Google Financial Analysis

Google Competitive Strategy Financial Analsis 5. energize Googles business model and dodge proven to be successful? Should investors be impressed with the fraternitys pecuniary performance? How does the alliances monetary performance comparison to that of Microsoft and hick? gratify conduct a financial abstract to support your positionyou may longing to use the financial ratios presented in the slacken 4. 1 of the text as a guide in doing your financial analytic thinking of the company.Throughout the course of its life thus uttermost as an entity, Google has enjoyed great success as one of the worlds ahead(p) search engine giants. Although the companys operations are extremely diversified, Google has interpreted strides since its initial offering in 2004 to make up its dominance over competitors in mesh advertising. Google continues to add products, services, and features to its arsenal, which in turn increases commerce to their websites and gives them increased oppor tunities to advertise.Googles original inventorying price on the date of their initial public offering was $85, fast forward eight geezerhood and the pack newly 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, dumbfound both contributed to this almost 800% appreciation. While all of these strategic maneuvers have been more than self-colored for investors pockets, the bulk of Googles earnings hang in in advertising. In 2009, 96. 8% of Googles total revenue came from advertising, over fractional of which were ads outside the United States. It is misleading to compare Googles furrow (GOOG) to that of Microsoft (MSFT) and Yahoo (YHOO) simply on the basis of price, since their prices are exponentially lower than Googles because investors rely on dividend payouts rather than stock appreciation to brook returns. However, a more accurate characterisation of performance can be spy when comparing the stock value of the triad firms on a percentage reassign basis.From January 2006 through December 2010, Googles stock appreciated 44. 35%. Compare this to Microsofts 6. 5%, Yahoos -57. 22%, and the S&P 500 index numbers -0. 86%. This shows that not just did Google significantly outperform its two study competitors it left the entire S&P index in the dust as well. Some other financial mensurates to discover are return on law (hard roe), earnings per contribution (EPS), and the current ratio. travel by on equity is a measure of the return takeholders are earning on their investment funds in the company. In 2010 Google reported ROE of 20. 8%, meaning that for every vaulting horse of equity capital, they are earning over 20%. Compare this to Yahoos 9. 83% and Microsofts 43. 76%. Generally the higher(prenominal) the ROE, the happier the investors are. EPS on the other hand measures the companys earni ngs for to each one share of reciprocal stock outstanding. In 2010 Google boasted an EPS of $26. 69, whereas Yahoo and Microsoft reported per-share earnings of $0. 91 and $2. 13 respectively. This large gap can be attributed to the occurrence 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-run obligations with readily available assets. In 2010 Googles current ratio of 4. 16 well doubled that of Yahoo and Microsoft who reported 2. 67 and 2. 13 respectively. This ratio demonstrates Googles pucka 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 dont Yahoo a question or Bing it. Works Cited All historical stock p rices, percentages, and figures were provided by Yahoo Finance. AAPL unofficial for apple Inc. Yahoo Finance. Yahoo Finance. N. p. , n. d. Web. 10 Apr. 2013. GOOG abbreviation 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.