Google Inc.
Google Inc. is an American multinational corporation. Its main
focus is on improving the ways people use the I...
hardware and software, which includes computers (tablets),
phones, and search engines.
In 2011, 96 % of Google’s revenue w...
Acid Test ratio (Quick ratio) = Current assets – inventory
Current Liability
2010 41,562 – 9.0 = 4.16 2011 52758 – 35 = 5....
2012 50,175 = 4234.2
11.85
Total assets turnover Sales
Total assets
2010 29,321 = 506.85 2011 37,905 = 522.32
57.85 72.57
...
(Interest Coverage Ratio) EBIT (Earning Before int. & Taxes
Annual Interest Exp.
2010 10.80 = 2.16 2011 12.38 = 0.213
5 58...
Return on Total Assets Net Income
Total Assets
2010 8,505,000 = 147.07 2011 9,737,000 = 128.84
57,851 75,574
2012 10,737,0...
Investor Relations
Investor Relations is a strategic management responsibility that integrates
finance, communication, mar...
Conclusion
Google has several strengths which makes it the industry leader for Internet
searches. Due to its name, the fac...
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Google inc

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Google inc

  1. 1. Google Inc. Google Inc. is an American multinational corporation. Its main focus is on improving the ways people use the Internet-related services and products. These services include search, cloud computing, software and online advertising technologies. Google’s primary businesses key areas are search, advertising, operating systems and platforms, enterprise and hardware development. Google was rated number 92 among the Forbes Fortune 500 companies, and is considered on of the best companies to work for in 2012. Per Google’s Form 10-K their mission is to organize the world’s information and make it universally accessible and useful. Our innovations in web search and advertising have made our website a top internet property and our brand one of the most recognized in the world.” Google was founded by Larry Page and Sergey Brin while Ph.D. students at Stanford University. The corporation was incorporated as a privately held company on September 4, 1989, in California. It was reincorporated in Delaware in August 2003. An initial public offering followed on August 19, 2004. The corporation Class A common stock is listed on the NASDAQ Global Select Market under the symbol “Goog.” The corporate headquarter are located at 1600 Amphitheatre Parkway, Mountain View, California. Google Inc. is in the internet technology industry it is ranked seventeenth out of twenty-seven Internet Information Providers (Y Charts, 2011). This industry is on of the fast growing industry in the world, with new technology being developed everyday. With technology of developing better
  2. 2. hardware and software, which includes computers (tablets), phones, and search engines. In 2011, 96 % of Google’s revenue was derived from its revenue from its advertising programs. From 2010 to 2012 Google’s revenues have increased by more than 40 percent, as well as their stockholder equity. Liquidity Ratio Liquidity Ratio – Measures the availability of cash to pay to pay the company’s debt. Google’s liquidity indicates that the company is able to meet all of the current liabilities. Google liquidity is above the industry average of 2.0. The reason why the liquidity rate dropped in 2012 t was due to the purchase of Motorola Mobility Inc, the launch of Google Play, and the Nextus 7 Tablet. The company started manufacturing and selling hardware this required additional liabilities. Even with the additional asset acquisitions the companies’ liquidity is still very good. Based on the analysis of all three years the company has maintained a liquidity ratio well above the industry average of 2.0. Liquidity Ratio: Current Assets = Current ratio (Working Capital Ratio Current Liabilities (in millions) 2010 41,562 = 4.16 2011 52,758 = 5.92 9,996 8,913 2012 60,454 = 4.21 14,337
  3. 3. Acid Test ratio (Quick ratio) = Current assets – inventory Current Liability 2010 41,562 – 9.0 = 4.16 2011 52758 – 35 = 5.92 9996 8913 2012 60,454 – 505 = 4.18 14,337 Asset Management Asset Utilization Asset Management is how the company is managing its assets. Asset utilization by Google is below industry is below the industry average. The inventory turnover ratio is not applicable to Google, as they did not have any tangible inventory until 201. Google’s fixed asset turnover ratio, or how effectively Google utilizes its plants and equipment which up until 2012 they had very few of. Google receives 96 percent from advertising and sale of memberships to it internet sites. Based on research on the company’s other asset ratios we have examined indicate that the company is on solid and there are no wild fluctuations in its assets ratio. Investor Relations Investor Relations is how Fixed Asset turnover Sales Net Fixed assets 2010 29,321 = 3778.5 2011 37,905 = 3,948 7.6 9.6
  4. 4. 2012 50,175 = 4234.2 11.85 Total assets turnover Sales Total assets 2010 29,321 = 506.85 2011 37,905 = 522.32 57.85 72.57 2012 50,175 = 539.01 93.08 Debit Management Ratio Debt ratios quantify the firm’s ability to repay long-term debt. Debt ratios measure financial leverage. Google’s debt is considered low in relation to other companies. The low debt ratio is good because it indicates that the percentage of funds utilized by Google for current liabilities and long term debt are minimal. Even through the company has made major actiquistions in 2011 and 2012 there debt equity ratio has remained quite low. Debt ratio Total Liabilities Total Assets 2010 9375 = 0.162 2011 14,432 = 0.199 57851 72574 2012 22,083 = 0.235 93,798 Times interest earned ratio
  5. 5. (Interest Coverage Ratio) EBIT (Earning Before int. & Taxes Annual Interest Exp. 2010 10.80 = 2.16 2011 12.38 = 0.213 5 58 2012 13.39 = 0.159 84 Profitability Ratios Profitability Ratios measures the company’s use of its assets and control of its assets and control of its expenses to generate an acceptable rate of return. Profitability ratio show how liquidity, asset management and debt impact firms operating results. Google’s profitability is sold and has them ranked fifth out of thirty-two other firms in their industry, Internet Information Providers (Y Charts 2011 & 2012). This shows that the company has a consistent and stable net profit margin, which is very good for the future health of the company. Google is posting consistent net profit margins during a time when the economy is floundering. This shows that Google is a strong company and its investors can have faith in the company. Net profit margin Net income Sales 2010 8,505,000 = 147.0 2011 9,737,000 = 128.84 57,851 75,574 2012 10,737,000 = 114.47 93,798
  6. 6. Return on Total Assets Net Income Total Assets 2010 8,505,000 = 147.07 2011 9,737,000 = 128.84 57,851 75,574 2012 10,737,000 = 114.47 93,798 Market Values (Market Capitalization) Market value ratio show us how to relate a company’s stock price to is earnings, book value per share and cash flow. Examining Google’s market value ratios we can measure the value of the company as it relates to other companies. Even through the price earnings dropped sharply from 2010 to 2011, it still quite high for the industry. Which shows that Google is a company with strong growth prospects; which shows in 2012. Market Value Price/Earnings per share Market price per share Earnings per share 2010 593.97 = 91.10 2011 645.90 = 77.45 6.52 8.34 2012 707.00 = 108.44 6.52 Market Value/Book (M/B) Market price per share Book value per share 2010 593.97 = 4.11 2011 645.90 = 3.60 144.61 179.52 2012 707.00 = 3.25 217.30
  7. 7. Investor Relations Investor Relations is a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the effective two-way communication between a company, the financial community, which ultimately contributions to a company’s securities achieving fair valuation. Google does not issue dividends to its investors, but it one of the most active stocks in the market with a strong buy position. Google stock purchase price and earning has improved every year for the last 3 years. Fixed Asset turnover Sales Net Fixed assets 2010 29,321 = 3778.5 2011 37,905 = 3,948 7.6 9.6 2012 50,175 = 4234.2 11.85 Total assets turnover Sales Total assets 2010 29,321 = 506.85 2011 37,905 = 522.32 57.85 72.57 2012 50,175 = 539.01 93.08
  8. 8. Conclusion Google has several strengths which makes it the industry leader for Internet searches. Due to its name, the fact that its search is easy to use and is available on a variety of platforms (desktop, laptop, cell phones, etc). Finish this with section D of that paper

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