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Financial Analysis of Google

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This project is for my Financial Accounting 2 class. I choose to analyze Google, and the project proved to be informative, challenging, and fun!

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Financial Analysis of Google

  1. 1. Google Inc.<br />
  2. 2. TheBeginning<br /><ul><li>Began at Stanford University in 1996
  3. 3. Larry Page and Sergey Brin collaborated on research project
  4. 4. Mathematical algorithm dubbed PageRank</li></li></ul><li>TheTheory<br /><ul><li>PageRank determined how pages linked together
  5. 5. Listed in order of importance
  6. 6. Larry and Sergey developed a theory
  7. 7. Search engine based on PageRank
  8. 8. Google created; play on mathematical term “googol”</li></li></ul><li>HistoricalDates<br /><ul><li> Google .com registered September 15, 1997
  9. 9. Incorporated September 4, 1998 as private company
  10. 10. Initial public offering August 19, 2004 </li></li></ul><li>TheFounders<br /><ul><li>Larry Page-CEO</li></ul>Day-to-Day Operations<br /><ul><li>Sergey Brin, Ph.D.-Co-founder President of Technology
  11. 11. Eric Schmidt-Executive Chairman Business Relationships</li></li></ul><li>Projects<br /><ul><li>547 Projects as of July 2011
  12. 12. Continues to Expand
  13. 13. Purchasing Motorola
  14. 14. Investing in Zynga
  15. 15. Creating Google+ social network & Google Games
  16. 16. Dropping unfruitful projects; Google Desktop, 8 others</li></li></ul><li>Financial Outlook<br />Profit Margin <br />(ttm):27.05%<br />Operating Margin<br />(ttm):33.62%<br />
  17. 17. Balance Sheet Comparison<br />Quarterly<br />Annual<br />
  18. 18. Cash Flow<br />
  19. 19. Side by Side Comparison<br />Year Ended<br />December 31, 2009<br />Year Ended<br />December 31, 2010<br /><ul><li>Current Assets $29,167
  20. 20. Current Liabilities</li></ul> $2,747<br /><ul><li>Working Capital</li></ul> $26, 420 <br /><ul><li>Current Assets</li></ul> $41, 562 <br /><ul><li>Current Liabilities </li></ul> $ 9,996<br /><ul><li>Working Capital</li></ul> $31, 566<br />
  21. 21. Debt Ratio Analysis<br />Year Ended<br />December 31, 2009<br />Year Ended<br />December 31, 2010<br /><ul><li>Total Liabilities</li></ul> $4,493<br /><ul><li>Total Assets</li></ul> $40,497<br /><ul><li>Debt Ratio</li></ul> 0.11<br /><ul><li>Total Liabilities</li></ul> $11,610<br /><ul><li>Total Assets</li></ul> $57,851<br /><ul><li>Debt Ratio</li></ul> 0.20<br />
  22. 22. Further Analysis<br />Year Ended<br />December 31, 2009<br />Year Ended<br />December 31, 2010<br /><ul><li>Days Sales in Receivables:</li></ul> 46 days<br /><ul><li>Rate of Return /Net Sales:</li></ul> 35.44%<br /><ul><li>Price/Earnings Ratio:</li></ul> $26.38<br /><ul><li>Days Sales in Receivables:</li></ul> 47 days<br /><ul><li>Rate of Return /Net Sales:</li></ul> 36.82%<br /><ul><li>Price/Earnings Ratio:</li></ul> $21.30<br />
  23. 23. Stock Price Trend<br />
  24. 24. Earnings per Share<br />
  25. 25. Pending Legal Action<br /><ul><li>PayPal / Ebay Sues for Trade Secret Theft
  26. 26. Patent Pending Lawsuits; One dismissed
  27. 27. Microsoft Sues Motorola Mobility over Android OS
  28. 28. Android Obtains Personal Information via Location Tracking
  29. 29. Oracle Sues for 6.1 Billion</li></li></ul><li>Recommendation<br />CONS:<br /><ul><li>Pending Litigations
  30. 30. State of Economy
  31. 31. No Dividends</li></li></ul><li>Recommendation<br />PROS:<br /><ul><li>Financial Analysis Reflects Continued Growth
  32. 32. Also Reflects Little Risk
  33. 33. Company is Able to Pay Debts
  34. 34. Large Revenues</li></li></ul><li>Conclusion<br />Good Investment, but Advise to Await Resolution of Pending Litigations<br />

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