Google Case Financial Reporting
Introduction
In 31st January 2008, Google Inc. announced its financial results for the quarter and fiscal year ended 31st December 2007. CEO Eric Schmidt was very pleased with the performance of the Google in terms their core value, growing reputation, techniques to manage their operating expenses. The financial statement was on the GAAP financial measures that are most directly comparable to non-GAAP financial measures. The raising cost on R&D, sales & marketing, and general administrative and largely unexpected to meet Wall Street and market estimation are the biggest concern for the Google. The downfall in their stock after their quarterly report of that period is mainly due to above listed issues.
Analysis
According to the report from 2007 financial Tables, the biggest source of total advertising revenue is Google web sites, $3.377 million (55%) in 2005, $6.332 million (60% )in 2006 and $10,624 million (64%) in 2007. Revenues increased from $6.138 million in 2005 to $10,604 million in 2006 and $16,593 million in 2007. This is 73% growth from 2006 to 2007 and 56% growth from 2006 to 2007. The growth of Google web sites is 88% in 2006 and 68% in 2007. The growth of Google Network web sites is 55% in 2006 and 39% in 2007. So Google web sites growth is faster than Google Network web sites. (Question f)
The income from Operations increased 43% in fiscal year 2007 and the revenue increased 56%. So the growth in income from Operations is less than Revenue growth. They spend more on research and development and sales and marketing for aggressive promotion, which leads in increase in expenses compared to income (Question g). The revenue growth and operating margin growth are 51% and 36% in the fourth quarter 2007 respectively, and 56.5% and 43.2% in the fourth quarter 2006. It can character the Google’s financial performance is very strong. Non-GAAP results $1.686 million is more than GAAP Actual $1.440 million in Income from operation in the fourth
In 31st January 2008, Google Inc. announced its financial results for the quarter and fiscal year ended 31st December 2007. CEO Eric Schmidt was very pleased with the performance of the Google in terms their core value, growing reputation, techniques to manage their operating expenses. The financial statement was on the GAAP financial measures that are most directly comparable to non-GAAP financial measures. The raising cost on R&D, sales & marketing, and general administrative and largely unexpected to meet Wall Street and market estimation are the biggest concern for the Google. The downfall in their stock after their quarterly report of that period is mainly due to above listed issues.
Analysis
According to the report from 2007 financial Tables, the biggest source of total advertising revenue is Google web sites, $3.377 million (55%) in 2005, $6.332 million (60% )in 2006 and $10,624 million (64%) in 2007. Revenues increased from $6.138 million in 2005 to $10,604 million in 2006 and $16,593 million in 2007. This is 73% growth from 2006 to 2007 and 56% growth from 2006 to 2007. The growth of Google web sites is 88% in 2006 and 68% in 2007. The growth of Google Network web sites is 55% in 2006 and 39% in 2007. So Google web sites growth is faster than Google Network web sites. (Question f)
The income from Operations increased 43% in fiscal year 2007 and the revenue increased 56%. So the growth in income from Operations is less than Revenue growth. They spend more on research and development and sales and marketing for aggressive promotion, which leads in increase in expenses compared to income (Question g). The revenue growth and operating margin growth are 51% and 36% in the fourth quarter 2007 respectively, and 56.5% and 43.2% in the fourth quarter 2006. It can character the Google’s financial performance is very strong. Non-GAAP results $1.686 million is more than GAAP Actual $1.440 million in Income from operation in the fourth