Google Financial Analysis Essay

Sumit Das-Assignment 2

Financial Ratio Analysis-Google Corporation

Sumit

3/12/2013

Contents

Objective of Study2

Analysis of Auditors Report2

Common Size Ratio Analysis3

Analysis of Liquidity Ratios4

Analysis of Leverage ratios5

Analysis of Efficiency Ratios6

Analysis of Profitability Ratios7

Analysis of Effectiveness/Market Performance Ratios8

Summary9

Current Rate (2011)9

Common Collection Period9

Debt Ratio9

Accounts Payable turnover10

Major Profit Margin10

Return upon Assets10

Recommendations11

Objective of Study

Economical ratio examination is a very important element of fundamental analysis process. Working through number in a financial affirmation can be very hard for any monetary analyst. Operating through ratios gives us the opportunity to work through the economical analysis in a really well put manner. Financial ratios help us to view financial conditions relative to additional financial conditions and thus present more meaningful and beneficial information intended for the company and its investors. The purpose of this research will be to determine most relevant percentages for Google Corporation and analyse these to come for some conclusions about the current financial situation of the firm. Google Firm is a technology company. Their business is principally focused in the following important areas: search, advertising, systems and programs, and venture (SEC). With this analysis we will be using Ms as a standard company and companies just like Yahoo and AOL to calculate the industry uses. Financial ratios are divided into different categories like success, liquidity and so forth Each category discusses a particular aspect of the financial health of the organization. Along with the standard ratios we all will also compute some ratios that give us some useful insights concerning Google Corporation. Once the proportions are calculated we conduct three various kinds of analysis to them which are * Time Series(2004-2011)

* Combination Sectional(2010-2011)

2. Peer Benchmarking(2010-2011)

Analysis of Auditors Survey

The economic statements of Google Organization for the year 2011 were audited by Ernst and Small LLP. The audit was conducted relative to the standards with the Public Accounting Oversight Board (United States) which need internal control to be preserved over all economical statements. In line with the report the financial transactions provided by Yahoo Corporation present a fair rendering of the financial circumstances of the company. And the consolidated results supplied are in conformity together with the generally acknowledged accounting guidelines. Thus the report expressed an unqualified opinion on the financial statement releases by Google Corporation. Common Size Ratio Research

On analysing the salary state you observe that via 2010 to 2011 the web income of Google Corporation increased via around almost 8. 5 billion to around 9. 7 billion dollars. However a vertical prevalent size analysis shows that the internet income like a percentage in the total income fell coming from 29. 01 % to 25. 67 %, even though the cost of earnings also droped from thirty-five. 53% to 34. 79%. The decline in net income as a percentage with the total earnings can be party attributed to the increase in the R and d expense and increase in the sales and marketing expense. The research and development expenditure during this period showed an increase via 12. 83 % to 13. 82 %. Also the potential expense confirmed an increase via 9. 55% to doze. 11 %. The quite substantial embrace these two things resulted in the decrease in the net income as being a percentage of the total income. Also throughout the same period both sales and marketing expense (from 21. one hundred fifty five to 19. 93%) and research and development expenditure (from 13. 95% to 12. 93%) as a percentage of the total revenue to get the benchmark company Ms showed a decrease. Both of these trends present that the organization is getting more aggressive towards these...

Bibliography: Investopedia. (n. d. ). Retrieved via http://www.investopedia.com/university/ratios/liquidity-measurement/ratio4.asp#axzz2N8cU2Qed

SEC. (n. deb. ). Recovered from http://www.sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm#toc260164_2

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