Tripadvisor Financial Analysis

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The Long-Term Solvency Ratio is determined using the Debt to Total Assets. It indicates how much debt the company has taken to finance its assets. A lower ratio is desirable to depict that TripAdvisor is not overleveraging itself to finance the growth.
8.4.4. The Debt to Assets Ratio It is observed that the Debt to Assets Ratio for TripAdvisor has been falling down and is in a comfortable zone of 0.34. Hence, from a strategic point of view, it can be inferred that the risks associated with the performance are less.
8.4.5. Stock Price
The stock price of TripAdvisor for the last three years is as shown below: Figure 11. The chart shows historical Stock Prices of TripAdvisor for the last three years (2013-2016) in USD, million.
It is observed that in the last two years the stock has been in a decline. This happened because the …show more content…

Financial Conclusion
The financial analysis shows that the overall position of TripAdvisor on the market is stable because the performance of TripAdvisor shows a steady increase in revenues over the past three years; however, all the profitability ratios have declined over this period and specifically the return on assets and return on equity are at very low levels. This indicates that the company is not able to use the assets or the funds of the equity holders effectively.
The strategic question raises a problem of decreasing revenue growth: the operating income of the company is increasing and this has resulted in lower profit margins for 2014-2015. This happened because of the increase in the cost of revenues due to acquisitions in the Attractions and Restaurant businesses. The company also has added more personnel to support these acquisitions and has increased spending on Selling and Marketing expenses to increase the visibility and to support future growth. From a strategic point of view, it can be said that the company is making the right choices and is looking to return to the path of higher operating margins in the

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