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ASSIGNMENT OF
Financial statement Analysis
Project name: Analysis of Submitted by: Ratio Safeer Ahmad
Due to the torrent of traffic and enthusiastic reception Yahoo! was receiving, the founders knew they had a potential business on their hands. In March 1995, the pair incorporated the business and met with dozens of Silicon Valley venture capitalists. Created by: SAFEER AHMAD
1 They eventually came across Sequoia Capital, the well-regarded firm whose most successful investments included Apple Computer, Atari, Oracle and Cisco Systems. They agreed to fund Yahoo! in April 1995 with an initial investment of nearly $2 million.
Realizing their new company had the potential to grow quickly, Jerry and David began to shop for a management team. They hired Tim Koogle, a veteran of Motorola and an alumnus of the Stanford engineering department, as chief executive officer and Jeffrey Mallett, founder of Novell's WordPerfect consumer division, as chief operating officer. They secured a second round of funding in Fall1995 from investors Reuters Ltd. and Softbank. Yahoo! launched a highly-successful IPO in April 1996 with a total of 49 employees. Today, Yahoo! Inc. is a leading global Internet communications, commerce and media company that offers a comprehensive branded network of services to more than 345 million individuals each month worldwide. As the first online navigational guide to the Web, www.yahoo.com is the leading guide in terms of traffic, advertising, household and business user reach. Yahoo! is the No. 1 Internet brand globally and reaches the largest audience worldwide. The company also provides online business and enterprise services designed to enhance the productivity and Web presence of Yahoo!'s clients. These services include Corporate Yahoo!, a popular customized enterprise portal solution; audio and video streaming; store hosting and management; and Web site tools and services. The company's global Web network includes 25 World properties. Headquartered in Sunnyvale, Calif., Yahoo! has offices in Europe, Asia, Latin America, Australia, Canada and the United States.
Assets
YEARS
Cash and Equivalents Restrictable Cash Marketable Securities Receivables Inventories Prepaid Expenses
in Millions of Dollars
10-Dec 1,526 1,358 1,029 433 4,346 2,551 -898 1,653 256 3,682 4,992 9-Dec 1,275 2,016 1,003 300 4,595 2,782 -1,355 1,427 356 3,640 4,918 8-Dec 2,292 1,160 1,060 233 4,745 2,305 -769 1,536 486 3,441 3,481 7-Dec 1,514 488 1,056 67 84 30 3,238 2,408 -1,077 1,332 611 4,002 300 2,747 6-Dec 1,570 1,032 931 218 3,750 1,955 -853 1,101 406 2,969 3,288
Current Deferred Income Taxes Other Current Assets Total Current Assets Gross Fixed Assets Accumulated Depreciation Net Fixed Assets Intangibles Cost in Excess Deferred Income Taxes Other Non-Current Assets
10,583
10,341
8,944
8,992
7,763
Total Assets
14,928
14,936
13,690
12,230
11,514
Liabilities
YEARS
in Millions of Dollars
10-Dec 9-Dec 8-Dec 7-Dec 6-Dec
Accounts Payable Short Term Debt Notes Payable Accrued Expenses Accrued Liabilities Deferred Revenues Current Deferred Income Taxes Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Income Tax Other Non-Current Liabilities Minority Interest Capital Lease Obligations Preferred Securities of Subsidiary Trust Preferred Equity Outside Shareholders' Equity -
152 -
109
1,140 413
368 13 140
Total Non-Current Liabilities Total Liabilities Preferred Shareholder's Equity Common Shareholder's Equity Total Equity Total Liabilities & Shareholder's Equity -
879 2,353
INCOME STATEMENTS
Dec-10 Operating Revenue Adjustments to Revenue 6,325 Dec-09 6,460 Dec-08 7,209 -
Cost of Revenue Gross Operating Profit Selling/General/Admin Expense Research & Development EBITDA (Operating Income Before Depreciation) Depreciation & Amortization Operating Income Interest Income Other Income, Net Total Income Before Interest Expense (EBIT) Interest Expense Income Before Tax Income Taxes Minority Interest Net Income from Continuing Operations Net Income from Discontinued Operations Net Income from Total Operations Normalized Income Extraordinary Income/Loss Special Income/Charges Income from Cum. Effect of Acct Change Total Net Income
-1,977 4,348 -1,753 -1,082 1,513 -683 830 23 671 1,466 1,466 -222 -13 1,232 1,232 1,290 -58 1,232
-2,172 4,288 -1,826 -1,210 1,252 -739 514 22 416 825 825 -219 -7 598 598 725 -127 598
-2,321 4,888 -2,268 -1,222 1,397 -790 607 86 594 693 -9 684 -259 -6 419 419 1,013 -594 419
-2,287 4,683 -2,244 -1,084 1,355 -659 695 130 8 1,000 1,000 -337 -3 660 660 658 2 660
-2,260 4,165 -1,851 -833 1,481 -540 941 143 -1 1,210 1,210 -458 -1 751 751 736 15 751
RATIO ANALYSIS
WORKING CAPITAL
Created by: SAFEER AHMAD
WORKING CAPITAL=(C.A - C.L) (in Millions of Dollars) 2276 938 3,040 2,877 2,720
CURRENT RATIO
Liquid Ratio
LIQUID RATIO = CURRENT ASSET - INVENTORY - PREPAID EXPENSE
YEAR 2006 2007 2008 2009 2010 LIQUID RATIO 3,532 3,171 4,512 4,295 3,913
OPERATING CYCLE
DEBT RATIO
DUPONT ROA
OPERATING ASSESTS T/O = NET SALES/AVG OP ASSESTS OPERATING ASSESTS T/O YEAR
2006 2007 2008 2009 2010 0.82 0.83 0.8 0.67 0.6
RETURN ON T.EQUITY
RETURN ON INVESTMENT
RETURN ON INVESTMENT = NPBIT/LONG TERM FUNDS
LONG TERM FUNDS = LONG TERM DEBTS+LONG TERM SHARE HOLDERS ONLY IN 2006 LONG TERM DEBT ARE AVAILABLE THERE IS NO DATA AVAILABLE OF LONG TERM DEBTS AND LONG TERM SHARE HOLDERS FOR OTHER YEARS SO NO CALCULATIONS WILL BE PERFORMED.
PROFIT/AVG OP ASSEST
YEAR 2006 2007 2008 2009 2010 DUPONT RETURN ON OP ASSEST 0.121 0.083 0.067 0.053 0.079
STOCK
YEAR 2006 2007 2008 2009 2010 RETURN ON COMMON EQUITY 0.082 0.07 0.04 0.05 0.098
46.55 -