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Google - Executive Summary

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Executive Summary - GOOGLE

The GOOGLE analysis shows that Return on Owner’s equity has marginally increased by 1.65% in FY10 over FY09.
Profitability ratio
Sales have increased by 23.97% in dollar value in FY10 over FY09. But, the Cost of sales has increased only by 17.78%.Earnings Before Tax has increased by 28.81% of revenue in FY10 over FY09. R&D expenses have increased by 32.32% in FY10 over FY09. Total Operating Expense has also increased by 23.47% in FY10 over FY09.
Activity ratio
Assets turnover ratio has decreased by 13.22% from 0.58 in FY2009 to 0.51 in FY2010. This is due to increase in Property Plant and Equipment and goodwill. They purchased an office building worth 1.8$billion. There were a number of acquisitions amounting to approximately 1billion dollars.
Goodwill ratio has decreased by 2.84% from 4.82 in FY 2009 to 4.69 in FY 2010.
Intangible Assets ratio has decreased by 7.97% from 30.52 in FY 2009 to 28.09 in FY 2010
Cash turnover has decreased by 13.21% from 0.97 in FY2009 to 0.84 in FY 2010.
Gearing ratio
The total gearing ratio for Google increased by 11.22% in FY10 with respect to FY09.. This is a compound effect of the Assets to Debt Ratio increasing by 17.58%, and the Debt to Equity Ratio decreasing by 5.41% during the financial year.
The above changes are an effect of an addition of a short term debt of about $3 billion in FY10. The total assets also increased by 42% during the same period, while the Owner’s Equity increased only by 28%

Conclusion
Even though the Gearing ratio has increased by 11.22% and profitability ratio by 3.5%, the turnover ratio has decreased by 13.22%. As a result, the ROOE has only marginally increased by

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