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Celash, Byrne & Moovon Company Acquisition
Will Ralls
CCIS 338

The purpose of this research paper is to identify which company Celash, Byrne & Moovon should acquire. We have narrowed our search down to just two companies, Google and Yahoo. In order to make the decision between the two on which one we should acquire, we need to take close looks at who each company is, what they do, and the financial data of each.
Google is the world’s largest search engine. Although they started out simply as a search engine, they have branched out to many other markets. Gmail is a very popular email service. Their Android mobile phones are the most widely used of all cellphones. They also have a very popular web browser in Google Chrome. The Chromebook is gaining ground as a lightweight alternative to a traditional laptop computer. Other technology such as Google Maps, google drive, Google earth and others make Google a very innovative company that is not afraid to take on new challenges and expand into different markets.
Yahoo is very similar to Google in that it has its beginnings as a search engine. Through a web portal, a person is able to enter anything into a search field and get back results. Yahoo also has an email service that is widely used. Although Yahoo and Google have similar beginnings, they have chosen different paths since then. Yahoo has evolved into one of the world’s leading media companies. They have a large following, and having leading sports, finance, and entertainment news pages, among others. The focus for Yahoo is not creating new hardware and software like Google, but leading the way as a media conglomerate.
In order for us to decide which is the best company for us to buy, we must take a closer look into the financial data of both companies in order to compare them. The first ratio we shall consider is the profit margin. To calculate the profit margin we will take net income and divide it by sales. Company | Net Income | Sales | Profit Margin | Google | $12,920,000,000 | $55,519,000,000 | 23.2% | Yahoo | $1,376,576,000 | $4,680,380,000 | 29.4% |

As we can see by viewing the table, yahoo offers more in terms of return on sales than Google does.
The next piece of financial data to look at is the book value per share of each company. The book value per share, or net worth, tells us what is left for the common stockholder after debt and preferred stock obligation is removed from the equation. Company | Stockholder’s Equity | Shares Outstanding | Book Value per share | Google | $87,309,000,000 | 661,674,000 | $131.95 | Yahoo | $13,130,597,000 | 1,014,338 | $12.94 |

We see that Google clearly beats out Yahoo in terms of the net worth of the firm.
Lastly, we shall compare the current ratio of each company. The current ratio is a measure of the firm’s ability to pay off its current assets. We calculate this by dividing current assets by current liabilities. Company | Current Assets | Current Liabilities | Current Ratio | Google | $72,886,000,000 | $15,908,000,000 | 4.58 | Yahoo | $5,025,857,000 | | $1,340,312,000 | 3.75 |

Google also beats out Yahoo in liquidity. Although this sounds good on the surface, there are additional factors to consider, which we will further explore later.
These two companies started out in a very similar market and under similar circumstances. What started out as simply giving internet users an easier path to finding material they were looking for online turned into something much bigger in the case of both companies. Although they started out in similar fashion, what they have turned out to become has changed greatly. Google is one of the most innovative companies of our time, always on top of the newest trends, or innovating new ones. Yahoo has become one of the go to places for news and information. By hiring people such as Katie Couric, they have started to create an identity as a news source. Based on our calculations so far, Google has the early lead as the company of choice to acquire. The huge difference in book value per share sticks out the most, even though yahoo has the slight upper hand in profit margin.

Works Cited

Block, S., Hirt, G., & Danielson, B. (2013). Foundations of financial management (Fifteenth ed.). New York, New York: McGraw-Hill Education.
Just What Is Yahoo Anymore, Anyway? (n.d.). Retrieved August 21, 2015.
Karch, M. (n.d.). What is Google? Retrieved August 21, 2015.

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