Yahoo Inc
Yahoo! Inc.
Darlene Patton Woods
Max Miller
Charlene Pollette
William Macheska
Christine Ragona
Florida Institute of Technology
Business 5440
December 7, 2014
Table of Contents
Executive Summary 5
Introduction to Yahoo (NYSE:YHOO) 6
Company History 6
Main Products and Services 8
Financial Analysis 11
Liquidity Ratios: 11
Asset Ratio: 11
Profitability Ratios: 12
Debt Management Ratios: 13
Market Value Ratios: 14
Du Pont analysis 15
Weighted Average Cost of Capital (WACC) 16
Cost of Common Stock, rs = rRF + (RPM) bs 16
Estimation of the risk free rate rRF. 17
Estimation of the current market risk premium RPM. 17
Estimation of the stock’s beta coefficient bs 17
Cost of Preferred Stock. 17
Cost of Debt, rd 17
Appropriate Weights of Each Category 18
WACC 18
Is WACC Minimized? 19
Appropriateness of WACC for the Future 19
Future Cash Flows 19
Analysis 19
Inflation Cash flow estimates 21
Footnotes 23
Yahoo! Inc. Competitors Analysis (Look for a graph to this subtitle) 23
Past “Post-Audit” 23
Acquisition of Tumblr 24
Historical Stock Price 24
Security Analyst’s Reports 27
Dividends 30
Capital Structure 31
Managers 32
MERGER and INTERNATIONAL STRATEGY 35
Conclusion 36
References 37
Appendix 42
Exhibit 1 – Yahoo! Owned Sites & Services 42
Exhibit 2 - Analysis of Yahoo Financial Statements 49
Exhibit 3 – Historical Prices 53
Exhibit 4: Quarterly Stock Prices 60
Exhibit 5 Market Value 62
Exhibit 6 603
Exhibit 7 604
Exhibit 8 605
Executive Summary
The following report is an analysis of the financial health and future economic prospects of Yahoo! Incorporated for the fiscal years ending December 31, 2012 and December 31, 2013. Financial concepts and techniques utilizing key ratios were applied in the examination of Yahoo to analyze the liquidity, efficiency, capital structure, profitability, and valuation of the company. Yahoo’s favorable profitability and growth ratios demonstrate its exceptional governance and management. The company has enhanced their technology
Darlene Patton Woods
Max Miller
Charlene Pollette
William Macheska
Christine Ragona
Florida Institute of Technology
Business 5440
December 7, 2014
Table of Contents
Executive Summary 5
Introduction to Yahoo (NYSE:YHOO) 6
Company History 6
Main Products and Services 8
Financial Analysis 11
Liquidity Ratios: 11
Asset Ratio: 11
Profitability Ratios: 12
Debt Management Ratios: 13
Market Value Ratios: 14
Du Pont analysis 15
Weighted Average Cost of Capital (WACC) 16
Cost of Common Stock, rs = rRF + (RPM) bs 16
Estimation of the risk free rate rRF. 17
Estimation of the current market risk premium RPM. 17
Estimation of the stock’s beta coefficient bs 17
Cost of Preferred Stock. 17
Cost of Debt, rd 17
Appropriate Weights of Each Category 18
WACC 18
Is WACC Minimized? 19
Appropriateness of WACC for the Future 19
Future Cash Flows 19
Analysis 19
Inflation Cash flow estimates 21
Footnotes 23
Yahoo! Inc. Competitors Analysis (Look for a graph to this subtitle) 23
Past “Post-Audit” 23
Acquisition of Tumblr 24
Historical Stock Price 24
Security Analyst’s Reports 27
Dividends 30
Capital Structure 31
Managers 32
MERGER and INTERNATIONAL STRATEGY 35
Conclusion 36
References 37
Appendix 42
Exhibit 1 – Yahoo! Owned Sites & Services 42
Exhibit 2 - Analysis of Yahoo Financial Statements 49
Exhibit 3 – Historical Prices 53
Exhibit 4: Quarterly Stock Prices 60
Exhibit 5 Market Value 62
Exhibit 6 603
Exhibit 7 604
Exhibit 8 605
Executive Summary
The following report is an analysis of the financial health and future economic prospects of Yahoo! Incorporated for the fiscal years ending December 31, 2012 and December 31, 2013. Financial concepts and techniques utilizing key ratios were applied in the examination of Yahoo to analyze the liquidity, efficiency, capital structure, profitability, and valuation of the company. Yahoo’s favorable profitability and growth ratios demonstrate its exceptional governance and management. The company has enhanced their technology
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