33.65 | $36.04 |
| Rides | 29.0 | 36.5 | 44.3 | 52.6 | 70.4 | 85.8 | 103.1 | 116.3 | 132.5 | 146.3 | 162.2 | 178.4 |