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Analyzing a Company's Fundamentals of Financial Management

For the purposes of this project you may take one of two positions. One position will be as a Financial Analyst/Planner reviewing a publicly held corporation as a possible addition to a portfolio. The other position will be as a Financial Analyst within a corporation reviewing the annual statements of a company and making recommendations on how to proceed in the future from a financial standpoint. (I don't want to influence you but about 98% choose the first option.)

How to Analyze a Company

1. Analyze the company's Fundamentals of Financial Management in detail. (Chapters 1 through 4 Describe the process.)
2. Valuation of securities. (Stocks, bonds, Risk management) For example answer the question of "How does in fit in a portfolio?" (ie. Is the company volatile in its Stock Price and a poor (stock price) performer, are the earning volatile yet has strong and consistent dividends and therefore perhaps a good choice risk adverse portfolio.)
( Chapters 5 through 9 Describe the valuation)
3. Add your own ideas and areas of analysis. If you are taking the alternate approach of an internal corporate analyst, I would place emphasis on Chapter 10 and 11 for the analysis.

Here are the topics in my books that has to do with the project. I have touch most of this in the paper: Introductions, syllabus review: Chapter 1 Overview of Finance, Chapter 2 Time Value of Money, Chapter 3 Financial Statements, Chapter 4 Analysis of Financial Statements, Chapter 5 Bonds, Bond Valuation and Interest Rates, Chapter 6 Risk and Return, Chapter 7 Portfolio Theory, Chapter 8 Stocks and Stock Valuation.

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Below are my answers.

Anna Liza Gaspar

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Google, Inc.
Financial Analysis


Executive Summary
Google, Inc., considered as one of the Internet giants today, was established in 1998 and unlike many of its contemporaries, has managed to show financial sustainability. This profitability is a result of the company's top of the line services including Google Adsense and its web search engines. As a matter of fact a handful of these services are unparalleled and thus deliver unique value proposition to users.
Given a 4.32 per cent compounded annual growth rate of the company's profit margin and alpha returns in the company's share price over the last five years, Google, Inc. can be a valuable addition to a portfolio.

This paper looks at the financial performance of Google, Inc. (NasdaqGS: GOOG) vis-à-vis market indices and its closest rivals. This analysis aims to discuss whether Google is a good fit in an investment portfolio. The discussion was through analysis of the company's financial statements from 2007 to 2009, and comparison of its stock price performance to benchmarks over the past 5 years. Based on the analysis, Google's management has been effective and efficient in utilizing the company's resources in maximizing shareholder wealth. Thus for certain portfolios, this asset can be a good fit. However, issues such as whether management will be able to continue doing as well in the near future has to be answered in determining the time frame of the investment.

Google, Inc. (NasdaqGS: GOOG) is "a global ...

Solution Summary

This solution analyzes Google's fundamentals of financial management.