Ashford University Google Ratio Analysis and Value Creation Review
Financial Ratio Analysis
you will be looking at financial ratios over time.
Go to S&P NetAdvantage CapitalIQ.
Find Google company and click on “ratios.”
Sort the ratios from the most recent on the left.
Download the ratios into a spreadsheet and include this with your project. (Note that you do not necessarily need to include the growth numbers at the bottom of the chart – growth over the year, over the last two years, etc.- but just the ratios themselves).
In a separate Word document, interpret the following ratios and compare across years. Identify if the pattern that you see represents a strength or weakness for each ratio.
Quick (acid test) ratio
Total asset turnover
Accounts receivable turnover
Then, explain why you said it represents a strength or a weakness. Explanations should include some insight as to why the ratio increased or decreased or stayed the same. It should be detailed – in other words, do not simply say “it went up” or “the number decreased,” but rather “the reason that the ratio represents a strength is because the firm is now collecting receivables faster due to having reduced accounts receivable and increased sales…” (for example.)
Summarize findings and make a statement about value creation.
In a separate paragraph, you will determine whether your company is creating value based on all three parts of your project: stock price analysis, CAPM results, and financial ratios.
Specifically, is your company creating value for shareholders? You need to answer this question directly. Support your statement with relevant ratios, stock price movements, and news events.
This statement is separate from your statements in the financial ratio analysis. This should be fairly detailed and consist of several paragraphs.
Note that this is not a summary of your project but instead a specific question as to whether you think your firm is creating value and why.
Any citation style (APA, MLA, Chicago/Turabian, Harvard)
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