FINANCIAL MANAGEMENT

Google and Microsoft

Table of Contents

Introduction3

Ratio Analysis of Google3

Ratio Analysis of Microsoft5

Evaluation6

Profitability6

Liquidity6

Debt Management7

Assets Management7

Per Share or Investor Ratios8

Conclusion8

Google and Microsoft

Introduction

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. 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.

Microsoft is engaged in developing, manufacturing, licensing, and supporting a range of software products and services. Microsoft's products include operating systems for personal computers, servers, phones, and other devices; server applications for distributed computing environments; productivity applications; business applications; desktop and server management tools; software development tools; video games; and online advertising. Microsoft conducts its businesses through five reportable segments: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.

Ratio Analysis of Google

The given ratio analysis of Google will provide a thorough interpretation of the key indicators that are included in the annual financial report that are the profit & loss account, balance sheet and cash flow statement. As it is known that the most important factors in the well being of a business, is to see that it 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 down. This is the reason why we choose to calculate profitability and liquidity ratios which are the most important and reliable guides. In addition, various past studies states that we decide to calculate activity ratios in order to see how efficiently the company like Google has managed its debt management ratios, asset management ratios and per share values to commend upon the Google's sources of finance and whether a risk arises from increased debt.

Profitability Ratios

2010

ROA % (Net)

17.3

ROE % (Net)

20.68

ROI % (Operating)

24.22

EBITDA Margin %

39.61

Calculated Tax Rate %

21.22

Revenue per Employee

1,201,680

Liquidity Ratios

2010

Quick Ratio

4

Current Ratio

4.16

Net Current Assets % TA

54.56

Debt Management

2010

Total Debt to Equity

0.07

Asset Management

2010

Total Asset Turnover

0.6

Receivables Turnover

7.17

Accounts Payable Turnover

83.91

Accrued Expenses Turnover

14.77

Property Plant & Equip Turnover

4.65

Cash & Equivalents Turnover

2.46

Per Share

2010

Cash Flow per Share

34.77

Book Value per Share

143.92

Ratio Analysis of Microsoft

The given ratio analysis of Microsoft will provide a thorough interpretation of the key indicators that are included in the annual financial report that are the profit & loss account, balance sheet and cash flow statement. As it is known that the most important factors in the well being of a business, is to see that it operates at a profit and to organize it in order to be able to meet its liabilities at appropriate ...