Financial Health Essay

2256 Words May 28th, 2014 10 Pages
Assessing A Company's Future Financial Health
Jonathan B. Mendez
FIN 504
May 7, 2014
Tanisha Morgan
Assessing A Company's Future Financial Health
Google is a multinational corporation that serves thousands of consumers worldwide. Through Internet related products such as Internet searches, maps, emails, mobile apps, and other online contents for users Google became the company it is today. Every employee of Google is different in his or her own way; making it a well-diversified organization similar to the global audience they serve. Google’s mission statement is to organize information from all around the world and make it universally accessible at a quick and orderly fashion. This means creating a search engine smart
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Google has mainly kept its liabilities relatively low compared to assets. There was some increase in liabilities in 2010 as well as an extensive increase 2012 compared to earlier years.
Google has a total asset turnover of .6%. The total asset turnover can be interpreted to mean the amount of sales, that each unit of assets can generate. Simply, it's smarter to get more sales on the assets that you are deploying to a business. The higher the total asset turnover, the better the business is doing. Therefore, Google’s percentage of .6% is an indication that the company is below the average industry of .7%. The current ratio measures a company’s ability to pay short-term liabilities. The higher the current ratio, the more capable the company is of paying its liabilities. Google has a current ratio of 3.94, in comparison to the industry average of 4.8%. Due to the fact that Google is under the industry average it means that Google can pay back its short-term debt but not as quick as other companies in the industry. The quick ratio is very similar to the current ratio; in the way it also measures the company’s ability to pay of short-term liabilities. The only difference is that it adds the inventory of the company to its calculations. Google maintains a quick ratio of 3.7, which still shows it, is efficient in paying off its short-term obligations. The debt to equity ratio indicates what

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