Googles Financial Analysis - 1228 Words

Table of Contents Introduction 1 Summary of Operations 1 Financial Position 3 Trend Analysis 3 Introduction Google is an Internet company based in California. The companys American site is the #1 website in the world in terms of traffic. Google sites hold six other spots in the worlds 25 most popular websites according to Alexa.com (2012). In fiscal 2011, Google earned revenue of $37.9 billion and net income of $9.7 billion. Its main revenue driver is its online advertising business, which accounted for 96.3% of all revenue (2011 Annual Report). Googles other businesses, including the Chrome browser and Android mobile operating system, do not generate much income for the company despite their popularity. This report will outline the financial condition of Google. Summary of Operations An analysis of Googles income statement reveals that gross revenue was $37.9 billion. The cost of revenue was $13.18 billion so the net sales (gross profit) was $24.717 billion. This represents an increase of 30.7% over the year previous. The profitability ratios are a set of financial ratios that outline how well the company turns its revenue into profit. The gross margin is 65.2% and the net margin is 25.6%. These ratios indicate that Google has a high level of profitability, with healthy margins. These margins are attributable to the companys low level of fixed costs as a company that develops software and sell advertising. The net income before taxes was $12.326Show MoreRelatedGoogle : Financial Analysis On The Health Of A Business1723 Words   |  7 PagesGoogle: Financial Analysis Financial statements provide a picture of the health of a business is and how prepared they are to face the challenges ahead. Publically traded companies are required to post financial statements and a detailed 10-K report on the SEC website. This is a tool that creditors, analysts, and investors use in assessing the health and future of a company. 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