Verified Document

Accounting And Corporate Finance Is Term Paper

5% for FY2003 to 25.26% in FY2007. From this specific financial ratio it is clear that Microsoft is performing significantly above their competitors in terms of managing the long-term value of shareholder's equity. Another critical profitability ratio, Return on Assets (ROA), Microsoft again shows exceptionally strong performance relative to Google and Oracle. For FY2002, Microsoft deliver 11.52% on asset utilization, rising to 18.1% for FY2006. Google's ROA was 34.74% for FY2002 dropping to 1.66% in FY2006. For Oracle, ROA also dropped, from 20.85% in FY2003 to 12.36% in FY2007. Oracle's many acquisitions during these years has significantly dropped ROA. Oracle acquired PeopleSoft, Siebel Systems, Retek, and several smaller software companies, which has also diluted their Return on Equity (ROE) as well. Another key profitability ratio, Net Profit Margin (%), shows the volatility of Google as an investment relative...

Microsoft's Net Profit Margin (%) showed stability in the years included in this analysis, starting at 27.6% for FY2002, rising to 28.45% in FY2006. Oracle's Net Profit Margin (%) dropped slightly yet stayed flat during the analysis period, moving from 24.35% in FY2003 to 23.75% in FY2007. Google's volatility is shown in their performance on Net Profit Margin (%). From 22.67% in FY2002, dropping to 7.21% in 2003, then rising to 29.02% in FY2006 shows how volatile the Google business model can be when analyzed using profitability ratios.
When these three companies are compared on key liquidity indicators, Google's dominance on the Quick Ratio shows how well their advertising-based business model is working. On the Current Ratio, Google increased from 2.59 in FY2002 to 10 in FY2006. For Microsoft, their Current Ratio decreased from 3.81 in FY2002 to 2.18 in FY2006. For Oracle, their Current

Sources used in this document:
Assessing the relative risk of Microsoft as an investment begins with an assessment of profitability across each of the companies profiled. Return on Equity (ROE) Microsoft has grown from 15% from FY2002 to 31.42%in FY2006, more than doubling in value. Conversely ROE for Google has slipped from 57.29% for FY2002 sliding to 18.06% for FY2006. For Oracle, ROE has also slid from 36.5% for FY2003 to 25.26% in FY2007. From this specific financial ratio it is clear that Microsoft is performing significantly above their competitors in terms of managing the long-term value of shareholder's equity. Another critical profitability ratio, Return on Assets (ROA), Microsoft again shows exceptionally strong performance relative to Google and Oracle. For FY2002, Microsoft deliver 11.52% on asset utilization, rising to 18.1% for FY2006. Google's ROA was 34.74% for FY2002 dropping to 1.66% in FY2006. For Oracle, ROA also dropped, from 20.85% in FY2003 to 12.36% in FY2007. Oracle's many acquisitions during these years has significantly dropped ROA. Oracle acquired PeopleSoft, Siebel Systems, Retek, and several smaller software companies, which has also diluted their Return on Equity (ROE) as well.

Another key profitability ratio, Net Profit Margin (%), shows the volatility of Google as an investment relative to Microsoft or Oracle. Microsoft's Net Profit Margin (%) showed stability in the years included in this analysis, starting at 27.6% for FY2002, rising to 28.45% in FY2006. Oracle's Net Profit Margin (%) dropped slightly yet stayed flat during the analysis period, moving from 24.35% in FY2003 to 23.75% in FY2007. Google's volatility is shown in their performance on Net Profit Margin (%). From 22.67% in FY2002, dropping to 7.21% in 2003, then rising to 29.02% in FY2006 shows how volatile the Google business model can be when analyzed using profitability ratios.

When these three companies are compared on key liquidity indicators, Google's dominance on the Quick Ratio shows how well their advertising-based business model is working. On the Current Ratio, Google increased from 2.59 in FY2002 to 10 in FY2006. For Microsoft, their Current Ratio decreased from 3.81 in FY2002 to 2.18 in FY2006. For Oracle, their Current
Cite this Document:
Copy Bibliography Citation

Related Documents

Accounting - Corporate Finance How
Words: 311 Length: 1 Document Type: Thesis

The budgeting process requires the university to have a clear sense of its core values: What is more important -- a new athletic facility or maintaining high salaries for faculty? The way that a university education is transmitted to students will also be impacted by the budgetary process. Providing more online courses may cut facilities expenditures, but students will be deprived of the benefits of peer and professor interaction. These

Corporate Finance Tools in Daily Life Many
Words: 1029 Length: 3 Document Type: Essay

Corporate Finance Tools in Daily Life Many of the concepts associated with corporate finance also have applications in everyday life. A range of corporate finance tools are already used in everyday life, often without realization as corporate finance tools are often an extension of common financial practices. More complex corporate finance tools may also provide a great deal of potential to enhance daily life financial management. By looking at task associated

Accounting and Finance Henkel AG Is a
Words: 2826 Length: 10 Document Type: Essay

Accounting and Finance Henkel AG is a multinational company focusing its brand and technologies in three business areas that include Beauty Care, Laundry & Home Care and Adhesive Technologies. Established in 1976, the company holds its global market positions in both the consumer and industrial products with well-known brands that include Lactate, Persil, and Schwarzkopf. Henkel's headquarter is in Dusseldorf in German and the company has over 47,000 employees globally. Typically,

Corporate Finance 3a This Depends on the
Words: 519 Length: 2 Document Type: Multiple Chapters

Corporate Finance 3a) This depends on the project. b) Better than the company or industry average, whichever is higher. C) Higher than the cost of capital. d) e) over 0. The objection is based on speculation. Since we do not know what the future reinvestment rate is going to be, we must work with the best information we have today. Again, the objection is the same. A complaint that we have less than

Corporate Finance Investment Assessment Questions
Words: 2676 Length: 7 Document Type: Term Paper

28% This gives project B. An IRR of -0.028% Part C Using the above assessments each may indicate which investment may be preferred. Using the payback period project a has a payback period of 4 years, whereas project B. has a payback period of 3 years 8 months. If the fastest payback period is preferred than project B. will be chosen. The NPV which discounts the net revenues into a net present value shows

Corporate Finance Corporate Governance and
Words: 4499 Length: 14 Document Type: Essay

Or that he is to make expenses on dropping pollution outside the quantity that is in the best welfare of the business or that is mandatory by law in order to add to the social objective of improving the atmosphere (Friedman, 1970). Corporate culture has been established as an administration tool. Corporate culture can aid to attain corporate objectives comprising profit enlargement. Advocates of corporate culture as a tool propose

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now