Quick Overview of Google's Financial Performance

Quick Overview of Googles Financial Performance In looking at round of Googles asset management ratios we can assimilate some more than positive news. Over the past three years Googles arrive asset turnover has been decreasing. From .96 in �4, .60 in�5, to its current evaluate of .57. Compare this to the industry add up of .55 we can see that this indicates that Google is apply its fixed assets at least as intensively as other firms in the industry. Therefore, they seem to have about the proper(ip) summate of total assets relative to sales/revenue. Because of this low asset turnover we can infer that Google is experiencing healthy growth in proportion to sales. The asset managemnet ratio is useful to determine the amount of sales that are generated from each dollar of assets. Companies with low network margins tend to have high asset turnover, those with high service margins have low asset turnover. This brings us to the metrics tie in to net profit margins. Googles net profit margin has been increase from 12.51% in 2004 to its 2006 margin of 29.02%. Google is substantially outperforming the industry average of 6.9%. This high(prenominal) profit margin indicates a more profitable bon ton that has better control over its costs compared to its competitors.

To put this in simpler terms, Google is making nearly 13 cents more per dollar than the average companion in the industry. The next metric that is closely colligate to net profit margin is gross margin on sales. Since Google is not a true product based company there is internally no cost of goods sold figure. To ministration we took the operating income and devided it by the revenue. Based on this ratio we see that the trend for gross margin is also positive change magnitude from 20.07% in 2004 to 33.48% in 2006. This trend is good news for Google because companies with higher gross margins will have more money go forth over to spend on other business operations, such(prenominal) as research and development or marketing which is essential for businesses If you want to get a full essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper