Google, a leader in Internet information searching, is being challenged by other big names in Internet technology. Compare and contrast Google?s business model and financialmanagement with Microsoft?s, which launched Bing.
Access Google and Microsoft?s annual reports and financial statements at their Websites. In addition to the text, you may access some other sites and or sources to understand the how to analyze an income statement and a balance sheet.
For example, the following sites can provide guidance:
Understanding the Income Statement at: http://www.investopedia.com/articles/04/022504.asp
Reading the Balance Sheet at: http://www.investopedia.com/articles/04/031004.asp
1. Calculate or identify from each company?s most recent annual report the six (6) specific financial ratios listed and provide as an appendix to the paper.
* Liquidity measurement ratio:
– Current ratio
* Profitability indicator ratios:
– Return on assets
– Return on equity
* Debt ratio:
– Debt ratio
* Operating performance ratio:
– Fixed asset turnover ratio
* Cash flow indicator ratio:
– Dividend payout ratio
* Investment valuation ratio:
– Price / Earnings ratio
2. Compare and contrast each company?s business model: (1) core business, (2) leading products and/or services, (3) management/leadership style, and (4) innovation track record.
3. Use the financial ratio analysis and explain which company is better able to withstand a major recession.
4. Explain what the profitability ratios can tell about Google and Microsoft?s performance and how that information would influence investing decisions.
5. Identify and explain three (3) primary financial-based guidelines that should be used when selecting which of these two companies to invest in.
6. Use a minimum of three (3) quality external resources from the last three (3) years to support the content of the paper.