Gamboa Jonathan
Financial Analysis Discussion
ACG2071
Google Specializing in internet related services and products, Google Inc. is one of the largest technology companies in the world. Taking a closer look at Google's financial statements I was able to analyze how the company was doing financially and whether or not it's a company worth investing in. Over the past three years, Google has seen a gradual increase in total revenue and net income. The percent change for 2012-2014 is approximately 20% and 19% in total revenue from 2012-2013 and 2013-2014 respectively. However although net income has also increased the percent change from 2013-2014 is not as high as sales revenue for that year, 11.8%. The reason for this can be seen from the increase in operating expense and further investment towards research and development.
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Furthermore, Google's quick ratio came out to 4.46. These two ratios measure the ability of a company to pay current liabilities and after looking at the results Google is in a strong position to pay its current liabilities all at once if they were to come due immediately. One of the major reason these ratios are so high is because of how low Google's debt ratio is, 0.2. The debt ratio indicates the percentage of assets financed with debt so the lower the better. Google decide to go public and issue common stock in the year of August of 2004. From 2013-2014 their earnings per share, EPS, was $21.24. EPS is the amount of net income earned for each share of the company's outstanding common stock. However, the main thing that caught my attention was Google's dividend yield, the ratio of dividends per share to the stock's market price per share. The ratio measures the percentage of a stock's market value that is returned annually as dividends. The main issue is that Google does not issue
A majority of Google Inc. revenue comes from its advertising services. As a search engine provider (i.e. chrome) it knew that it had access to billions of customers worldwide which businesses want to reach. So it asked the question, “What if we could provide products that allow for better attribution and measurement across screens so that we show great ads for the right people?” (citation). From there came this idea of providing advertisement services to businesses. Its ad services are grouped into Performance advertising and Brand advertising.
Google generates the majority of its revenue by offering cost-effective highly relevant advertising. Google sites account for 66% of total revenues for the company. Google also networks and the networking brings in approximately 8.7 billion dollars which percentage wise is around 30%and last but not least the licensing and misc. ventures and projects account for the last 4% that’s left. In total the company sales were 29.3 billion dollars last year. The U.S. alone totals almost half of Google’s revenue at a whopping 48%.
In the current liabilities section of Google Inc., there were ups and down in the various accounts. The accounts payable decreased by 27.93% whereas, the accrued expenses went up by 6.17%. Deferred revenue decreased by 175.11% so also did accrued revenue share by 3.54%.
He states that Google constantly improves the web to make it more appealing and efficient for its users. Google's primary mission is to make information accessible to everyone. As Google excelled-developed in its “mission”, it needed a method to gain profit. However, it knew that charging people to use the web will discourage them, so it came up with an idea to add advertisers on its web through searchable links.It focused on making ads relevant for its users rather than according to the highest bidder like other web platforms. Google gets paid per click and has soon generated billions of dollars from advertisers. In addition, Carr mentions that one of “the greatest accelerations has come recently, with the rise of social networks like MySpace, Facebook, and Twitter (Carr 158).Their purpose is to provide its users with a “stream” of “real time-updates” (158).It became in Googles advantage because traffic increased greatly. One of Google's goals was to make books accessible online, so it embarked on its journey digitizing millions of books by scanning them one by one including those still under copyright
Google is also well situated financially amongst the most profitable companies in the world with earnings nearly $50 billion and $11 billion profits. The company also boast of $48 billion in cash and just $7 billion of debt which makes them difficult to compete
Google Inc. is a company that started in 2002 and has gradually grown to become an international technology company. Google’s business is mainly focused around vital areas, like advertising, search, operating systems and platforms, hardware products and enterprise. The company produces its revenue mainly by distributing online advertising. Google also produces revenue from Motorola through selling products. The company offers its services and products in over 100 languages and in over 50 regions, territories and countries.
Google continues to grow and innovate. Google focuses on the user and all else will follow. Since the beginning, they have focused on providing the best user experience possible, and take great care to ensure that they will ultimately serve their customers(Google.com n.d.). In relation to market development and product development the core values “Its best to do one thing really, really well (Google.com n.d.),” fits in with these strategies. “You don’t need to be at your desk to need an answer (Google.com n.d.),” describes Goggle’s innovation to mobile platforms. “The need for information crosses all borders (Google.com n.d.).” Google company has grown and has offices in more then 60 countries, maintaining more then 180 internet domains, and serve more then half of their results to people outside of the United States, and this relates to concentrated growth strategy. “Great just isn’t good enough(Google.com n.d.).” Google continues to strive to reach for better ways of doing things, through innovation and integration, continue to improve things in unexpected ways (Google.com n.d.).
Boiling Google's strategy down to just one thing is impossible, but Internet marketers (and search marketers in particular) ought to be thinking about where Google wants to take the industry, because even if Google ultimately can't go where it wants, the industry will be changed regardless. Watching Google helps us understand not only where Google is going, but where others might go also. So, what is behind all the actions we've seen Google take over the years?
One of the primary ways of revenue is by delivering online advertising. The company took one billion dollars in advertising in 2003 with profit margins of thirty percent (Caufield, 2005). Currently, Google provides more than 200 million searches per day (2005).
Google is a search engine that helps you get answers to every question you have and solutions to every problem you have. As a search engine, it faces competition from other entities like Yahoo, OAL, EXPE, SNI, EBAY, DIS, FB, Twitter, Microsoft, and LinkedIn. None the less, it has done well to ensure it stays
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.
2009 was a negative period for the United States economy. A big recession hit the country, and the founders of Google were trying to make a plan in order to make to limit the damage caused by an economic decline. Brin and Page the two creators of the giant Google were shocked form the situation that was occurring. Their company was feeling the effect of the economic downturn. Google’s stock price dropped 51 percent. The two entrepreneurs were trying to figure out a way to keep the company from drowning. Google main problem was how to maintain the culture that made the company successful in the previous two years. Some consequences that the company had to face was eliminating products that
3. Google being an innovative driven company, it can open a new wing for employees who wants to go solo i.e. has entrepreneurship desires with good start up ideas. The company can be at advantageous situation by acting as angel investor and help employees nurture their ideas.
Industry (Industry concerns for Google are competitive threats from Yahoo and Microsoft and new unknown competitors that may be international. Agreements with advertisers could potentially become competitive as well, as a result, reducing operating margin)
The first aspect of the balanced scorecard is the financial perspective, which is responsible for answering the following questions: “To succeed financially, how should we appear to our shareholders?” Our finance objective for Google is to increase net revenue. Google’s revenue has shown a steady growth over the years. Google’ s revenue in 2011 was 37,905,000 and in 2012 it was 50,175,000. In one year, Google manage to exceed its 2011 revenue by 12,270,000. Google, is currently in their fourth quarter of 2013. Each quarter’s revenue in 2013 is noticeably greater than the quarters in 2012. In the third quarter of 2013, Google generated total revenues of 14,893,000, compared to 2012 third quarter of 13,304,000