Google Financial Analysis

Google warlike Strategy Financial Analsis 5. Have Googles business model and schema proven to be successful? Should investors be impressed with the companys pecuniary performance? How does the companys monetary performance discriminate to that of Microsoft and hick? Please conduct a financial analysis to maintenance your positionyou may wish to use the financial ratios presented in the accede 4. 1 of the text as a guide in doing your financial analysis of the company.Throughout the course of its life thus far as an entity, Google has enjoyed p from each oney success as one of the worlds leading hunt club engine giants. Although the companys operations are extremely diversified, Google has interpreted strides since its initial offering in 2004 to establish its dominance oer competitors in Internet advertising. Google continues to add products, services, and features to its arsenal, which in turn increases traffic to their websites and gives them increased opportunities to adv ertise.Googles original stock price on the date of their IPO was $85, unshakable forward eight years and the stock currently trades at $761. 78. steps such as the acquisition of YouTube in 2006, the introduction of the Android in 2008, their Google TV initiative, and the continuing development and sophistication of Google Apps, have all contributed to this almost 800% appreciation. While all of these strategic maneuvers have been more than satisfying for investors pockets, the bulge of Googles earnings remain in advertising. In 2009, 96. 8% of Googles total revenue came from advertising, over half of which were ads outside the United States. It is direct to compare Googles stock (GOOG) to that of Microsoft (MSFT) and chawbacon (YHOO) solely on the tush of price, since their prices are exponentially lower than Googles because investors rely on dividend payouts rather than stock appreciation to provide indemnitys. However, a more accurate depiction of performance end be obs erved when comparing the stock value of the three firms on a percentage change basis.From January 2006 through declination 2010, Googles stock appreciated 44. 35%. Compare this to Microsofts 6. 5%, Yahoos -57. 22%, and the S&P vitamin D indexs -0. 86%. This shows that not only did Google significantly subdue its two major competitors it left the entire S&P index in the dust as well. Some other financial measures to consider are return on equity (hard roe), earnings per shell out (EPS), and the current ratio. Return on equity is a measure of the return shareholders are earning on their investment in the company. In 2010 Google report ROE of 20. 8%, meaning that for every dollar of equity capital, they are earning over 20%. Compare this to Yahoos 9. 83% and Microsofts 43. 76%. Generally the higher the ROE, the happier the investors are. EPS on the other hand measures the companys earnings for each share of common stock swell. In 2010 Google boasted an EPS of $26. 69, where as Yahoo and Microsoft reported per-share earnings of $0. 91 and $2. 13 respectively. This large gap can be attributed to the fact that Google has significantly less shares of common stock outstanding than the two competitors.Finally, the current ratio is a measure of the companys ability to pay short-term obligations with readily available assets. In 2010 Googles current ratio of 4. 16 nearly doubled that of Yahoo and Microsoft who reported 2. 67 and 2. 13 respectively. This ratio demonstrates Googles superior liquidity in comparison with its competitors Not only has Google dominated market share in the industry, in 2010 Google was the worlds most-visited Internet site, with close to 147 million views each month.This goes hand in hand with the fact that people Google things when they need an answer, they fall apartt Yahoo a question or Bing it. Works Cited all(prenominal) historical stock prices, percentages, and figures were provided by Yahoo Finance. AAPL outline for Apple Inc . Yahoo Finance. Yahoo Finance. N. p. , n. d. Web. 10 Apr. 2013. GOOG Summary for Google Inc. Yahoo Finance. Yahoo Finance. N. p. , n. d. Web. 10 Apr. 2013. YHOO Summary for Yahoo Inc. Yahoo Finance. Yahoo Finance. N. p. , n. d. Web. 10 Apr. 2013.