FINANCIAL ANALYSIS

Financial Analysis of Google and Yahoo

Financial Analysis of Google and Yahoo

Week One

Introduction

This paper focuses on the financial status of Google and Yahoo. This study will describe the importance of choosing the right strategy. Internal and external analysis of Google and Yahoo is made in order to maintain the status in the industry; it also includes the model of the strategy in use. The strategic choice of Google and Yahoo makes the company a leader in the industry. The companies have become an example in the strategic management because of its successful implementation of the strategies. Internal and external analysis of Google and Yahoo shows the set of managerial decisions and actions that determine the long run performance of a group. It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control.

Google provides advertising and global internet search services and hosted applications. Google provides users with products and services that enable people to find, create, and organize information. In addition, Google provides advertisers with ways to deliver online ads, as well as offline ads on television, to customers across Google sites and through the Google Network, a network of online and offline third parties that use its advertising programs to deliver ads with their search results and content (Annual Report, 2011). Google provides the online and offline members of its Google Network with its Google AdSense programs, which include AdSense for search and AdSense for content online services.

Besides it, Yahoo is a digital media company. Company provides online properties and services (Yahoo Properties) to users as well as a range of marketing services to reach and connect with users on Yahoo and via a distribution network of third-party entities, who then integrates company's advertising offerings into their Websites or other offerings (Annual Report, 2011). Company offerings fall into three categories that include communications and communities, which includes Yahoo Mail, Yahoo Messenger, Yahoo Groups, Yahoo Answers, Flickr, and Connected TV; Search and Marketplaces, which answers users' information through search results pages; and Media, which is designed to engage users with online content and services on the Web (Annual Report, 2010).

Financial Performance of Google

Key Financials

(In USD as of 12/31/2011)

Income Statement

Revenue

37,905m

Net Income

9,737m

EPS from Continuing Operations

29.76

EPS - Net Income - Diluted

29.76

Revenue per Share

117.43

Balance Sheet

Total Assets

72,574m

Total Liabilities

14,429m

Shareholders' Equity

58,145m

Total Assets per Share

223.38

Net Assets per Share

178.97

Cash Flows

Cash from Operations

14,565m

Cash from Investing

-19,041m

Cash from Financing

807m

Capital Expenditures

3,438m

Cash Flow per Share

44.51

Financial Performance of Yahoo

Key Financials

(In USD as of 12/31/2011)

Income Statement

Revenue

4,984m

Net Income

1,049m

EPS from Continuing Operations

0.82

EPS - Net Income - Diluted

0.82

Revenue per Share

3.91

Balance Sheet

Total Assets

14,783m

Total Liabilities

2,242m

Shareholders' Equity

12,541m

Total Assets per Share

12.42

Net Assets per Share

10.54

Cash Flows

Cash from Operations

1,324m

Cash from Investing

202m

Cash from Financing

-1,456m

Capital Expenditures

593m

Cash Flow per Share

1.03

Ratios

As it is known that the most important factors in the well being of a business, is to see how the company operates at a profit and to organize it in order to be able to meet its liabilities at appropriate times. If either of these points is not covered efficiently it could mean that the business might have to be closed ...