Hi, is there someone with a strong Fin. accounting background who has probably completed a report (financial analysis between Google and Yahoo) like this one-who can help me with this project? Thanks© BrainMass Inc. brainmass.com March 21, 2019, 3:25 pm ad1c9bdddf
For your convenience, I have attached an APA formatted MS Word file containing the information below.
Google vs Yahoo
A Comparative Financial Analysis
Liquidity ratios, like the current ratio, provide information about a firm's ability to meet its short time financial obligations. Short-term creditors seek a high current ratio from prospective clients since it reduces their risk. For investors in a company, such as shareholders, a lower ratio is sought, so that more of a firm's assets are working to grow the business. When computing financial relationships, a good indication of the company's financial strengths and weaknesses becomes clear. Examining these ratios over time provides insight as to how effectively the business is being operated. The general consensus on liquidity ratios is; the higher the better, especially if a firm is reliant on any significant extent on creditors to finance their assets.
Financial Ratios for Google, Yahoo and the Internet Information Providers Industry
(based on 2005 and 2006 Fiscal Year Financial Information)
Google, Inc. Yahoo, Inc. Industry
Liquidity Analysis Ratios:
Current Ratio 10.0 2.5 3.2
Net Working Capital Ratio 0.6 0.2 N/A
Profitability Analysis Ratios:
Return on Assets (ROA) 5.4% 1.7% 2.1%
Return on Equity (ROE) 5.8% 2.1% 2.2%
Profit Margin 29.0% 11.7% 24.0%
Activity Analysis Ratios:
Assets Turnover Ratio 0.2 0.1 0.1
Accounts Receivable Turnover Ratio 2.6 1.9 1.1
Capital Structure Analysis Ratios:
Debt to Equity Ratio 0.1 0.3 0.3
Interest Coverage Ratio 3.4 5.3 1.2
Taking the two liquidity analysis ratios, current and net working capital as seen in the table on the previous page, one can clearly see from its high current ratio that Google is in a far better position than both Yahoo and other firms in the Internet Information Providers Industry to quickly convert its assets into cash if the need arises. Google's high networking capital ratio, is an indication that the company also is more reliant on creditors to finance its abundant level of revenue producing ...
This file contains a formatted MS Word file containing a comparative financial analysis between Google and Yahoo. File also contains graphs, supporting tables, and reference sources.