70.2K

Verified Solution

Link Copied!

Recently, Uber released its financial statements for the year ended Dec 31 2021 (Appendix A). Uber showed a loss of $570 million on sales of 17.455 billion. Some analysts are quick to blame Covid-19 for this loss, but others pointed to bigger long-term issues and reminded investors that Uber has consistently lost money over the past few years, and generated a loss of $8.5 billion on sales of 13.0 billion in 2019 (a year before Covid, also known as the- before-times). For simplicity purposed, assume the following cost structure: Cost of Revenues and Operations & Support expenses are all variable Sales and Marketing, R+D, General + Administrative, and Depreciation + Amortization expenses are all fixed. Interest Expense, Other income (expense), and tax and loss from equity method can be ignored for this analysis 1. Based on the financial information in Appendix A, how much would revenues have to have been in 2021 in order for Uber to break even? 2. What level of Revenue would Uber need to have reached in 2021 to make a profit of $2 billion. 3. What percentage increase would Contribution Margin need to increase in order for Uber to break-even on Revenues of $19 billion (assuming that fixed costs do not change)? 611 UBER TECHNOLOGIES, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share amounts which are reflected in thousands and per share amounts) (Unaudited Three Months Ended December 31, Year Ended December 31, 2020 2021 2020 2021 Revenue 3.165 5.778 $ 11139 $ 17.455 Costs and expenses Cost of revenue, exclusive of depreciation and amortization shown separately below 1441 3104 5.154 9,351 Operations and support 369 547 1819 1.877 Sales and marketing 1038 1.262 3.583 4789 Research and development 483 558 2205 2054 General and administrative 531 2666 2316 Depreciation and amortization 180 246 575 902 Total costs and expenses 4042 6328 16.002 21.289 Loss from operations (877) (550) (4863 (3,834) Interest expense (118) (130) (458) (483) Other income (expense), net 63 1471 1625 3.292 Income doss) before income taxes and loss from equity method investments (932) 791 (6945) (1,025) Provision for benefit from) income taxes 23 (97) (192) (492) Loss from equity method investments (9) (34) (37) Net income (loss) including non-controlling interests (962) 879 (6.788) (570) Less: net income (los) attributable to non- controlling interests, net of tax (13) (20) (74) Net income (loss) attributable to uber Technologies, Inc (968) 892 $ (6768) (496) Net income (loss) per share attributable to Uber Technologies, Inc. common stockholders Basic (054) 0.46 (386) $ (0.26) Diluted (054) $ 0445 (3.86) $ (0.29) Weighted-average shares used to compute net income (loss) per share attributable to common stockholders Basic 1.793,084 1936,736 1752.960 1,892,546 Diluted 1.793,084 2005.591 2.752 960 1.895,519

Answer & Explanation Solved by verified expert

See Answer