Economic and financial analysis of PayPal Holdings, Inc

Treball Final de Grau en Finances i Comptabilitat. Codi: FC1049. Curs acadèmic: 2019-2020 The online commerce sector is taking more and more importance in our lives, its growth in recent years has been exponential and some companies have created methods to make money transactions in these markets by working as financial intermediaries, even to have the power of large traditional banks. The main objective of this study is to carry out a valuation of a company to analyse its evolution over time and the state of its financial accounts, with the intention that this work can serve to improve the organisation or from an investor's point of view to value the company. The company analysed in this work is PayPal Holdings which is a young company with great growth and great expectations for the future that operates in the online payment sector and, on which a financial and economical analysis will be carried out. The first part of the study describes the history of the company, its characteristics and the market in which it operates. Next, the balance sheet of the company PayPal Holdings is analysed horizontally and vertically, in such a way that the evolution of the value of each item of the balance sheet in the horizontal analysis and the importance of each of these items with respect to the total value in the vertical analysis can be observed in detail. In the second part of the work, an analysis is made of the different ratios that determine the financial status of the company, starting with the liquidity ratios to evaluate its ability to face up to short-term debts, followed by the solvency ratios, to see if the company can face up to its debts in general and the profitability ratios that measure the company's ability to generate profits. In this second part of the work, an analysis of the share price is also carried out to see how the company performs in the stock market. Finally, a comparative analysis is made between the company PayPal and Visa using the ratios calculated above as a reference. A financial analysis is a necessary tool for any economic activity, both for the company itself, which can use this data to self-evaluate and improve its decision-making for the future, and for an investor who can use this analysis as a reference to evaluate the state of the company and whether it is advisable to invest in it or not.