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This being said Google should maintain its current strengths of a successful audience which helped reach a high of $13,100,000,000 operating income for the current fiscal year. With the growth of the company over the last five years Google’s net income, gross profit, and revenue have gradually increased. Hitting a low point towards the end of 2008 and the beginning of 2009 then rising again in 2010. Even during a recession, a time of need, Google remained lucrative through its assets, liabilities, stable stock price, and efficiency for paying back
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It has a current ratio of 3.94%, meaning it can efficiently cover its short-term liabilities. The company also has a debt to assets ratio of .07%. This number measures the company’s financial risk by determining how much of the company’s assets have been financed by debt. Since Google’s number is equal to industry average it is easy to infer that Google has average financial risk because its assets are significantly higher than its short and long term debt. Google also shows a strong ability to pay off their interest because their EBITDA to interest ratio is extremely high at 154.64. The operating cash flow to total debt ratio measures how well the cash generated from Google’s operations covers current liabilities. Google’s operating cash flow to total debt ratio is also high at 2.56. This is a good sign and means Google is able to generate a large sum of cash to pay off debts.
When a company with operating cash flow is considerably higher than its net income the company is considered to have high quality. This is the case with Google. In 2008 Google’s net income was $6,632,000,000 and its operating cash flow was $7,853,000,000. Over the last five years both net income and operating cash flows have increased. Net income increased to $13,339,000,000 and the cash from operating activities increase to $15,874,000,000. Since Google is generating a good amount of their money back they have been able to reduce debt along with buying backs some of their
It has a current ratio of 3.94%, meaning it can efficiently cover its short-term liabilities. The company also has a debt to assets ratio of .07%. This number measures the company’s financial risk by determining how much of the company’s assets have been financed by debt. Since Google’s number is equal to industry average it is easy to infer that Google has average financial risk because its assets are significantly higher than its short and long term debt. Google also shows a strong ability to pay off their interest because their EBITDA to interest ratio is extremely high at 154.64. The operating cash flow to total debt ratio measures how well the cash generated from Google’s operations covers current liabilities. Google’s operating cash flow to total debt ratio is also high at 2.56. This is a good sign and means Google is able to generate a large sum of cash to pay off debts.
When a company with operating cash flow is considerably higher than its net income the company is considered to have high quality. This is the case with Google. In 2008 Google’s net income was $6,632,000,000 and its operating cash flow was $7,853,000,000. Over the last five years both net income and operating cash flows have increased. Net income increased to $13,339,000,000 and the cash from operating activities increase to $15,874,000,000. Since Google is generating a good amount of their money back they have been able to reduce debt along with buying backs some of their