Google Inc is a multinational Internet company based in the United States founded in 1998 by Larry Page and Sergey Bin. The company specializes in Internet-related services and other products which include online advertising programs, search engine, cloud computing, and software. Google reported a net income of $16 billion in 2015. In addition, the company also reports four major revenue segments are the Google website, AdSense Google Network, total advertising technologies and other revenues. In Google’s statement of cash flow, it stated that Google generated $26 billion dollars of cash in from its operations in 2015 compared to $18.7 billion that the company generated in 2014. This increase can be attributed primarily to the growing number
…show more content…
Earning per share ratio is one of the profitability ratios computed by the net income less preferred dividends and divided the weighted average common shares outstanding. In 2015, Google’s earning per share ratio is $22.84. This indicates that if Google distributed every dollar of income to its shareholders, each shareholder would receive $22.84. In addition, Google’s earning per share ratios also increase from $20.57 in 2014 to $22.84 in 2015. These ratios in recent years are high, which means that Google is doing well in earning their profitability, and it also has more profits to distribute to its stockholders. However, this ratio is not so accurate and flexible in comparing the operating growth among different companies because that ratio also depends on the numbers of outstanding shares. For example, Google and Microsoft have almost the same amount of net income in 2015, which is approximate $16 billion. On the other hand, Microsoft’s earning per share ratio in 2015 is only $2.1, which is much lower than Google’s ($22.84). In addition, the company also uses the return on assets ratios in order to evaluate a company’s profitability. Return on assets ratios give investors an idea of how well the company uses the assets to generate earnings. It is calculated as the ratio of net income to the total assets. Google’s return on assets ratio is 11.36% in 2015,
Earning per share ratio is one of the profitability ratios computed by the net income less preferred dividends and divided the weighted average common shares outstanding. In 2015, Google’s earning per share ratio is $22.84. This indicates that if Google distributed every dollar of income to its shareholders, each shareholder would receive $22.84. In addition, Google’s earning per share ratios also increase from $20.57 in 2014 to $22.84 in 2015. These ratios in recent years are high, which means that Google is doing well in earning their profitability, and it also has more profits to distribute to its stockholders. However, this ratio is not so accurate and flexible in comparing the operating growth among different companies because that ratio also depends on the numbers of outstanding shares. For example, Google and Microsoft have almost the same amount of net income in 2015, which is approximate $16 billion. On the other hand, Microsoft’s earning per share ratio in 2015 is only $2.1, which is much lower than Google’s ($22.84). In addition, the company also uses the return on assets ratios in order to evaluate a company’s profitability. Return on assets ratios give investors an idea of how well the company uses the assets to generate earnings. It is calculated as the ratio of net income to the total assets. Google’s return on assets ratio is 11.36% in 2015,