The trading world uses hazard analysis to aid in determining the health and viability of a given family. While risk of exposure ratio analysis alone does not provide queer answers about the health and viability of a company, it layabout raise austere questions that will help determine where the company stands in its industry. in that location be four types of financial ratios used in financial ratio analysis. ?Leverage ratios show how heavily the company is in debt; liquidity ratios measure how easily the firm can put its hands on cash; efficiency or derangement ratios measure how productively the firm is using its assets; and positivity ratios ar used to measure the firm?s excrete on its investment? (Brealey, Myers, Marcus, 2004). The two companies reviewed by this learning team are Google and yokel. Thesecompanies are found in the technology sphere of the business world under the industry category of net income nurture Providers. Comparing the two most recen t fiscal eld 2004 and 2005, both companies had a high coming back on its investment. In the years 2004/2005, Yahoo?s operating hit edge was 33% and 48% respectively, while Google?s was 20% and 35% respectively. The return on equity for Yahoo was 12% and 22% respectively, and Google was 14% and 16% percent respectively.
It is not solely pull what these numbers tell us but companies address ?information,? moment their product does not require a prominent breed of capital for product inventory in companionship to repay revenue. Although both companies realized profit margin gains in 2004 and 2005, Yahoo?s profit margin was large r and their return on equity was higher than! that of Google. The total asset swage shows that for all dollar of asset produced in 2004 and 2005, only .39 and .49 of gross sales were generated for Yahoo, and .96 and .60 for Google. This could... If you inadequacy to get a full essay, order it on our website:
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