FAANG

Can we define a couple of technology-companies as a large tooth? Probably not, but still the acronym FANG was introduced to group Facebook, Amazon, Netflix and Google. When Apple was added (remarkable as this is a real hardware-centered company – the others being service providers and platforms from the start) it became FAANG. https://www.investopedia.com/terms/f/faang-stocks.asp

The question is, do these companies have something in common from a financial perspective? Let’s use AnRep3D to find out!

Now that we have a legend, it is easy to pick the most interesting values for the dimensions of the graph. Total Revenue and Net profit or loss, are still interesting so let’s take those. Then Equity, as always but this time Liabilities (rather than Total Assets often used in this blog) would be interesting. Of course it makes only sense if we don’t take a single snapshot in time. AnRep3D allows us to compare the companies over a couple of years. The most recent five available will do: 2013 – 2017.

I must admit that I’ve been a little bit lazy: if a series of years was available in the most recent Annual Report (e.g. Revenue and Net Profit for 2013 – 2017), I didn’t bother to look into the other ones, except for a quick check. The websites used to obtain the annual reports were: http://www.annualreports.com/Company/facebook 

http://investor.apple.com/financials.cfm

http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsannual

https://www.netflixinvestor.com/financials/annual-reports-and-proxies/default.aspx

https://abc.xyz/investor/ and https://www.sec.gov/Archives/edgar/data/1288776/000128877614000020/goog2013123110-k.htm

Let’s start with a screenshot from the resulting graph first. Again, it’s clickable, although this time clicking doesn’t lead to the real 3D graph but will show a short movie (at our Youtube-channel) of the moving 3D-graph. Of course the real graph is also available. As it actually is an html-page it will be shown in your browser.

Front view FAANG 3D graph

(As always there are several options to move graph: clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.)

Some information about the process: After collecting all the necessary values, the parameter-line was set. Of course it mentionted the five companies and five years. After the 5,5 the stretch-factor was put to 5000 and the additional space to 20%. Probably 0 would have done as well. Then the font-size was put at 5 and because we wanted the legend to show labels, the three pieces of text were added after the font-size. So the full parameterline was like this:

5; 5; 5000; 20; 5; Revenue (Net Prof.); Equity; Total Liabilities

The values for each company in a single year were put in separate lines and this means we had 25 data-lines. Here they are (all values in millions of USD):

Facebook;2017;40653;15934;74347;10177;;
Facebook;2016;27638;10217;59194;5767;;
Facebook;2015;17928;3688;44218;5189;;
Facebook;2014;12466;2940;36096;3870;;
Facebook;2013;7872;1500;15470;2388;;
Apple;2017;229234;48351;134047;241272;;
Apple;2016;215639;45687;128249;193437;;
Apple;2015;233715;53394;119355;171124;;
Apple;2014;182795;39510;111547;120292;;
Apple;2013;170910;37037;123549;83451;;
Amazon;2017;177866;3033;27709;103601;;
Amazon;2016;135987;2371;19285;64117;;
Amazon;2015;107006;596;13384;52060;;
Amazon;2014;88988;-241;10741;43764;;
Amazon;2013;74452;274;9746;30413;;
Netflix;2017;11693;559;3582;15431;;
Netflix;2016;8831;187;2680;10907;;
Netflix;2015;6780;123;2223;7980;;
Netflix;2014;5505;267;1858;5185;;
Netflix;2013;4375;112;1334;4070;;
Google (Alph.);2017;110855;12662;152502;34793;;
Google (Alph.);2016;90272;19478;139036;28461;;
Google (Alph.);2015;74989;16348;120331;27130;;
Google (Alph.);2014;66001;14136;103860;25327;;
Google (Alph.);2013;55519;12733;86977;22073;;

The order is as in FAANG. Because the values were entered in an Excel-sheet and saved as an “MS-DOS csv” the separators are semi-colons. No decimal points were used in this case. The extra semi-colons at the end of each line are meaningless. How does the graph look? Well, you probably watched the video or looked at the real graph shown in your browser, but the a screenshot is shown again, because now we will discuss it:

Front view FAANG 3D graph

A couple of things are remarkable. Firstly, Apple is a real giant for several reasons. It has the highest revenue, highest profit and the second highest equity (after Alphabet / Google). Netflix is the opposite as it seems a dwarf. Why? Simply because its revenue, profit and equity are the smallest for the group and although Facebook’s revenue is not as impressive as Apple or Amazon either, its profit is much higher than Netflix’s for all the years. Let’s have a look from above in the next screenshot.

Top-front view of 3D graph FAANG

Now we can see the difference between Amazon and Alphabet/Google. The former has a really small profit (thin green roof) in comparison with the revenue, so the margin is quite low for Amazon and for those who are not colour-blind: the red roof means there was a loss in 2014! Alphabet/Google on the other hand, has rather thick green roofs, although Apple is invincible in absolute terms. If we look at the ratio of the green roof to the total height (the margin), then Facebook is even more impressive in 2017.

Another striking difference between Amazon and Alphabet/Google is the ratio of equity (width of the building) and total liabilities (depth of the building). Amazon has a rather normal gearing with the liabilities being about four times the equity being about, but for Alphabet/Google it’s the other way round! It has hardly any debt at all (well, that’s an exaggeration, but still). Facebook looks more like Alphabet/Google than like Amazon, on comparing their gearing.

Remember that 2017 is in the front and see how the revenue for Amazon and Alphabet/Google grew over the years. It’s not the perspective of the graph that makes the building of the older years look smaller. Their revenue – and equity – was really lower at the beginning as we can see from aside.

Right-side view of 3D graph FAANG

The huge buildings in the background are Apple – covering Facebook completely and Netflix is hardly visible anyway. Amazon’s equity grew, but the liabilities too. For Alphabet/Google, the liabilities remained as small as they were in 2013. Flipping the graph to the other side, we can see Facebook.

Left-side view of 3D-graph FAANG

Again, Apple is a big wall in the background, but now we can see Facebook showed in impressive growth for revenue, profit, equity and liabilities.

That’s it for now. I hope the FAANG-visualisation provides a better understanding about the differences and similarities (from a financial point of view of course) of the companies behind the acronym. The screenshots and comments are nothing more than suggestions. Please try and discover yourself by looking at the real 3D-graph as a screenshot is only a poor extract of the so much richer original.

A free demo is available. It is fully functional, but will only process one data-line and therefore only one building will be in the graph. It can be used to get acquainted with the generator before purchasing a full licence.

Of course we are happy to provide licences for the full version of the generator. It’s quite affordable as it is still a one-off payment for companies that are willing to become an early partner (EUR 450 ex VAT for 2017). Contact us at info@anrep3d.com  or have a look at our company’s website first.

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About AnRep3D

AnRep3D is the new company, founded after the handover of Scientassist (together with VRBI) to one of my sons. From now I will focus on three-dimensional graphs for the financial markets, showing the main figures from annual reports in comparison.
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