Assignment 2 Working Capital
Assignment 2: Working Capital
Abstract
In this paper I’ll analyze the fundamental differences between the working capital structures and components for Google and Oracle, and speculate upon the main reasons why such differences exist; how each company could improve its working capital positions. As a Wall Street Analyst who has to recommend one of the companies as an investment to a company’s clients; based solely on that company’s working capital; as an Investment Banker who has to recommend loaning a substantial amount of capital to one company based solely on that company’s working capital.
Working capital structures
The selected companies that I have selected to compare are Google and Oracle. Google Inc. is a company that specializes on providing online tools such as search, differences between the working capital structures and components for each chosen company. Oracle Corporation is responsible for developing, marketing, and servicing of database and middleware software, system hardware and software applications. The company also offers consulting services in areas such as business architecture planning and design, and enterprise and information technology alignment. Both Google Inc. and Oracle Corporation have been performing well thus investments can be made in the companies.
In the financial year 2014 Google Inc. had a net income of $16.86 million, an increase of 17% compared to the previous year. The net profit margin for the company was registered at 29%. (morningstar.com)The balance sheet provides that the Morningstar.com had total asset amounting to 72.89 million which is an increase from previous year. Total organizational profits were amounting to 110.9 million and shareholders' equity of 87.31millions. The financial ratios for the company indicate that the company had a debt to equity ratio 0.05 indicating that its equity is enough to cover debt. The current ratio for the year 2014 was 8.0 showing
Abstract
In this paper I’ll analyze the fundamental differences between the working capital structures and components for Google and Oracle, and speculate upon the main reasons why such differences exist; how each company could improve its working capital positions. As a Wall Street Analyst who has to recommend one of the companies as an investment to a company’s clients; based solely on that company’s working capital; as an Investment Banker who has to recommend loaning a substantial amount of capital to one company based solely on that company’s working capital.
Working capital structures
The selected companies that I have selected to compare are Google and Oracle. Google Inc. is a company that specializes on providing online tools such as search, differences between the working capital structures and components for each chosen company. Oracle Corporation is responsible for developing, marketing, and servicing of database and middleware software, system hardware and software applications. The company also offers consulting services in areas such as business architecture planning and design, and enterprise and information technology alignment. Both Google Inc. and Oracle Corporation have been performing well thus investments can be made in the companies.
In the financial year 2014 Google Inc. had a net income of $16.86 million, an increase of 17% compared to the previous year. The net profit margin for the company was registered at 29%. (morningstar.com)The balance sheet provides that the Morningstar.com had total asset amounting to 72.89 million which is an increase from previous year. Total organizational profits were amounting to 110.9 million and shareholders' equity of 87.31millions. The financial ratios for the company indicate that the company had a debt to equity ratio 0.05 indicating that its equity is enough to cover debt. The current ratio for the year 2014 was 8.0 showing
References: Google Inc. Financials Report Retrieved November 16, 2014 http://financials.morningstar.com/ratios/r.html?t=GOOG Msn. (2014). Oracle Corporation. Financial Results. Retrieved November 16, 2014 from Http://Moneycentral.Msn.Com/Investor/Invsub/Results/Statemnt.Aspx?Lststatement=Balance&Symbol=Us%3aorcl&Stmtview=Qtr Oracle Corporation Financials Report Retrieved November 16, 2014 http://financials.morningstar.com/ratios/r.html?t=ORCL Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2014). Financial Accounting Theory And Analysis Text and Cases, Eleventh Edition.Hoboken: Wiley & Sons, Inc. Yahoo Finance. (2014). Google Inc. Key Statistics. Retrieved November 16, 2014 from Http://Finance.Yahoo.Com/Q/Ks?S=Goog+Key+Statistics Yahoo Finance.