Essay on Financial Analysis of Google - 4521 Words

Financial Analysis Report Comprehensive Analysis of Financial Ratios and Share Performance: Google (2010, 2000 words) The scope of this report is to analyse the financial health of Google, the pinnacle search engine in the present times. It proceeds by giving a brief introduction of the company Google Inc then heading onto the detailed assessment of financial ratios for 3 financial years such as Profit Margin, Return to Equity, Return to Assets, P/E Ratio and EPS as well as share performance. Lastly, it tells about the overall financial condition of the company with respect to the said analyses and results (ratios and share performance). Google, Google Inc, P/E ratio, EPS, Profit Margin, Return to Equity, Return to Assets, Share†¦show more content†¦Yahoo has been losing market and business rapidly due to Google eating away its market. It has almost taken over the search, email and messenger based application for which Yahoo was very popular once. Today, although Google stands ahead of Yahoo and behind Microsoft it is still faster growing than both its counterparts due to innovation and technology. Similarly, a rise in Return to Assets ratio can be observed, however, it can be noticed that the ratio falls in the year 2008 and rises again in the year 2009. This shouldn’t be misinterpreted as it happened due to the increasing asset base of the company and not only decreased profits. Although certain unusual expenses (refer Note 1, Table 3) have been presented in the income statements of the firm in year 2008. The most important measure of profitability is the return on equity as truly gauges the shareholders performance in the year and that is what matters to shareholders the most. We can observe that along with the rise in the profits, there had been a substantial rise in the total equity base as well. Equity base of a company is the total of share capital of stockholders and its retained earnings. Since, Google Inc. reinvests all profits back into the business and does not pay dividends, a consistent rise in the equity base can be observed over the years. 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