FINM Assignment 1.1. Calculate leverage ratios (debt/total assets and debt/equity) for Facebook over the last 8 years (31 December 2012 to 31 December XXXXXXXXXXComment on the ratios. 2.7. Estimate...

FINM Assignment
1.1. Calculate leverage ratios (debt/total assets and debt/equity) for Facebook over the last 8 years (31 December 2012 to 31 December 2019). Comment on the ratios.
Leverage ratios measures overall debt position with reference to the equity. These ratios are also referred to assess the true value of the business.
Debt to Equity Ratio: In the initial years of operation, there was high debt to equity ratio say in 2010 it was 38.30% , it started reducing till 2016 , as debts were paid off drastically. This is due to increase in revenue. From 2016 this ratio started to accelerated, because of company has taken debt to expand, investments in software and land. For the year 2019 it stands at 31.98% . Approx 32% of the equity is covered by debt. Anything more than 50% of the debt equity is dangerous to the company in terms of solvency.
Debt to Total Assets: In 2010 it was 15.82% which reduced drastically to...