Google Financial Analysis Essay

4318 Words May 9th, 2013 18 Pages
| Sumit Das-Assignment 2 | Financial Ratio Analysis-Google Corporation | | Sumit | 3/12/2013 |


Contents Objective of Study 2 Analysis of Auditors Report 2 Common Size Ratio Analysis 3 Analysis of Liquidity Ratios 4 Analysis of Leverage ratios 5 Analysis of Efficiency Ratios 6 Analysis of Profitability Ratios 7 Analysis of Effectiveness/Market Performance Ratios 8 Summary 9 Current Ratio (2011) 9 Average Collection Period 9 Debt Ratio 9 Accounts Payable turnover 10 Gross Profit Margin 10 Return on Assets 10 Recommendations 11

Objective of Study

Financial ratio analysis is a very important element of fundamental analysis process. Working through number in a financial statement can
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Another noticeable observation is the increase in the percentage of the marketable securities which increased substantially from 36.90 % to 47.73%.If we compare this value with the benchmark company Microsoft we can see that for Microsoft the value of the cash and cash equivalents as a percentage of the total assets showed an increase from 6.39% to 8.84%. Google over the years has maintained high cash and cash equivalents percentage that is the company has maintained a high degree of liquidity.
For a very aggressive company like Google this kind of behaviour is not very unusual as it shows the intentions of mergers and acquisitions (by getting quick gains in a short time period) of which Google has been known for over the years by acquiring over a 100 companies till date. The decrease in the percentage of cash can also be attributed to the decrease in the current liabilities which fell from 17.28 % to 12.28 %.
The accounts payable and accounts receivable values have remained pretty consistent during this period. Also the stockholders equity and total current assets have shown a pretty fair value of 80.12 % and 72.70% respectively.

Analysis of Liquidity Ratios

Google is clearly a leader among its primary industries. The company is listed in the following industry divisions Website Hosting, Web Search Engine, Online Advertising

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