¶ … Google is a better value than Yahoo. This is because the company is involved in many different segments of the technology marketplace. They have a lower price earnings ratio and price to EBITDA. At the same time, the firm has a larger market capitalization, greater amounts of cash, low levels of debt and a management structure / strategy which are encouraging continuing innovation. In the future, this means that the firm will remain a dominant player inside the marketplace.
The Balance Sheets of Google vs. Yahoo
The balance sheets of Google and Yahoo reveal a number of different factors which are illustrating the financial strength of both firms. In the case of Google, it has a market capitalization of $292 billion, revenues of $53.10 billion, $50.10 billion in cash and $9.7 billion in debt. Moreover, the company has a price to book value of 2.28, a PE ratio of 16.56 and price EBITDA per share of 14.66. ("Google," 2013)
Yahoo has a market capitalization of $29.73 billion, $4.91 billion in revenues, $3.01 billion in cash and $121.47 million in debt. It also has a price to book value of 2.06, a PE ratio of 17.54 and a price to EBITDA per share of 18.75. These figures are showing how both companies have low amounts of debt in comparison with their revenues and they have lots of cash on their balance sheets. ("Yahoo," 2013)
Analysis of Google vs. Yahoo's Balance Sheets
The analysis of Google and Yahoo reveals that Google is a stronger company. This is because the firm has a larger market capitalization, revenues and cash. At the same time, the company has a lower PE ratio and price to EBITDA per share. However, the price to book value is indicating that Google is slightly higher in contrast with Yahoo. ("Google," 2013) ("Yahoo," 2013) (Goodwin, 2013)
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Yahoo! A Critical Analysis Yahoo! History Problem Areas for Yahoo Search Engine Industry Review Yahoo! In the Light of Porter's Theory Threat of New Entrants Threat of Substitutes Bargaining Power of Suppliers Bargaining Power of Customer Competition in the Industry Strategic Plans of Yahoo! Financials Yahoo! Stakeholders & Other Strategic Partners Strategic Challenges Strategy Implementation Realign the focus of Employees without layoffs Improve the Algorithm Apply the Algorithm Redeploy the Advertising Network Expand the Ad Network The Implementation of Outside Publishers Yahoo! is one of the pioneers of what virtual internet world
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Additionally, the risk factor is something to take into consideration. Firms that have very high debt ratios are not only closer to insolvency, but because they are riskier will also have higher borrowing costs. There is little to choose form in terms of solvency between these companies, but the higher debt ratio at Microsoft will ultimately be better for investors because more of their money is returned in the
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