Google is a publicly traded company which means that customer and stakeholders have access to the company’s financial information. The balance sheet and income statements are the two financial statements which gives a brief summary of a company’s overall financial condition. The balance sheet focuses and report figures of assets, liabilities and owner’s equity of the business. Assets are anything that a business has with a value such as furniture, liabilities are monies owe to others, and owner’s equity is the assets minus the liabilities. The income statement reports revenue and expenses for a period. Revenue is the money that a business earns by selling goods or services. Expenses are the money used in the process to earn the revenue. Google’s revenue is generated primarily from advertising online. The excess of revenue over expenses is the net profit. Generally on a company’s balance sheet assets are listed in the order in which they will be converted into cash. “First, start with items held primarily for conversion into cash and rank them in the order of their expected conversion. Then, follow with items held primarily for use in operations but that could be converted into cash, and rank them in the order of liquidity. Finally, finish with items whose costs you will defer to future periods or that you cannot convert into cash” (TDBank). Based on the information obtained from TDBank on the order in which assets should appear on balance sheet, Google’s assets that are included under the company’s current assets may be slightly out of order since Google list their Deferred Charges before the Prepaid and Other Assets. Google’s balance sheet lists all of the different forms of accounts that have a balance. The first two groups of assets are listed as current or short-term assets. These assets are Cash and cash equivalent; Marketable Securities; Accounts receivable(net allowance); Inventory; Receivable under reverse repurchase agreements;...
References: Chalmers, W. (2012). Google Inc. Announces Fourth Quarter and Fiscal Year 2012 Results. California: google.com.
Gramlich. N & Wright, A. (2011). Google inc. Financial Analysis For 2010
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