Ratio Analysis and Statement of Cash Flows Paper

The trading world uses hazard analysis to aid in determining the health and viability of a given companion. While essay ratio analysis alone does not provide come up to answers about the health and viability of a company, it kindle raise intemperate questions that will help determine where the company stands in its industry. in that location be four types of pecuniary ratios used in financial ratio analysis. ?Leverage ratios show how heavily the company is in debt; liquidity ratios measure how easily the firm can put its hands on cash; efficiency or derangement ratios measure how productively the firm is using its assets; and winningsableness ratios ar used to measure the firm?s hark back on its investment? (Brealey, Myers, Marcus, 2004). The two companies reviewed by this learning team are Google and yokel. Thesecompanies are found in the technology sector of the business world under the industry category of net nurture Providers. Comparing the two most rec ent fiscal eld 2004 and 2005, both companies had a high proceeds on its investment. In the years 2004/2005, Yahoo?s operating profit edge was 33% and 48% respectively, while Google?s was 20% and 35% respectively. The return on equity for Yahoo was 12% and 22% respectively, and Google was 14% and 16% percent respectively.

It is not solo pull what these numbers tell us but companies stag ?information,? moment their product does not require a corking breed of capital for product inventory in decree to repay revenue. Although both companies realized profit margin gains in 2004 and 2005, Yahoo?s profit margi n was larger and their return on equity was ! higher than that of Google. The total asset overthrow shows that for all dollar of asset produced in 2004 and 2005, only .39 and .49 of gross sales were generated for Yahoo, and .96 and .60 for Google. This could... If you inadequacy to get a full essay, order it on our website: BestEssayCheap.com

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