Part -1

1. Name Of the company

Google lnc.

2. The Corporation’s stock exchange symbol and exchange traded on

The stock exchange symbol of Google is “GOOG” and its shares are traded on
New York Stock Exchange (NYSE). There are two types of common stock i.e.
Common stock type A and common stock type B. Common stock type A is
listed and traded on the stock exchange whereas common stock of type B is
not listed on any stock exchange.

3. State of Incorporation and Fiscal year end and year incorporated

Google is a public limited company and it is incorporated in the state of

Delaware. Its financial year ends on December 31st each year. Initially, Google
was incorporated in California in September 1998 and reincorporated in
Delaware in August 2003.

4. Nature of operations and member of what industry category

Google Inc., a technology company, maintains index of Web sites and other
online content for users, advertisers, Google network members, and other
content providers. It helps users to obtain instant access to relevant
information from its online index. Its products and services include
Google.com for search and personalization, which provides Google Web
Search, Google Images, Google Books, Google Scholar, Google Finance,
Google News, Google Videos, Google Blog Search, iGoogle and Personalized
Search, Google Product Search, Google Merchant Center, Google Custom
Search, Google Trends, Google Music Search, and Google Webmaster Tools.

5. Market price when you first begin monitoring performance and the
date
 The market price of the share was $492.98 on May 07, 2010 and I start to
monitor the performance of the company on April 19, 2010 when the price of
the share was $552.70.

The company share attained its maximum share price of $714.87 on

December 07, 2007.

Part-3

Google lnc

Google is a global technology leader focused on improving the ways people connect
with information. Innovation in web search and advertising has made the web site a
top internet property. Google maintain a large index of web sites and other online
content, which is made freely available through search engine to anyone connected
with an internet connection. The automated search technology helps people obtain
nearly instant access to relevant information from our vast online index.

The company was first time incorporated in California in September 1998 and
reincorporated in Delaware in August 2003.

The company generates revenue by delivering relevant, cost-effective online

advertising. In addition, the third-party web sites that comprise the Google Network
use the AdSense programs to deliver relevant ads that generate revenue and
enhance the user experience.

Further, I have selected “Google lnc.” On the basis of the following grounds:

• The company is a well known brand in the market of internet industry or

technology

• The company is a stable one and is the market leader of internet industry

Analytical review of company’s performance:

The company’s performance can be reviewed by its liquidity, profitability, solvency

and market test ratios.

Liquidity of the company:

Liquidity (the company’s ability to pay its short term debts on immediate basis) of
the company is very stable.

As the current ratio of the company is gradually increasing from 8.49 in 2007 to
10.62 in 2009 This can be evident from the below graph

Further, the company can collect its sales in 44 to 51 days. This represent the
efficiency of the collection department of the company.

Profitability of the company:

The company is in continuous growth. The sale of the company has increased by
$7,056 million in 2009 from 2007 sales of $16,593 million. Also, gross profit has
increased by $4,861 million in 2009 from $9,944 million in 2007. Moreover, the
gross profit has increased from 60% of sale in 2007 & 2008 to 63% in 2009. Further,
operating income of the company has also increased from $5,084 million in 2007 to
$8,312 million in 2008 recording an increase of $3,227 million.

These are depicted as below

Moreover, return on equity and return on assets have a stable look. Return on equity
move from $0.19 in 2007 to $0.15 in 2008 and later on have recorded improvement
to $0.18 in 2009. Also, return on assets decreased from $0.17 in 2007 to $0.13 in
2008 and later on improved it self to $0.16 in 2009.
The trend can be viewed as per the below graphs

Solvency of the company:

The company is very solvent as evident from the financial leverage ratio or debt to
equity ratio. The financial leverage ratio of the company was 11.66% in 2007 and
increased to 12.48% in 2009. This very nominal leverage depicts that the company
is not going for external borrowings. This can be plotted as follows:
Market Test Ratios:

The earning per share has recorded an increasing trend and has made the share an
attractive option for the investors. Although, the company is not paying any cash
dividend and also not intended to pay in near future but investors can earn profit by
trading this share in the stock exchange and earning of the share plays a very vital
role in determining the price of the share.

The basic earining per share has increased from $13.53 in 2007 to $20.62 in 2009
depicting a growth trend.
The diluted earning per share has also recorded a growth trend; it has increased
from $13.29 in 2007 to $20.41 in 2009.

But the same trend was not followed by the price to earning ratio of the company.

The price to earning ratio was 51 in 2007 and it has decreased to 26 in 2009.

Vertical Analysis

The vertical analysis of the company for the last three years is as follows:

Income Statement Analysis

Google Inc
Income Statement
In Million of USD
31-Dec- 31-Dec-
09 31-Dec-08 07

$ 100 $ 100 $ 100

Total Revenue 23,650.56 % 21,795.55 % 16,593.99 %
$ $ $
Cost of Revenue 8,844.11 37% 8,621.51 40% 6,649.09 40%

$
14,806.4 $ $
Gross Profit 5 63% 13,174.04 60% 9,944.90 60%

Operating Expenses
Selling General and $ $ $
Administrative 3,651.24 15% 3,748.88 17% 2,740.52 17%
$ $ $
Research Development 2,843.03 12% 2,793.19 13% 2,119.99 13%
$
Unusual expenses $ - 0% 1,094.76 5% $ - 0%

$ $ $
Total Operating Expenses 6,494.27 27% 7,636.83 35% 4,860.51 29%

$ $ $
Operating Income / (Loss) 8,312.18 35% 5,537.21 25% 5,084.39 31%
$ $ $
Other net 2.37 0% 4.52 0% (4.56) 0%

$ $ $
Income before tax 8,381.19 35% 5,853.60 27% 5,673.98 34%

$ 28 $ 19 $ 25
Income after tax 6,520.45 % 4,226.86 % 4,203.72 %

The cost of revenue was 40%of sale in 2007 and it decreased to 37% of sale in 2009
as a result the gross profit has increased from 60% of sale in 2007 to 63% of sale in
2009. Also, operating income has also increased from 31% of sale in 2007 to 35% of
sale in 2009 recording increase in operating income. Finally, income after tax has
also increased from 25% of sale in 2007 to 28% of sale in 2009.

Balance Sheet Analysis

Google Inc
Balance Sheet
In Million of USD

31-Dec- 31-Dec- 31-Dec-

09 08 07
Cash & Equivalents 5,895.01 15% 5,326.01 17% 6,081.59 24%
Short Term Investments 14,287.19 35% 7,189.10 23% 8,137.02 32%
20,182.2 12,515.1 14,218.6
Cash and Short Term Investments 0 50% 1 39% 1 56%
Accounts Receivable - Trade, Net 3,178.47 8% 2,642.19 8% 2,162.52 9%
Receivables - Other 0 0% 0 0% 0 0%
Total Receivables, Net 3,201.72 8% 2,642.19 8% 2,307.77 9%
Total Inventory 0 0% 0 0% 0 0%
Prepaid Expenses 836.06 2% 1,404.11 4% 694.21 3%
Other Current Assets, Total 644.41 2% 286.11 1% 68.54 0%
29,166.9 20,178.1 17,289.1
Total Current Assets 6 72% 8 64% 4 68%

Property/Plant/Equipment, Total - Gross 8,130.13 20% 7,576.34 24% 5,519.91 22%

Accumulated Depreciation, Total -3,285.52 -8% -2,342.50 -7% -1,480.65 -6%
Goodwill, Net 4,902.56 12% 4,839.85 15% 2,299.37 9%
Intangibles, Net 774.94 2% 996.69 3% 446.6 2%
Long Term Investments 128.98 0% 85.16 0% 1,059.69 4%
Other Long Term Assets, Total 678.73 2% 433.85 1% 201.75 1%

40,496.7 100 31,767.5 100 25,335.8 100

Total Assets 8 % 8 % 1 %

Accounts Payable 215.87 1% 178 1% 282.11 1%

Accrued Expenses 2,246.52 6% 1,824.45 6% 1,575.42 6%
Notes Payable/Short Term Debt 0 0% 0 0% 0 0%
Current Port. of LT Debt/Capital Leases 0 0% 0 0% 0 0%
Other Current liabilities, Total 285.08 1% 299.63 1% 178.07 1%
Total Current Liabilities 2,747.47 7% 2,302.09 7% 2,035.60 8%
Long Term Debt 0 0% 0 0% 0 0%
Capital Lease Obligations 0 0% 0 0% 0 0%
Total Long Term Debt 0 0% 0 0% 0 0%
Total Debt 0 0% 0 0% 0 0%
Deferred Income Tax 0 0% 12.52 0% 0 0%
Minority Interest 0 0% 0 0% 0 0%
Other Liabilities, Total 1,745.09 4% 1,214.11 4% 610.52 2%
Total Liabilities 4,492.55 11% 3,528.71 11% 2,646.13 10%
Redeemable Preferred Stock, Total 0 0% 0 0% 0 0%
Preferred Stock - Non Redeemable, Net 0 0% 0 0% 0 0%
Common Stock, Total 0.32 0% 0.32 0% 0.31 0%
Additional Paid-In Capital 15,816.74 39% 14,450.34 45% 13,241.22 52%
Retained Earnings (Accumulated Deficit) 20,082.08 50% 13,561.63 43% 9,334.77 37%
Treasury Stock - Common 0 0% 0 0% 0 0%
Other Equity, Total 105.09 0% 226.58 1% 113.37 0%
36,004.2 28,238.8 22,689.6
Total Equity 2 89% 6 89% 8 90%

40,496.7 100 31,767.5 100 25,335.8 100

Total Liabilities & Shareholders' Equity 8 % 8 % 1 %

Horizontal Analysis

Income Statement Analysis

Google Inc
Income Statement
In Million of USD
31-Dec-09 31-Dec-08 31-Dec-07

$ $ $
Total Revenue 23,650.56 9% 21,795.55 31% 16,593.99
$ $ $
Cost of Revenue 8,844.11 3% 8,621.51 30% 6,649.09

$ $ $
Gross Profit 14,806.45 12% 13,174.04 32% 9,944.90

Operating Expenses
Selling General and $ $ $
Administrative 3,651.24 -3% 3,748.88 37% 2,740.52
$ $ $
Research Development 2,843.03 2% 2,793.19 32% 2,119.99
$ - $ $
Unusual expenses - 100% 1,094.76 0% -

$ $ $
Total Operating Expenses 6,494.27 -15% 7,636.83 57% 4,860.51

$ $ $
Operating Income / (Loss) 8,312.18 50% 5,537.21 9% 5,084.39
$ $ - $
Other net 2.37 -48% 4.52 199% (4.56)

Income before tax $ 43% $ 3% $

 8,381.19 5,853.60 5,673.98

$ $ $
Income after tax 6,520.45 54% 4,226.86 1% 4,203.72

Balance Sheet Analysis

Google Inc
Balance Sheet
In Million of USD

31-Dec- 31-Dec- 31-Dec-

09 08 07
-
Cash & Equivalents 5,895.01 11% 5,326.01 12% 6,081.59
-
Short Term Investments 14,287.19 99% 7,189.10 12% 8,137.02
20,182.2 12,515.1 - 14,218.6
Cash and Short Term Investments 0 61% 1 12% 1
Accounts Receivable - Trade, Net 3,178.47 20% 2,642.19 22% 2,162.52
Receivables - Other 0 0% 0 0% 0
Total Receivables, Net 3,201.72 21% 2,642.19 14% 2,307.77
Total Inventory 0 0% 0 0% 0
- 102
Prepaid Expenses 836.06 40% 1,404.11 % 694.21
125 317
Other Current Assets, Total 644.41 % 286.11 % 68.54
29,166.9 20,178.1 17,289.1
Total Current Assets 6 45% 8 17% 4

Property/Plant/Equipment, Total - Gross 8,130.13 7% 7,576.34 37% 5,519.91

Accumulated Depreciation, Total -3,285.52 40% -2,342.50 58% -1,480.65
110
Goodwill, Net 4,902.56 1% 4,839.85 % 2,299.37
- 123
Intangibles, Net 774.94 22% 996.69 % 446.6
-
Long Term Investments 128.98 51% 85.16 92% 1,059.69
115
Other Long Term Assets, Total 678.73 56% 433.85 % 201.75

40,496.7 31,767.5 25,335.8

Total Assets 8 27% 8 25% 1

-
Accounts Payable 215.87 21% 178 37% 282.11
Accrued Expenses 2,246.52 23% 1,824.45 16% 1,575.42
Notes Payable/Short Term Debt 0 0% 0 0% 0
Current Port. of LT Debt/Capital Leases 0 0% 0 0% 0
Other Current liabilities, Total 285.08 -5% 299.63 68% 178.07
Total Current Liabilities 2,747.47 19% 2,302.09 13% 2,035.60
Long Term Debt 0 0% 0 0% 0
Capital Lease Obligations 0 0% 0 0% 0
Total Long Term Debt 0 0% 0 0% 0
Total Debt 0 0% 0 0% 0
Deferred Income Tax 0 0% 12.52 0% 0
Minority Interest 0 0% 0 0% 0
Other Liabilities, Total 1,745.09 44% 1,214.11 99% 610.52
Total Liabilities 4,492.55 27% 3,528.71 33% 2,646.13
Redeemable Preferred Stock, Total 0 0% 0 0% 0
Preferred Stock - Non Redeemable, Net 0 0% 0 0% 0
Common Stock, Total 0.32 0% 0.32 3% 0.31
Additional Paid-In Capital 15,816.74 9% 14,450.34 9% 13,241.22
Retained Earnings (Accumulated Deficit) 20,082.08 48% 13,561.63 45% 9,334.77
Treasury Stock - Common 0 0% 0 0% 0
- 100
Other Equity, Total 105.09 54% 226.58 % 113.37
36,004.2 28,238.8 22,689.6
Total Equity 2 27% 6 24% 8

40,496.7 31,767.5 25,335.8

Total Liabilities & Shareholders' Equity 8 27% 8 25% 1

Conclusion:

All this depict that the company is financially very strong and is able to pay its short
term maturities on immediate basis. Also, the company is making ample of profit
that has resulted in increase in earning per share of the company and have made
the share very attractive for the investors. But, the only discoursing factor is that
the company is not paying and has no plan to pay cash dividend.

Considering, the overall stable and growth oriented position of the company; it can
be advised to invest in it to earn the capital gains from the increase in sale price of
the share as compared to the purchase price of the share.