...Financial Management: Microsoft and Google BUS508 Contemporary Business December 12, 2011 The purpose of this paper is to compare and contrast Microsoft’s and Google’s business model and financial management. Microsoft and Google don't share a stage often, being increasingly fierce competitors in areas such as Web search, mobile, and cloud computing, but both are big names in internet technology. Since 1975, when Bill Gates left college to start Microsoft with his friend Steve Ballmer, the company has been responsible for some of the biggest changes in the world of software and technology. Over nearly four decades, Microsoft has developed a broad range of products and services, and the company continues to focus on growing markets for its most popular creations, as well as the new products it launches. Microsoft is perhaps best known for its popular operating system, Windows. It was revolutionary when it was launched, and the many developments and improvements that have been provided by all the subsequent versions have cemented it’s position as the number 1 operating system in the world. Windows 7 is the latest offering, and looks set maintain the software’s popularity, even in an increasingly competitive market. Windows isn’t the only product designed by Microsoft that significantly improved the productivity of the personal computer; their Office suit of products has also become one of the most popular pieces of software in the world. Individually, or as a complete...
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...Comparing Microsoft and Goggle Vershawn Kirksey Professor: Hines Business 508 June 8, 2012 In today’s society many people are using the internet more and more to shop online, handle business transactions and surf the web for what interests them. Microsoft and Google are known to many people as internet giants. The two companies compete for business in the internet world by offering similar online business services. Microsoft also offers an array of computer products to consumers and businesses such as Windows 7, Microsoft office and MSN. Google’s main focus of business is its search engine that many people use today to surf the internet. This paper will compare and contrast Microsoft’s and Google’s business model, financial management system and explain which company could better withstand a major recession and at the same time, compare their financial ratios and decide which two companies that would be better to invest in. Microsoft was started in 1975 by Bill Gates and Paul Allen who developed an interpreter for basics programming language systems that has contributed to Microsoft’s being so successful. Microsoft is one of the largest technology companies in the world which specializes in developing and licensing computer software products such as Windows 7, Microsoft office, MSN and Bing. Microsoft’s management team is led by chief executive officer Steve Ballmer who also serves on the executive board, chairman Bill Gates, seven directors, and one...
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...Financial Management Financial Management June 4, 2012 Brenda A. Pitts Professor: Dr. Andrea Banto Abstract The following research is a look at Google, a leader in internet information searching, and its comparison to another big name in Internet technology, Microsoft, which launched Bing. The contents will provide a comparison and contrast of each company’s business model and financial management including an explanation of their financial ratio analysis, which will include a comparison and identification of both company’s most recent annual report with six specific financial ratios and of three (3) primary financial-based guidelines that should be used when selecting one of these two companies to invest in. This report will, also, give an explanation of what the profitability ratios can tell about Google and Microsoft’s performance and how that information would influence investing decisions. Financial Management What are the calculation / identification of Google and Microsoft’s most recent annual report for the six (6) financial ratios listed below? Liquidity Measurement Ratio (Current Ratio) Starting with the liquidity measurement ratio, which is also know as the current ratio, shows how each company is able to take its short-term assets and pay off its short-term liabilities. Short-term assets are classified as cash, marketable securities, accounts receivable, and inventory. Short-term debts consist of...
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...Financial Management 1. Google, a leader in Internet information searching, is being challenged by other big names in Internet technology. Compare and contrast Google’s business model and financial management with Microsoft’s, which launched Bing. Access Google and Microsoft’s annual reports and financial statements at their Websites. In addition to the text, you may access some other sites and or sources to understand the how to analyze an income statement and a balance sheet. For example, the following sites can provide guidance: 1. Calculate or identify from each company’s most recent annual report the six (6) specific financial ratios listed and provide as an appendix to the paper. 1. Liquidity measurement ratio: * Current ratio Google: 5.6 times Microsoft: 2.9 times 1. Profitability indicator ratios: * Return on assets Google: 15.6% Microsoft: 23.6% * Return on equity * Google: 19.5% * * Microsoft: 44.2% 1. Debt ratio: * Debt Equity ratio Google: 0.08 Microsoft: 0.2 1. Operating performance ratio: Asset turnover ratio Google: 0.6 Microsoft: 0.7 1. Cash flow indicator ratio: * Dividend payout ratio Google – Nil Microsoft- 0.64/2.69 =23.7% 1. Investment valuation ratio: * Price / Earnings ratio Google: 20.3 times Microsoft: 9.5 times 2. Compare and contrast each company’s business model:...
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...Calculate or identify from each company’s most recent annual report the six (6) specific financial ratios listed and provide as an appendix to the paper. Liquidity measurement ratio: Current ratio The current ratio is a popular financial ratio used to test a company's liquidity by deriving the proportion of current assets available to cover current liabilities. The concept behind this ratio is to ascertain whether a company's short-term assets are readily available to pay off its short-term liabilities Profitability indicator ratios: Return on assets This ratio indicates how profitable a company is relative to its total assets. The return on assets (ROA) ratio illustrates how well management is employing the company's total assets to make a profit. The ROA ratio is calculated by comparing net income to average total assets, and is expressed as a percentage. Profitability indicator ratios: Return on equity This ratio indicates how profitable a company is by comparing its net income to its average shareholders' equity. The return on equity ratio (ROE) measures how much the shareholders earned for their investment in the company. Operating performance ratio: Fixed asset turnover ratio This ratio is a rough measure of the productivity of a company's fixed assets with respect to generating sales. This annual turnover ratio is designed to reflect a company's efficiency in managing these significant assets. Cash flow indicator ratio: Dividend payout ratio This...
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...Google VERSUS Microsoft Strayer University Dr. Wade Ferguson BUS518 March 10, 2012 Although, both Google and Microsoft corporations have search engines in their portfolios, the core business for each is different and the diversity of their holdings, services and products really does not allow for a direct comparison of their actual offerings, but instead the financial statements, recent annual reports, and most importantly the financial ratios gleaned from these reports will help to identify which is more able to withstand the economic downturn and would be a more stable and profitable investment. Like so many of the dot.com companies, Google’s creation was conceptualized by computer science technicians. Larry Page and Sergey Brin met in 1995 while attending Stanford. They developed a search engine that was utilized by Stanford only, which they called Backrub. In 1997, Craig Silverstein joined the company, the company name was changed to Google and the search engine was released to the public. Google’s main core business is still its search engine used for internet browsing by individuals as well as businesses. In addition to the search engine, Google relies on its applications and advertisements to generate revenue. Googlemaps was created in 2005 and there are a wide variety of products and services including Android, its mobile platform, g-mail, Google earth, and Google venture. In 1975 Microsoft was developed by Paul Allen and a 19 year old, named Bill...
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...International Business Strategy II 1. Liu Shu 6509037 Introduction Google and Apple are giants in technology industry. These two companies provide innovate products or service and have unique organizational structure and culture. Under the increasing pressure of cost reduction and local responsiveness caused by globalization development, both Google and Apple are transforming into transnational organizations. This report will critically evaluate the comparative transnational effectiveness of Google and Apple in terms of motivation means and mentalities, layers of competitiveness, across boundaries management and corporation social responsiveness (CSR). 2. Motivations Means and Mentalities Initial incentives of Apple and Google expansion were different because of their distinct business focuses. Apple generates its profits by selling cutting-edge electronic devices, whereas Google even though has its own products such as some newly invented wearable devices, its benefit basically comes from their advertising. Therefore, Google do not have to secure key supply, and access to low-cost market. Nevertheless, seeking boarder market seems to be very important for both of these to enterprises. Moreover, the emerging motivations for Google and Apple are quite similar. After they began to expand, the forces which triggered the expansion in the first place, may turn into secondary when they make emerging global...
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...will also further build on the expansive Google acquisition model strategy and use of capital (Rosoff, 2012). Google enjoys proven success and market dominance in online advertising. With its graphical and video advertising successes through its YouTube platform and thousands of other sites, the company has established a significant competitive advantage in the market of display-advertising. With Netflix, Google would leverage its ad expertise to pair advertisements with video search requests and video themes/genres. This acquisition will continue the Google growth model of winning loyalty across every facet of the internet experience which translates into "overall time spent on Google services,[...]more time (for consumers to be) exposed to ads, [and] increased brand loyalty (Young, 2011). The acquisition would provide a diversified monetization model of membership/fee based service which provides strong direct customer and revenue competition to Hulu (streaming video currently offered only to users in Japan and the USA and its overseas territories), Amazon Prime Streaming and Apple's iTunes in the global market (Wikipedia, 2012). If leveraged by Google in the manner explained in the following report, Netflix’s current base of 21.5M subscribers paying $8 per month per contract will add significant profitability. This strategic revenues diversification -- in combination with a Hulu-like streaming advertisement model –...
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...Financial Analysis and Comparison I Google & Yahoo! Financial Analysis & Comparison I. II. INTRODUCTION CASH III. ACCOUNTS RECEIVABLE IV. REVENUE V. VI. VII. VIII. IX. LIABILITIES CONTINGENT LIABILITIES FIXED ASSETS MERGERS & ACQUISITIONS CONCLUSION II Google & Yahoo! Financial Analysis & Comparison I. INTRODUCTION Google Larry Page and Sergey Brin, two Stanford graduates, are the founders of Google. It was incorporated in California in September 1998 and reincorporated in Delaware in August 2003, the IRP raised an initial $1.67 billion. In October 2000, it launched Google AdWords, which forms the company’s primary source of revenue till date. Its advertising services include performance advertising and brand advertising. While Google is the internet search giant, it still has to keep innovating to ensure that it grows and doesn’t stagnate or go down the curve. This is the reason Google spends a considerable share of its revenue on acquisitions and research and development. Yahoo! Jerry Yang and David Filo, two Stanford graduates, are the founders of Yahoo!. It was incorporated in March 1995 and raised $33.8 million during its IPO. Yahoo began its operations as a Web Directory and its primary source of revenue has been advertising since then. It was a successful in 1990s, until Google started dominating the search engine industry starting mid 2000's Since then, Yahoo...
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...AMITY INTERNATIONAL BUSINESS SCHOOL | Fall of Another Smartphone Giant-Blackberry | Another Example of Technology Obsolescence and Strategic Failure | Submitted By: Ghan Shyam Rathi Once a pioneer and leading light in the smartphone market, BlackBerry is in a potentially terminal downward spiral. The Canadian company, formerly known as RIM (Research in Motion) established an iron grip on the enterprise and successfully bridged the gap from pager, to handheld computer, to smartphone. It was once the dominant smartphone due to its mobile email popular with businesspeople and tech-savvy consumers. Nicknamed “the CrackBerry” because it was so addictive, the device was declared by Oprah Winfrey to be one of her “favourite things”. US President Barack Obama could not bear to part with his BlackBerry and Madonna said she slept with hers under her pillow. In the last couple of years Apple's iPhone and Google's Android platform have taken over with a combined market share that tops 90 percent. Struggling to arrest a declining user base, amid poor sales of its latest devices, we are now hearing that BlackBerry might sell up. Brief: BlackBerry Limited, formerly known as Research In Motion Limited (RIM), is a Canadian telecommunication and wireless equipment company best known as the developer of the BlackBerry brand of smartphones and tablets. The company is headquartered in Waterloo, Ontario, Canada. It was founded by Mike Lazaridis, who served as its co-CEO along...
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...Running head: Apple Case Study Apple Strategic Plan Insert Name Here Insert Affiliation Here Executive Summary Apple Inc commonly known as Apple has effectively managed to be a successful company in a very competitive consumer electronics industry by been innovative and differentiating the company’s products with similar products in the markets by offering high quality products and good customer service while the actual manufacturing of the products is outsourced to trusted third party suppliers. On a wider perspective, the company has set high standards that even the company itself has to be on its level best to maintain the standards that it has set. Over the last few years, the consumer electronics market has become heavily commoditized which as a result has seen intense completion from competing firms in the industry where price has become the main aspect of the competition. By making use of the talented research and development team, Apple has been able to position its products as the best in terms of innovativeness, performance and reliability while compared to similar products in the market. However, Apple needs to continuously review its strategies to make sure that the company maintains its position in the industry for many years. This strategic plan review Apple’s performance and environment from various perspectives before strategic recommendations are made on the conclusion section. Among others the Internal Factor Matrix, External Factor Matrix, SWOT strategies...
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...Executive Summary Apple Inc commonly known as Apple has effectively managed to be a successful company in a very competitive consumer electronics industry by been innovative and differentiating the company’s products with similar products in the markets by offering high quality products and good customer service while the actual manufacturing of the products is outsourced to trusted third party suppliers. On a wider perspective, the company has set high standards that even the company itself has to be on its level best to maintain the standards that it has set. Over the last few years, the consumer electronics market has become heavily commoditized which as a result has seen intense completion from competing firms in the industry where price has become the main aspect of the competition. By making use of the talented research and development team, Apple has been able to position its products as the best in terms of innovativeness, performance and reliability while compared to similar products in the market. However, Apple needs to continuously review its strategies to make sure that the company maintains its position in the industry for many years. This strategic plan review Apple’s performance and environment from various perspectives before strategic recommendations are made on the conclusion section. Among others the Internal Factor Matrix, External Factor Matrix, SWOT strategies and SPACE matrix have all been used in order to establish Apple’s current position in the market...
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...534-Financial Management 3 March 2015 Abstract In my paper, I will provide the rationale for selecting Apple Incorporation for which to invest. I will also determine the profile of the investor for which this company may fit. I will then use five financial ratios to analyze the past three years of the company’s financial data. Based on my review I will determine the risk level of the company indicating key strategies they may use in order to minimize the perceived risk. Finally, I will provide my recommendations of Apple Incorporation as a potential investment opportunity. Investing in Apple Incorporation Rationale for Investment Consideration of several factors is imperative while making investment decisions. An investor should evaluate the company’s growth potential before channeling their funds for investment (Brigham & Houston, 2011). Apple is renowned for its leadership in innovations. The company has revolutionized the technology industry through a remarkable change. The introduction of iPhones and the evolvement of the iPhones to the latest iPhone 6 and six plus is incredible. Innovation continues to take a lead in Apple Inc. With the introduction of Apple watch and Apple apps, there is a positive outlook for Apple stock for potential investors. The company has invested in a vertical acquisition to spur growth. For instance, Apple acquired Beats Electronics, which has gone a long way towards growing Apple’s business. There...
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...Microsoft Corporation TABLE OF CONTENTS EXECUTIVE SUMMARY BUSINESS SUMMARY COMPANY DESCRIPTION INDUSTRY ANALYSIS COMPETITIVE ANALYSIS HISTORICAL PERFORMANCE FINANCIAL FORECASTS RISKS INDUSTRY RISK REGULATORY LEGAL RISK COMPANY RISK RISKS IN FORECASTS VALUATION DIVIDEND DISCOUNT MODEL PRICE MULTIPLES P/E P/B EV/EBITDA CONCLUSION REFERENCES APPENDICES EXECUTIVE SUMMARY Microsoft is the leading producer of software in the world. The company is made up of 5 divisions: Windows and Windows Live (Windows 7), Server & Tools (Windows Server 2008), Online Services (MSN Messenger), Microsoft Business Division (Office 2010) and Entertainment & Devices (Xbox). Microsoft recently launched Windows 7 and Office 2010. The company is showing growth in earnings for 2010. The largest divisions of the company are the Windows and Microsoft Business divisions. Sales were forecast in relation to GDP in the form of a regression. The calculation yielded a high R-square of 93.53%. GDP is expected to increase in the US at a rate ranging from 2.00% to 3.00% Year-on-Year. The Equity Valuation methods used are the Dividend Discount Model and 3 Relative Comparable measures with the industry: P/E, P/B and EV/EBITDA. DDM As Microsoft is a company in the mature phase in a mature industry, the GGM applied. The sustainable growth rate obtained was 10.79% and the required rate of return was 12.95% (calculated with a regression and single index model for β...
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...release of the Apple I, and incorporated the company on January 3, 1977, in Cupertino, California. Apple experienced modest, but above average growth from its founding until the mid-2000s when the popularity of its iPods and iTunes Store were joined by Apple’s release of the first iPhones. This combination, along with then-CEO Steve Jobs’ iconic leadership, catapulted Apple to successes rarely seen as it became the largest publicly traded company in the world by 2012. Our financial analysis of Apple revealed many things, not the least of which is the simple fact that Apple is a well-run, efficient, innovative company. Over the last three years, Apple realized a consistent positive trend in well over half of the twenty-two key financial ratios analyzed, highlighted by improvements in all profitability and inventory management ratios. It kept pace with the growth experienced in the technology and consumer electronics industries, despite significant gains in market share by giants such as Microsoft, Samsung, Motorola, Nokia, and multiple emerging players from China and India. Despite having a slightly below average P/E ratio and return on equity, other historical performance indicators give the impression that the company remains strong. There are two significant, but conflicting, items that were noted during our analysis that should be considered when discussing...
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