Impact on EPS

Along with the above products, the company also generates money by selling of mobile application products, desktop applications, hardware operating systems and many other statistical tools. The money that the company makes from these products and services has a significantly positive impact on the earning per share of the company. The growth of the EPS shows that the earning per share is increasing significantly over the past 4 years and it is much higher than the industry average figure for the growth of EPS.

Profitability and Trend Analysis

We have computed a range of profitability ratios for Google Inc. First, if we look at the profit margin ratio of the company, then we can see that the profit margin has been consistent at around 21% approximately over the last 4 years and the ratio has been higher as compared to the industry average. The profit position of the company is strong and the company has been generating huge profits over the past 4 years.

After this, if we look at the trend of the gross margin ratio of the company, then we can see that the gross margin has increased and then slightly decreased for the company and in2016 it is lower at 61% compared to the industry average of 64%. The operating margin ratio of the company shows a sharp increase in the operating income of the company and this might be due to lower level of depreciation and other expenses that are incurred by the company. The operating margin for the company is higher at 26.27% in 2016 as compared to the industry average of 21.61%.

The earning per share growth of the company is tremendous and this growth in 2016 is much higher than the industry benchmark. The return on assets ratio for the company also shows a positive trend for the company and it has been increasing. This shows that the company is generating good returns on all of its asset investments. The return on equity ratio also shows a positive trend but it is lower than the industry average. The difference is too small and thus we can conclude that the company is generating good profits over the equity that has been invested by the shareholders of the company.

The DuPont Measure has also been calculated which shows the same ratio equal to ROE. Lastly, the equity multiplier, which measures the financial advantage of the company, shows an average ratio of 1.23 over the last four years. It means that the company is not financing a large portion of the company with the equity of the shareholders.

This is a good sign about the mix of debt and equity proportions of the company and as the level of debt for the company is low therefore, we can state that Google Inc is financially strong and is generating adequate profits for sustainable future operations of the advertising business model.

The profitability ratios, EPS growth and the return ratios for the company are…………………..

Impact on EPS

Along with the above products, the company also generates money by selling of mobile application products, desktop applications, hardware operating systems and many other statistical tools. The money that the company makes from these products and services has a significantly positive impact on the earning per share of the company. The growth of the EPS shows that the earning per share is increasing significantly over the past 4 years and it is much higher than the industry average figure for the growth of EPS.

Profitability and Trend Analysis

We have computed a range of profitability ratios for Google Inc. First, if we look at the profit margin ratio of the company, then we can see that the profit margin has been consistent at around 21% approximately over the last 4 years and the ratio has been higher as compared to the industry average. The profit position of the company is strong and the company has been generating huge profits over the past 4 years.

After this, if we look at the trend of the gross margin ratio of the company, then we can see that the gross margin has increased and then slightly decreased for the company and in2016 it is lower at 61% compared to the industry average of 64%. The operating margin ratio of the company shows a sharp increase in the operating income of the company and this might be due to lower level of depreciation and other expenses that are incurred by the company. The operating margin for the company is higher at 26.27% in 2016 as compared to the industry average of 21.61%.

The earning per share growth of the company is tremendous and this growth in 2016 is much higher than the industry benchmark. The return on assets ratio for the company also shows a positive trend for the company and it has been increasing. This shows that the company is generating good returns on all of its asset investments. The return on equity ratio also shows a positive trend but it is lower than the industry average. The difference is too small and thus we can conclude that the company is generating good profits over the equity that has been invested by the shareholders of the company.

The DuPont Measure has also been calculated which shows the same ratio equal to ROE. Lastly, the equity multiplier, which measures the financial advantage of the company, shows an average ratio of 1.23 over the last four years. It means that the company is not financing a large portion of the company with the equity of the shareholders.

This is a good sign about the mix of debt and equity proportions of the company and as the level of debt for the company is low therefore, we can state that Google Inc is financially strong and is generating adequate profits for sustainable future operations of the advertising business model.

 

This is just a sample partial work. Please place the order on the website to get your own originally done case solution

Share This