I. Some of the account balances of Mali Company at December 31, 20x0 are shown below: 6% Preferred Stock ($100 par, 2,000 shares authorized) $ 20,000 PCIEP, Preferred 3,000 Common Stock ($10 par, 100,000 shares authorized) 500,000 PCIEP, Common 100,000 Retained Earnings 304,000 Treasury Stock-Preferred (50 shares at cost) 5,500 Treasury Stock-Common (1,000 shares at cost) 16,000 The price of the company’s common stock has been increasing steadily on the market; it was $21 on January 1, 20x1, advanced to $24 by July 1, and to $27 at the end of the year 20x1. The preferred stock was not openly traded, but was appraised at $120 per share during 20x1. 1) Give the proper journal entries for each of the following occurred in 20x1: (1) The company resold the 50 shares of preferred stock held in the treasury for $116 per share. (2) On July 1, the company declared a 5% stock dividend to the common stockholders. (3) On October 15, the company declared a cash dividend of $100,000. Assume the preferred stock is non-cumulative. Prepare two separate journal entries: common and preferred dividends. 2) Prepare the stockholders’ equity section of the balance sheet at December 31, 20x1

Netgear has no debt, a market value of equity of $1.43 billion, $361 million of cash, and an equity Beta of 2.0. Meanwhile, Westar Energy has $4.02 billion of debt, a market value of equity of $7.16 billion, only $3.36 million of cash, and an equity Beta of 0.33.

Thus these two publicly traded firms have very different capital structures. Netgear is profitable and has been for the last decade; however, the firm’s management appears to be quite averse to debt, while the opposite can be stated for Westar Energy. Is the management of Netgear ignorant of the tax benefits of debt or does something else drive their decision to have no debt? How can one explain the sharp difference in capital structure between these two firms?

Write a C# program that prints a calendar for a given year. Call this program calendar. The program prompts the user for two inputs:
      1) The year for which you are generating the calendar.
      2) The day of the week that January first is on, you will use the following notation to set the day of the week:
    
      0 Sunday                     1 Monday                   2 Tuesday                   3 Wednesday
      4 Thursday                 5 Friday                      6 Saturday

Your program should generate a calendar similar to the one shown in the example output below. The calendar should be printed on the screen. Your program should be able to handle leap years. A leap year is a year in which we have 366 days. That extra day comes at the end of February. Thus, a leap year has 366 days with 29 days in February. A century year is a leap year if it is divisible by 400. Other years divisible by 4 but not by 100 are also leap years.

Example: Year 2000 is a leap year because it is divisible by 400.  Year 2004 is a leap year because it is divisible by 4 but not by 100.
Your program should clearly describe the functionality of each function and should display the instructions on how to run the program.

Your need to create one method “displayMonth” for print each month as required. You can choose return method or not that depend on your design.

Sample Input:

Enter the year for which you wish to generate the calendar: 2004
Enter the day of the week that January first is on: 4

Sample output:

Calendar for year 2004

January
Sun      Mon     Tue      Wed     Thu      Fri        Sat
                                                1          2          3
4          5          6          7          8          9          10
11        12        13        14        15        16        17
18        19        20        21        22        23        24
25        26        27        28        29        30        31

February
Sun      Mon     Tue      Wed     Thu      Fri        Sat
1          2          3          4          5          6          7
..         ..          ..          ..          ..          ..          ..
..          ..

Question Three (3) [20 Marks]

a) The Memorandum of Incorporation (MOI) as well as the Articles of Associations (AOA) serve as
founding documents for a company; describe the purpose as well as differences between each of
these two documents.

b) Describe the process as set out in terms of the Companies Act 28 of 2004 from whence a
company is founded, the founding documents, the parties involved up until the entity is clothed
with legal personality and opens for business.

c) Which parties would actively be involved in the day to day running of a company?

2. It is a shiny morning, you are landing at Guarulhos Airport in Sao Paulo, Brazil. Sambapati, a very well-known Brazilian corporation has hired you as consultant for determining its cost of capital.   During the next following weeks, you are very busy in meetings, and doing financial modeling. One of your main concerns is that Sambapati is not a publicly traded company.

After some thinking you decide to go ahead and run a multiple regression analysis.   You have the following variables in your model:

                Sambapati Quarterly Earnings (SPTE)

                Sambapati Quarterly ROE (SPTROE)

                S&P Companies Quarterly Earnings (SPE)

                Bovepsa* Companies Quarterly Earnings (BOVE)

                               *Bovepsa is the Brazilian stock index

                Price to Book Ratio of the SP 500 Companies (PBSP)

You run the regression in STATA with 20 quarters of data.

At the end you produce the following model:

                               SPTE= 0.59 + 4.56 (SPE) – 3.45 (SPTROE) + 2.85 (BOVE) - 1.38(PBSP)

Required:

1. Interpret the meaning of each one of the coefficients of this model

Question text

Analysis and Interpretation of Profitability
Balance sheets and income statements for 3M Company follow.

(a) Compute net operating profit after tax (NOPAT) for 2007. Assume that the combined federal and statutory rate is: 35.9% (Round your answer to the nearest whole number.)
2007 NOPAT =Answer($ millions)

(b) Compute net operating assets (NOA) for 2007 and 2006. Treat noncurrent Investments as a nonoperating item.
2007 NOA =Answer($ millions)
2006 NOA =Answer($ millions)

(c) Compute 3M's RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2007. (Round your answers to two decimal places. Do not round until your final answer. Do not use NOPM x NOAT to calculate RNOA.)

2007 RNOA =Answer%
2007 NOPM =Answer%
2007 NOAT =Answer

(d) Compute net nonoperating obligations (NNO) for 2007 and 2006.
2007 NNO =Answer($ millions)
2006 NNO =Answer($ millions)

                                     SPOOL output.log

DROP TABLE Customers CASCADE CONSTRAINT;

DROP TABLE Orders CASCADE CONSTRAINT;

DROP TABLE Products CASCADE CONSTRAINT;

DROP TABLE Distributors CASCADE CONSTRAINT;

DROP TABLE Catalogs CASCADE CONSTRAINT;

DROP TABLE Rentals CASCADE CONSTRAINT;

CREATE TABLE Customers (
Customer_id NUMBER(10) NOT NULL,
CustomerFirst_name VARCHAR(20) NOT NULL,
CustomerLast_name VARCHAR(20) NOT NULL,
CustomerStreet_address VARCHAR(30) NOT NULL,
CostumerCity VARCHAR(20) NOT NULL,
CustomerState CHAR(2) NOT NULL,
CostumerZip VARCHAR(9) NOT NULL,
CustomerPhone_number VARCHAR(12) NOT NULL,
CONSTRAINT Customer_PK PRIMARY KEY (Customer_id));

--Customers
INSERT INTO Customers (Customer_id, CustomerFirst_name, CustomerLast_name, CustomerStreet_address, CostumerCity, CustomerState,
CostumerZip, CustomerPhone_number) VALUES ('100', 'Ben', 'Bill', '201 Ash Street', 'San Silva', 'MD', '20850', '443-123-4567');
INSERT INTO Customers (Customer_id, CustomerFirst_name, CustomerLast_name, CustomerStreet_address, CostumerCity, CustomerState, CostumerZip,
CustomerPhone_number) VALUES ('101', 'James', 'Seth', '142 Athens Avenue', 'Silver Boro', 'MD', '20841', '443-230-4444');
INSERT INTO Customers (Customer_id, CustomerFirst_name, CustomerLast_name, CustomerStreet_address, CostumerCity, CustomerState,
CostumerZip, CustomerPhone_number) VALUES ('200', 'Victor', 'Jones', '124 Flower Street', 'Rockville','MD', '20857', '301-547-2036');
INSERT INTO Customers (Customer_id, CustomerFirst_name, CustomerLast_name, CustomerStreet_address, CostumerCity, CustomerState, CostumerZip,
CustomerPhone_number) VALUES ('300', 'Ashley', 'Maverick', '105 University Boulevard', 'Baltimore', 'MD', '21593', '228-567-8174');
INSERT INTO Customers (Customer_id, CustomerFirst_name, CustomerLast_name, CustomerStreet_address, CostumerCity, CustomerState, CostumerZip,
CustomerPhone_number) VALUES ('450', 'Bill','Booker', '208 New Hampshire Avenue', 'Wheaton', 'MD', '20103', '250-413-7020');

CREATE TABLE Orders(
Order_id NUMBER(10) NOT NULL,
OrderDate DATE DEFAULT SYSDATE,
CONSTRAINT Order_PK PRIMARY KEY (Order_id));

-- Order
INSERT INTO Orders (Order_id, OrderDate) VALUES ('1', TO_DATE('02/05/2007','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate) VALUES ('2', TO_DATE('2/20/2011','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate) VALUES ('3', TO_DATE('02/05/2003','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate) VALUES ('4', TO_DATE('02/05/2005','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('5', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('6', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('7', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('8', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('9', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('10', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('11', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('12', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('13', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('14', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('15', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('15', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('16', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('17', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('18', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('19', TO_DATE('02/05/2006','MM/DD/YYYY'));
INSERT INTO Orders (Order_id, OrderDate)VALUES ('20', TO_DATE('02/05/2006','MM/DD/YYYY'));

CREATE TABLE Products (
Product_id NUMBER(10) NOT NULL CONSTRAINT Product_PK PRIMARY KEY,
ProductDescription VARCHAR2(50),
ProductMovieType varchar(11),
Order_id NUMBER(10) NOT NULL
CONSTRAINT Product_FK REFERENCES Orders (Order_id));

-- Product
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('1', 'Beauty and the Beast', 'Romance','6');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('2', 'Mist', 'Thriller','7');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('3', 'Police Academy', 'Comedy','8');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('5', 'When Sally met Harry', 'Romance','9');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('6', 'Rambo', 'Action','10');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('7', 'Rambo', 'Action','10');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('8', 'Rambo', 'Action','10');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('9', 'Rambo', 'Action','10');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('10', 'Rambo', 'Action','10');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('11', 'Rambo', 'Action','10');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('12', 'Beauty and the Beast', 'Romance','6');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('13', 'Mist', 'Thriller','7');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('14', 'Police Academy', 'Comedy','8');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('15', 'When Sally met Harry', 'Romance','9');
INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('16', 'Rambo', 'Action','10');

CREATE TABLE Distributors (
DistributorDisc_id NUMBER(11,0) NOT NULL,
DistributorPrice NUMBER(11,0) NOT NULL,
DistributorOrderQuantity NUMBER(11),
Order_id NUMBER(10) NOT NULL,
CONSTRAINT Distributor_PK PRIMARY KEY (DistributorDisc_id) ,
CONSTRAINT Distributor_FK FOREIGN KEY (Order_id) REFERENCES Orders (Order_id));

-- Distributor
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('1', '5','10', '11');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('2', '5','10', '12');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('3', '15','10','13');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('4', '5','10', '14');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('5', '5','10', '15');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('6', '5','10', '15');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('7', '5','10', '15');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('8', '5','10', '15');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('9', '5','10', '15');
INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('10', '5','10', '15');

CREATE TABLE Catalogs (
Catalog_id NUMBER(5,0) NOT NULL,
CatalogRating VARCHAR(10) NOT NULL,
CatalogAcademyAwards VARCHAR(50) NOT NULL,
CatalogDateReleased DATE DEFAULT SYSDATE,
Product_id NUMBER(10) NOT NULL,
Order_id NUMBER(10) NOT NULL,
DistributorDisc_id NUMBER(11,0) NOT NULL,
CONSTRAINT Catalog_PK1 PRIMARY KEY (Catalog_id),
CONSTRAINT Catalog_FK1 FOREIGN KEY (Order_id) REFERENCES Orders (Order_id),
CONSTRAINT Catalog_FK2 FOREIGN KEY (Product_id) REFERENCES Products (Product_id),
CONSTRAINT Catalog_FK3 FOREIGN KEY (DistributorDisc_id) REFERENCES Distributors (DistributorDisc_id));

-- Catalog
INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
VALUES ('1', 'Rated R','2',TO_DATE('02/05/2000','MM/DD/YYYY'),'7','16','6');
INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
VALUES ('2', 'Parental Guide', '12', TO_DATE('02/05/2001','MM/DD/YYYY'),'8','17','7');
INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
VALUES ('3', 'Youth','3',TO_DATE('02/05/2002','MM/DD/YYYY'), '9','18','8');
INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
VALUES ('4', 'Everyone','8', TO_DATE('02/05/2003','MM/DD/YYYY'),'10','19','9');
INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
VALUES ('5', 'Preschool','9',TO_DATE('02/05/2004','MM/DD/YYYY'),'11','20','10');

CREATE TABLE Rentals(
Rental_id NUMBER(9) NOT NULL,
RentalReturnDate DATE DEFAULT SYSDATE,
RentalRentedQuantity VARCHAR(2) NOT NULL,
RentalTotal_charge NUMBER(19,4) NOT NULL,
RentalTax NUMBER(19,4) NOT NULL,
Product_id NUMBER(10) NOT NULL,
CONSTRAINT Rental_PK PRIMARY KEY(Rental_id),
CONSTRAINT Rental_FK FOREIGN KEY(Product_id) REFERENCES Products(Product_id));
-- Rental
INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
VALUES ('1', TO_DATE('04/05/2009','MM/DD/YYYY'), '35','17.99', '0.3','11');
INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
VALUES ('2', TO_DATE('03/04/2001','MM/DD/YYYY'), '34','17.99', '0.3','12');
INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
VALUES ('3', TO_DATE('04/03/2002','MM/DD/YYYY'), '33','17.99', '0.3','13');
INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
VALUES ('4', TO_DATE('04/01/2003','MM/DD/YYYY'), '32','17.99', '0.3','14');
INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
VALUES ('5', TO_DATE('04/03/2004','MM/DD/YYYY'), '31','17.99', '0.3','15');

SPOOL OFF;

Error message

             *
ERROR at line 1:
ORA-00955: name is already used by an existing object

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('1', 'Beauty and the Beast', 'Romance','6')
                                                                                                                        *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('2', 'Mist', 'Thriller','7')
                                                                                                        *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('3', 'Police Academy', 'Comedy','8')
                                                                                                                  *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('5', 'When Sally met Harry', 'Romance','9')
                                                                                                                        *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('6', 'Rambo', 'Action','10')
                                                                                                         *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('7', 'Rambo', 'Action','10')
                                                                                                         *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('8', 'Rambo', 'Action','10')
                                                                                                         *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('9', 'Rambo', 'Action','10')
                                                                                                         *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('10', 'Rambo', 'Action','10')
                                                                                                          *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('11', 'Rambo', 'Action','10')
                                                                                                          *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('12', 'Beauty and the Beast', 'Romance','6')
                                                                                                                         *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('13', 'Mist', 'Thriller','7')
                                                                                                         *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('14', 'Police Academy', 'Comedy','8')
                                                                                                                   *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('15', 'When Sally met Harry', 'Romance','9')
                                                                                                                         *
ERROR at line 1:
ORA-01722: invalid number

INSERT INTO Products (Product_id, ProductDescription, ProductMovieType, Order_id) VALUES ('16', 'Rambo', 'Action','10')
                                                                                                          *
ERROR at line 1:
ORA-01722: invalid number

CREATE TABLE Distributors (
             *
ERROR at line 1:
ORA-00955: name is already used by an existing object

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('1', '5','10', '11')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('2', '5','10', '12')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('3', '15','10','13')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('4', '5','10', '14')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('5', '5','10', '15')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('6', '5','10', '15')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('7', '5','10', '15')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('8', '5','10', '15')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('9', '5','10', '15')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

INSERT INTO Distributors (DistributorDisc_id, DistributorPrice, DistributorOrderQuantity, Order_id) VALUES ('10', '5','10', '15')
*
ERROR at line 1:
ORA-00001: unique constraint (CM320P17.DISTRIBUTOR_PK) violated

CREATE TABLE Catalogs (
             *
ERROR at line 1:
ORA-00955: name is already used by an existing object

INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.CATALOG_FK2) violated - parent key
not found

INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.CATALOG_FK2) violated - parent key
not found

INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.CATALOG_FK2) violated - parent key
not found

INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.CATALOG_FK2) violated - parent key
not found

INSERT INTO Catalogs (Catalog_id,CatalogAcademyAwards,CatalogRating, CatalogDateReleased, Product_id, Order_id, DistributorDisc_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.CATALOG_FK2) violated - parent key
not found

CREATE TABLE Rentals(
              *
ERROR at line 1:
ORA-00955: name is already used by an existing object

INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.RENTAL_FK) violated - parent key not
found

INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.RENTAL_FK) violated - parent key not
found

INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.RENTAL_FK) violated - parent key not
found

INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.RENTAL_FK) violated - parent key not
found

INSERT INTO Rentals (Rental_id, RentalReturnDate, RentalRentedQuantity, RentalTotal_charge, RentalTax, Product_id)
*
ERROR at line 1:
ORA-02291: integrity constraint (CM320P17.RENTAL_FK) violated - parent key not
found

In May 2005, FACEBOOK was in use at over 800 colleges and universities and received $12.7 million in investment from venture capital firm Accel Partners. 4 High school and international school networks were added in the fall of 2005. By year’s end, Facebook had achieved $9 million in revenue and accumulated six million monthly active users (MAUs). 5 The following year was another strong one for the company. In addition to launching Facebook Mobile, it hit 12 million MAUs and earned $48 million in revenue. In April of 2006, Greylock Partners, Meritech Capital Partners, and PayPal co-founder Peter Thiel invested $27.5 million in Facebook. By September, anyone with a verifiable e-mail address could sign up, which paved the way for exponential user growth. More features were added over the next several years to further enhance the site’s user functionality, including a developer platform, chat capabilities, the Like button, and an e-commerce payment feature, among other things. The global footprint Facebook had achieved by 2012 was astronomical. Facebook tracks the number of monthly active users (MAUs) and daily active users (DAUs) as a means to assess users’ engagement. Users who have logged into Facebook within a 30-day period are counted as monthly active users. In the same way, daily active users measure the number of users who have logged in within a 24-hour period. In addition to 1.06 billion monthly active users (MAUs), Facebook had 618 million daily active users (DAUs), a 30 percent increase over December 2011. Exhibit 1 shows the MAUs, DAUs, and mobile MAUs from 2009 to 2012. Approximately 80 percent of the site’s users live outside the U.S. and Canada, and the website is available in more than 70 languages. 6 Globally, there were, on average, 2.7 billion likes and comments per day and over 100 billion friend connections by the end of 2011. In 2012, Facebook brought in $5.09 billion in sales, a 37 percent increase over 2011 ( Exhibit 3 ). The company generated 84 percent of its revenue through advertising services and collected the rest through social gaming fees charged to platform developers. Facebook’s ad revenues are predicted to rise to $7.64 billion in 2014 (see Exhibit 4 ), but there is still plenty of room for Facebook to grow. 9 Google and Yahoo make nearly $88 per user of their search engines, whereas Facebook makes only $15 per user account. Mark Zuckerberg’s Graph Search announcement on January 15, 2013, launched the third pillar of Facebook’s social ecosystem. The three pillars consist of News Feed, Timeline, and Graph Search.  NEWS FEED Released in September 2006, News Feed quickly became a core feature of Facebook. It is at the heart of a user’s homepage and provides regular updates of friends’ posts, photos, events, group memberships, and so on. TIMELINE An updated version of the profile page, called Timeline, was launched in September 2011. It allows each user to paint a complete life story on his or her profile. Users can select what information to share and with whom to share it.  GRAPH SEARCH Zuckerberg calls the network of connections between people the social graph. Facebook, as a product, is an attempt to map the global social graph in the form of a massive database. Graph Search is a search bar that hovers at the top of every Facebook page.

CREATING VALUE FOR DEVELOPERS Approximately 15 percent of Facebook’s revenue is generated through its developer platform, which was first launched in May 2007 with 85 developers and 65 apps. 49 The platform is a set of development tools and application programming interfaces (APIs) that enables software and web developers to create innovative experiences for the Facebook community. Facebook’s f8 conferences, held near-annually, bring together developers, entrepreneurs, and innovators to collaborate on new websites, apps, and devices that take advantage of the Facebook platform. 50 Zynga, creator of the game FarmVille and many other wildly popular games, is currently the largest developer; the fees collected from Zynga accounted for 12 percent of Facebook’s revenue in 2011, but declined in 2012 51 as the popularity of Zynga’s games declined. 52 Other examples of developer integration using the platform include the ability for users to listen to music on Spotify, read news and sports Through products such as Open Graph, Social Plugins, and Payments, Facebook offers significant value to developers.

Facebook’s Initial Public Offering (IPO) Facebook’s IPO on May 18, 2012, was one of the largest in U.S. history, dwarfing even that of Google in 2004. 85 With an IPO price set at $38 per share, Facebook was valued at $104 billion and planned to raise approximately $18.4 billion through its IPO. 86 Facebook valuations historically have been optimistic. Before its IPO, Facebook was valued by several companies—Yahoo offered $1 billion for the company, Microsoft invested in October 2005 at a valuation of $15 billion, Accel Partners sold its stake at a $35 billion valuation in November 2010, and Goldman Sachs led funding at a $50 billion valuation in January 2011. These valuations and the hype around Facebook’s IPO made it one of the most anticipated public offerings to date (see Exhibit 13 ). In 2011, Facebook had earned $3.71 billion in revenue and $1 billion in net income. These recent earnings, combined with Facebook’s lofty valuation, equated to a high P/E of 104 for Facebook. In comparison, other large-cap NASDAQbased companies have much lower P/Es: Apple has a ratio of 18.2, Google sits at 21.33, and Microsoft is at 11.33. To match these expectations, Facebook knew it would have to grow its earnings quickly in 2013 and beyond.

UNDER SCRUTINY Discussions over the declining stock prices put Morgan Stanley, the NASDAQ exchange, and Facebook executives under great public scrutiny. Morgan Stanley and Facebook’s CFO have been criticized for making changes to the price and number of shares just before the offering. These shares and prices were set at the far upper end of the limit for the company. 93 As a result, the NASDAQ faces a review of its systems and procedures by the SEC. 94 Perhaps the sharpest criticism may have been offered against Mark Zuckerberg, whom many have perceived as an untested CEO.

DEFENSIVE MEASURES After a disappointing start, concerns about Facebook’s stock price deepened in the fall of 2012, as investors prepared for the release of a large portion of public shares scheduled to hit the market in late November (see Exhibit 15 ). Zuckerberg and other company executives had indicated on September 5, 2012, that they would not sell more shares than were necessary to cover their tax liabilities. This measure was taken as a statement of faith in the company’s future. Facebook also sought to protect its stock prices by buying back 101 million shares before the lockup periods expired and more shares become available for sale.

A New Business Model? Facebook’s IPO has put tremendous pressure on Sandberg and the Facebook team to come up with a strategy to justify Facebook’s $100 billion valuation in the stock market. Sandberg needs to come up with a business model that will generate sufficient income to justify this valuation. She sees competitors like LinkedIn using a combination of freemium and subscription business models. Google’s revenue stream, in contrast, relies on advertising more than anything else; it generates $88 in advertising revenue per user. 102 For Facebook to follow such a path, it would need to increase its advertising revenue per user, which currently sits at $15, substantially. Facebook is also pushing to expand to other countries. These markets have vast numbers of potential users, but revenues per user are lower than in the U.S. Can the market size make up for the lower per-user revenues? What effect might local competitors have in foreign markets? And what about Instagram? Is there a way to monetize that acquisition to a larger degree? Are there other acquisitions that Facebook should make? Sandberg remembers how quickly MySpace lost its first-mover advantage after focusing too much on monetization. She wants to ensure that Facebook does not encounter a similar fate. The clock is ticking. What business model and monetization strategy should she propose?

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