Google Inc. Financial Summary

Google Inc. generates revenue “primarily by delivering both performance advertising and brand advertising, and we recognize revenues when the services or products have been provided or delivered” (google citation). In 2014, $45,085million was generated from ads on google websites and $13,971million from google network members’ websites while other revenue was only $6,945 million.

The cost of revenue for Google Inc. is similar to the cost of goods sold account for manufacturing and retail companies. As a percentage of total revenue, cost of revenue it went from 40% in 2013 to 39% in 2014. The cost of revenue consists of “traffic acquisition costs which are the advertising revenues shared with our Google Network Members and the amounts paid

As aforesaid, this was because there was no non-recurring event in 2013. Moreover, since 2012, additional income and expense event rapidly decreased, and now it was only 0.07% of total revenue in 2014. Net income also followed the same pattern as operating income margin for the same reasons. The increase in net income was a result of reducing debt levels of Microsoft Corporation. Additionally, because there were no minority interest and loss of unconsolidated subsidiary from 2014 to 2012, net income is also continuously increased. Apple Inc. is a profitable company during the ending period of 2014 because, as stated in the analyzation of the income statement, the revenues exceed total expenses, leaving net income of $39,510 million. Since the creation of the first iPhone, Apple has been able to generate over 100 billion U.S. dollars through the sales in iPhones alone in 2014. Meaning that an average of 56.2% of the company’s revenue comes from the sales of smart devices. Apple has also worked with increasing the sales of another of their products, iPads, earning the company revenue of 11.5 billion U.S. dollars the same

Interest and other income went from a 35% decrease in 2013 to a 24% increase in 2014. Google Inc. realized gain on equity interest and non-marketable equity investments of $126million and $159million respectively in 2014. Also, $153million realizable gain on available-for-sale investments and other income of $82million were made. In terms of losses, it recorded $402 million foreign exchange loss and interest expense of $101 million. The effect of these transactions is the 24% increase in interest and other income noted in 2014.

The provision for income taxes went from a decrease of 27% in 2013 to a 10% increase in 2014. This increase was caused by a number of transactions as discussed below. In 2014, the company recorded foreign rate differential of $2,400 million, change in valuation allowance of $164 million, and federal research credit of $318 million. It also recorded $115 million state taxes, net of federal benefit. Other adjustments made amounted to $57