FINANCIAL MANAGEMENT

Google and Microsoft

Table of Contents

Introduction1

Ratio Analysis of Google3

Ratio Analysis of Microsoft4

Evaluation4

Profitability6

Liquidity6

Debt Management6

Assets Management7

Per Share or Investor Ratios7

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 (Anthony,2010).

Income statement

The income statement, also labeled the statement of operations measures a company's performance a specified period of lime. It is frequently called “profit and loss account” For this reason the statement is titled for a period of time for example, year ending May 27, 2011. The statement is different from the balance sheet because it is a cumulative record of activity for a month, quarter, multiple quarters, or for one year. Creditors, investors, and many others use the income statement as a measuring stick of how a company has performed, where it appears to be heading, and what its future cash flows will be (Vandyck,2009).

Significance of income statement

Unlike a balance sheet, which communicates information about a point in time, the income statement relates to a period of time. It summarizes certain transactions taking place over that period. In terms of published reports, the period is normally one year, although most businesses of any size produce income statements more regularly, usually quarterly and often monthly. .These monthly or quarterly accounts are normally for internal consumption only, although often banks request copies or make the production of such accounts a condition or lending money.

Application of income statement in daily life

The application of income statement is quite useful in the everyday life. The income statement of an individual's personal daily life can provide a timely and crucial financial standing of the individual.The relevant information gathered from the income statement can serve as a foundation on which the individual can plan his future. For example: consider a person who is going through a financial crunch and excessive spending on luxury items, the timely relevant information from the income statement can provide with a timely in-sight and he can make corrective decision making (Groppelli,2009).

How a business manager may benefit from an understanding of ...