financial analysis of google
Post on 22-Oct-2014
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DESCRIPTION
This project is for my Financial Accounting 2 class. I choose to analyze Google, and the project proved to be informative, challenging, and fun!TRANSCRIPT
![Page 1: Financial Analysis of Google](https://reader033.vdocuments.site/reader033/viewer/2022061109/5447a638b1af9f1b098b471c/html5/thumbnails/1.jpg)
Google Inc.
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The BeginningBegan at
Stanford University in 1996
Larry Page and Sergey Brin collaborated on research project
Mathematical algorithm dubbed PageRank
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The Theory PageRank determined
how pages linked together
Listed in order of importance
Larry and Sergey developed a theory
Search engine based on PageRank
Google created; play on mathematical term “googol”
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Historical Dates Google .com
registered September 15, 1997
Incorporated September 4, 1998 as private company
Initial public offering August 19, 2004
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The Founders Larry Page-CEO
Day-to-Day Operations
Sergey Brin, Ph.D.-Co-founder
President of Technology
Eric Schmidt-Executive
Chairman Business Relationships
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Projects547 Projects as
of July 2011Continues to
ExpandPurchasing
Motorola Investing in
ZyngaCreating
Google+ social network & Google Games
Dropping unfruitful projects; Google Desktop, 8 others
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Financial OutlookProfit Margin (ttm):27.05%
Operating Margin(ttm):33.62%
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Balance Sheet Comparison
Quarterly Annual
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Cash FlowAs of September 2,
2011:Operating Cash Flow (ttm):
13.10B
Levered Free Cash Flow (ttm):
3.02B
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Side by Side ComparisonYear Ended
December 31, 2009
Year Ended
December 31, 2010
Current Assets $29,167
Current Liabilities
$2,747Working Capital $26,
420
Current Assets $41, 562 Current Liabilities
$ 9,996Working Capital $31, 566
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Debt Ratio AnalysisYear Ended
December 31, 2009
Year Ended
December 31, 2010
Total Liabilities$4,493
Total Assets$40,497
Debt Ratio0.11
Total Liabilities$11,610
Total Assets$57,851
Debt Ratio0.20
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Further AnalysisYear Ended
December 31, 2009
Year Ended
December 31, 2010
Days Sales in Receivables:
46 daysRate of Return /Net
Sales:35.44%
Price/Earnings Ratio:$26.38
Days Sales in Receivables:
47 daysRate of Return /Net
Sales:36.82%
Price/Earnings Ratio:
$21.30
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Stock Price Trend
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Earnings per Share
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Pending Legal ActionPayPal / Ebay Sues
for Trade Secret Theft
Patent Pending Lawsuits; One
dismissedMicrosoft Sues Motorola Mobility over Android OS
Android Obtains Personal Information
via Location Tracking
Oracle Sues for 6.1 Billion
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Recommendation
CONS:Pending
LitigationsState of
EconomyNo Dividends
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RecommendationPROS:
Financial Analysis Reflects Continued Growth
Also Reflects Little Risk
Company is Able to Pay Debts
Large Revenues
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ConclusionGood Investment, but Advise to Await
Resolution of Pending Litigations