Examine the financial performance of Google Inc. from the year 2011 to 2013

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INTRODUCTION:

The purpose of this report is to highlight the current financial statement of Google Inc. from year 2011 to 2013. The financial statement is divided further into three parts such as balance sheet, income statement and cash flow of the Google Inc.

Google Inc. was established in September 1998 by Sergey Brin and Larry Page to "enhance the ways individuals interface with data."It is headquartered in Googleplex, California, United States. This incomprehensible organization furnishes clients with endless choices to tackle and comprehend the plenty of data accessible to them. Google amasses its assets in its inquiry motor, working frameworks, promoting, and venture. By sorting through its file of sites, Google chooses the sources most applicable to its clients, making an internet searcher that is not difficult to utilize and rapidly gives quality results. The organization depends on its center guideline "it’s best to do one thing outrageously well"—and always keeps on developing its pursuit engineering. Google is likewise known for its different working frameworks. Through developments in telephone innovation, web searching, TV, and electronic books, Google continually changes the way individuals live. The organization presented its Android working framework as a free stage that can be introduced on any cell phone to "give buyers an all the more effective portable experience." Google has additionally made its own particular web program to enhance the way its clients get to the web, as well as Google TV—a stage that takes into account the buyer to experience the web on their TV furthermore Google Books—an online hotspot for using the substance from printed books electronically. 91 % of Profit for google comes from Adwords. The main competitors for google are Yahoo, Facebook, Aol etc…Google has an global market share of 58% compared to yahoo 22%. Currently google has about 47,756 full-time employees - 18,593 in research and development, 15,348 in sales and marketing, 6,563 in general and administrative, and 7,252 in operations. The greater part of Google's full-time workers are likewise value holders, with huge aggregate representative proprietorship.

ANALYSIS OF BALANCE SHEETS:

From year 2012 to year 2013 Google’s total assets have increased by over $17 billion. Balance sheet reveals that total assets, liabilities, and stockholders’ equity increased by 32.85% in 2013 using 2012 as a base year. The organization's biggest rate increment among resources happened in the Non-attractive Equity Securities account, which understood a 305.53% expansion over the earlier year, emulated by Property and Equipment, which amassed an extra 51.07% in resources

The biggest increment inside Property, Plant and Equipment was a $4,862 million increment in area and structures, which incorporated the securing of an office constructing in New York City Total Assets as a base exhibited that the larger part of all benefit records included on the monetary record changed just somewhat in rate esteem, however general remained genuinely steady. The two most prominent special cases seen in the 2013 asset report are the presentation of the record for Receivables under Reverse Repurchase Agreements and the disposal of the record for Income Taxes Receivable.

Google uncovers that it bought almost 40 organizations for pretty nearly $700 million amid the year, which created consequent increments in the records for Goodwill, Patents and Developed Technology. Google's obtaining of these organizations, and in addition its development of area and structures, was likely a standout amongst the most noteworthy reasons for the organization's copious increment altogether resources for 2013.

Total Current Liabilities expanded by 356.78% substantially more quickly than Total Assets. Then again, the 2013 accounting report additionally saw the presentation of new records for Short-term Debt, Securities Lending Payable, and Income Taxes Payable, which by and large record for $4,884 million of the $6,654 million dollar increment altogether present liabilities. What's more, the estimation of Total Stockholders' Equity as a rate of Total Assets diminished by just about 9% in 2013, recommending that the obtaining of huge numbers of Google's extra resources were financed by obligation instead of value. Huge decreases were perceived in the record for Income Taxes Payable, which diminished by 18.67% in 2013, and the record for Other Long-term Liabilities, which was decreased by 11.55%. No particular clarifications were given in the yearly appear for this lessening; notwithstanding, it may propose that the organization's long haul obligation may have been refinanced or essentially paid off throughout the span of the 2013 financial period.

ANALYSIS OF INCOME STATEMENT:

On may 22nd 2012 Google bought Motorola. Google section incomes expanded $9,511 million from 2012 to 2013. This increment came about principally from an increment in publicizing incomes created by Google sites and an increment in different incomes, and to a lesser degree, an increment in promoting incomes produced by Google Network Members' sites. The increment in different incomes was mostly determined by higher deals identified with computerized substance and fittings products.the increment in publicizing incomes for Google sites and Google Network. Parts' sites come about essentially from an increment in the quantity of paid navigates our publicizing projects, as paid clicks on Google sites and Google Network Members' sites expanded more or less 25% from 2012 to 2013. The increment in the quantity of paid clicks created through our promoting projects was because of certain adaptation upgrades including new and wealthier promotion organizes, an increment in total movement over all stages, the proceeded with worldwide extension of our items, sponsors, and client base, and additionally an increment in the quantity of Google Network Members, halfway counterbalance by certain publicizing strategy changes.. Normal expense for every click on Google sites and Google Network Members' sites diminished more or less 8% from 2012 to 2013. The lessening in the normal expense for every click paid by our publicists was determined by different elements, for example, the presentation of new items and in addition changes in property blend, stage blend and geological blend, and the general reinforcing of the U.s. dollar contrasted with certain outside coinage. While Motorola Mobile section income (Revenue) expanded $307 million from 2012 to 2013. The increment was because of more or less seven months of results being incorporated in 2012 while twelve months of results were incorporated in 2013 and a 14% expansion in normal offering value identified with new item dispatches and changes in item blend amid the year, halfway balance by a 6% lessening in units dispatched amid 2013. We note that comes about somewhere around 2012 and 2013 are not similar because of the noteworthy rebuilding exertions to improve the item portfolio finished over the nineteen-month period. The increment in the Motorola Mobile fragment incomes from 2011 to 2012 resulted from the consideration of incomes from the Motorola Mobile section of $4,136 million consequent to the procurement in May 2012.

Expense of incomes for the Google portion expanded $4,708 million from 2012 to 2013. The increment was because of expansions in movement procurement expenses of $1,302 million ensuing from more circulation charges paid, more expenses paid for extra activity coordinated to our sites, and also more sponsor expenses created through Adsense program. While Cost of incomes for the Motorola Mobile fragment were not practically identical somewhere around 2012 and 2013 on the grounds that give or take seven months of results were incorporated in 2012 while twelve months of results were incorporated in 2013. Furthermore, different rebuilding exercises to disentangle the Motorola Mobile item portfolio consequent to the obtaining in May 2012.

R & D costs for the Google fragment expanded $687 million from 2012 to 2013 and as a rate of Google portion incomes remained moderately level from 2012 to 2013. The increment in costs was basically because of an increment in the process of childbirth and offices related expenses of $596 million, to a great extent as an aftereffect of a 18% expansion in R & D work headcount. R & D work costs for the Google section expanded $708 million from 2011 to 2012 and as a rate of Google fragment incomes remained moderately level from 2011 to 2012. The increment in costs was fundamentally because of an increment in the process of childbirth and offices related expenses of $359 million, generally as a consequence of a 15% expansion in innovative work headcount, an increment in deterioration and gear related costs of $147 million, and an increment in expert administrations cost of $66 million. While Research and improvement costs for the Motorola Mobile portion were not equivalent somewhere around 2012 and 2013 in light of the fact that roughly seven months of results were incorporated in 2012 while twelve months of results were incorporated in 2013. Moreover, we directed different rebuilding exercises to improve the Motorola Mobile item portfolio ensuing to the procurement in May 2012.

Income diminished $96 million from 2012 to 2013. This decline was basically determined by a lessening in the increase on divestiture of organizations (other than Motorola Home) of $245 million and an abatement in the acknowledged addition on ventures of $81 million, somewhat balance by a reduction in remote cash trade loss of $152 million and an increment in premium wage of $72 million. while it expanded $42 million from 2011 to 2012. This increment was principally determined by an addition on divestiture of business of $188 million in 2012, a debilitation charge identified with value speculations of $110 million in 2011, in part balance by an increment in outside cash trade loss of $152 million and a reduction in premium pay of $99 million.

STOCKHOLDERS EQUITY ANALYSIS:

As of December 31, 2012 and December 31, 2013, there were 15,833,050 and 9,455,085 shares of customary stock spared. Amid 2013, the quantity of shares hidden sold to chose monetary establishments under the TSO system was 671,190 at an aggregate estimation of $322 million, or a normal of $479.06 for every offer, including a normal premium of $2.35per offer. The premium is ascertained as the contrast between (a) the deal cost of the TSO and (b) the natural estimation of the TSO, which we characterize as the overabundance, if any, of the cost of our Class A typical stock at the time of the deal over the activity cost of the TSO. The TSO system was ended as of November 29, 2013. This did not have a material effect on our merged budgetary proclamations.

The aggregate award date reasonable estimation of investment opportunities vested amid 2011, 2012, and 2013 was $561 million, $489 million, and $223 million. The total natural estimation of all alternatives and warrants practiced amid 2011, 2012, and 2013 was $674 million, $827 million, and $1,793 million. These sums do exclude the total deals cost of alternatives sold under TSO program.

As of December 31, 2013, there was $188 million of unrecognized payment expense identified with remarkable representative investment opportunities. This sum is relied upon to be perceived over a weighted-normal time of 1.9 years. To the degree the real relinquishment rate is not the same as what we have assessed, stock-based remuneration identified with these honors will be unique in relation to our desires.

ANALYSIS OF CASH FLOW STATEMENT:

Goggle has an debt financing system of up to $3.0 billion through the issuance of business paper. Net returns from this system are utilized for general corporate purposes. At December 31, 2012 and December 31, 2013, we had $2.5 billionand $2.0 billionof remarkable business paper recorded as transient obligation with weighted-normal investment rates of 0.2% and 0.1%. In conjunction with this project, we have a $3.0 billion spinning credit office terminating in July 2016. The premium rate for the credit office is resolved focused around a recipe utilizing certain business rates. At December 31, 2012 and December 31, 2013, we were in consistence with the monetary pledge in the credit office, and noamounts were extraordinary under the credit office at December 31, 2012 and December 31, 2013. The evaluated reasonable estimation of the fleeting obligation approximated its convey esteem at December 31, 2012 and December 31, 2013.

Wage from proceeding with operations before pay charges included salary from household operations of $4,693 million, $5,311 million, and $5,828 million for the years finished December 31, 2011, 2012, and 2013, and pay from outside operations of $7,633 million, $8,075 million, and $8,668 million for the years finished December 31, 2011, 2012, and 2013.

RATIO ANALYSIS:

Google is plainly the pioneer among its essential commercial ventures. The organization is recorded with four Standard Industrial Classifications: Website Hosting, Internet Search Engines, Marketing Programs & Services, and Federal Government Contractors . Its main three contenders are AOL, Yahoo! Inc., and MSN, albeit monetary information for MSN was not accessible for this examination. Proportion investigations of the 2013 monetary information from Google and its main two rivals uncover the unrivaled effectiveness and gainfulness of the partnership inside its own particular industry. From a managerial point of view, Google's capacity to produce income and benefit from ordinary business operations may be accentuated. The organization's 2013 wage proclamation uncovers that almost $38 billion in income was generated—a substantial figure in correlation to AOL's $2.7 billion and Yahoo's! $7.8 billion. Google's terrible overall revenue was measured at 68.72% for the year, surpassing the business average of 63.43%. Net revenue was computed at 15.09%- -just about four times the business average of 6.80%. Return on value and profit for resources were 19.47% and 15.97%, individually, for the year furthermore measured in four times higher than industry medians. With respect to days of offers exceptional, Google is the main organization among its main two rivals for which the proportion was lower than the business average of 61.54 days. Days of offers exceptional measures of 42.62 days for Google, 47.05 days for AOL, and 61.54 days for Yahoo! recommend that Google may have tighter credit regulations than its rivals, which provides the organization with speedier accumulation of receivables for deals. One range in which Google was surpassed by a contender was aggregate resource turnover, delivering a degree of 0.59 contrasted with AOL's 0.77 and recommending that AOL is simply marginally more productive in utilizing its resources for create income. In any case, both of these proportions surpass the business average of 0.564.

A survey of these degrees and budgetary examinations ought to leave administration fulfilled that Google is for the most part surpassing the exhibitions of both its top rivals and different substances inside its industries. potential suppliers and loan bosses may decide to inspect Google's capacity to reach its present commitments keeping in mind the end goal to focus the danger connected with having business relations with the organization.

Google's present proportion in 2013 was 4.16:1—showing that the estimation of Google's present resources is in excess of four times more prominent than that of its present liabilities. This figure is fundamentally higher than AOL's present proportion of 2.22:1 and Yahoo's! 2.67:1, and additionally the business average of 3.74:14.google's money degree for 2010 measures in at 8.91:1, which recommends that right now the organization has an extremely solid capacity to reimburse its present commitments utilizing money, money equivalents, and attractive securities. A reckoning of the organization's working capital for 2013 uncovers an overabundance of $31,566 million in resource esteem over the estimation of current liabilities, and information from both the 2012 and 2013 Annual Reports of the organization give a deals to working capital degree of 1.01:1, showing that each dollar of working capital gives about the same sum in deals dollars. these figured degrees may be speaking to potential suppliers and lenders with worries about the probability of reimbursement in light of the fact that they obviously demonstrate that Google's capacity to reach its present commitments is exceptionally secure.

Moneylenders of long haul financing may likewise be intrigued by the organization's capacity to pay off its commitments over a more extended time of time. Starting 2013, Google's obligation proportion measured in at 24.14%, which may recommend that Google has an extremely direct partition of its aggregate resources financed by obligation, and that the estimation of these benefits incredibly surpasses the organization's aggregate obligation. The degree of obligation to value in 2013 remained at 27.32%, demonstrating that the estimation of aggregate shareholders' value additionally significantly surpasses that of aggregate liabilities and that the organization has sufficient assets from speculators to reach its long obligation.

CONCLUSION:

Google has unmistakably been prosperous as of late, and a SWOT examination of the enterprise might give a flash into the fate of the organization. Google's qualities incorporate its brand picture as one of the world's most significant brands, its unmistakable business position, its safe framework base, and its generous monetary development as of late. Google likewise has open doors for proceeded with accomplishment by presenting new items and administrations, making key acquisitions of more modest organizations, propelling in the portable publicizing market, and further advancing the Android advanced mobile phones. The real shortcoming of the organization is its absence of item combination an issue that may upset the organization from arriving at its full benefit potential, be that as it may is unrealistic to genuinely damage its general flourishing. Conceivable dangers to Google's future achievement incorporate savage rivalry inside its own particular industry, changes of trade rates, and hacking and security issues. Despite the fact that these dangers may be unsafe to Google, measures may be taken to control them so that the organization may keep on thriing as it has lately.

For past10 years, Google Inc. has been a pioneer in innovative developments, giving quality items and administrations to both shoppers and different business substances. Additional investigations of money related information from earlier years, uncovers that Google has proceeded to succeed and grow enormously as an issue of its triumphs. Examinations of the organization's present monetary position utilizing proportions and correlations to contenders propose that Google is presently in a safe monetary position in numerous regards and is prone to keep up this position in the prompt future. The organization that keeps on enhancing web innovation commonplace can be relied upon to remain a family name for some a long time to come.

REFRENCES:

  1. Datamonitor: Google Inc. (2011). Google Inc. SWOT Analysis, 1-10. Retrieved from EBSCOhost.
  2. Google Inc. (2011). 2010 Annual Report. Mountain View, CA: Google Inc.
  3. Google Inc. (2011). Corporate Information: Company. Retrieved from

http://www.google.com/intl/en/about/corporate/company/

  1. Google Inc. (2011). Reference USA. Retrieved from www.referenceusa.com
  2. Schein, Amy. (2011). Google Inc.: Competitive Landscape. Hoovers. Retrieved from

http://subscriber.hoovers.com

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