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GOOGLE

Profitability 2008 2009

Gross Margin % 60.4 62.6

Operating Margin % 30.4 35.1

Working Capital USD Mil 17,876 26,419Return on Assets % 14.8 18.05

Return on Equity % 16.6 20.3

EPS 13.31 20.41

Liquidity/Financial Health 2008 2009

Current Ratio 8.77 10.62

Quick Ratio 8.03 10.08

Financial Leverage 1.13 1.12

Debt/Equity

Efficiency 2008 2009

Payables Period 9.74 8.13

Cash Conversion Cycle 0.00 0.00

Receivables Turnover 9.07 8.13

Inventory Turnover 0.00 0.00

Fixed Assets Turnover 4.7 4.69

Asset Turnover 0.76 0.65

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GAP

Profitability 2008 2009 2010

Gross Margin % 36.1 37.5 40.3

Operating Margin % 8.3 10.7 12.8

Earnings Per Share USD 1.05 1.34 1.58Working Capital USD Mil 1,653 1,847 2,533

Return on Assets % 10.17 12.56 14.17

Return on Equity % 17.63 22.33 23.76

Liquidity/Financial Health 2008 2009 2010

Current Ratio 1.68 1.86 2.19

Quick Ratio 0.78 0.79 1.21

Financial Leverage 1.83 1.72 1.63

Debt/Equity 0.01

Efficiency 2008 2009 2010

Payables Period 38.33 39.82 43.12

Cash Conversion Cycle 0.00 0.00 0.00

Receivables Turnover 0.00 0.00 0.00

Inventory Turnover 5.98 5.89 5.68

Fixed Assets Turnover 4.88 4.69 5.11

Asset Turnover 1.92 1.89 1.83

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Financial Health Measurement

Financial ratios can shed light on the financial health of a business. Depending on the rati

business aspect being examined, a business' debt, inventory and sales health can be gage

liquidity ratios show how well a business meets short-term financial obligations. The wor

ratio is an example of a liquidity ratio. A good working capital ratio is 2-1, meaning a busi

should be twice a business' liabilities.

Inventory

Financial ratios, such as inventory turnover and days inventory, assist a business in mana

flow. Inventory turnover measures how quickly a business sells its inventory. It is also a a

to evaluate obsolescence, and track both over- and under-performing products. Days inve

measures how long it takes a business to run through its inventory. This ratio can also indi

that are selling well and those that are not.

Related Reading:How to Derive Financial Ratios

Profitability

Financial ratios can help a business determine how profitable the business is. One exampl

profit margin. This measures how well a company generates profit before general operati

inventory expenses are factored in. Net profit margin indicates if a business makes enoug

meet its operating costs and still show a profit. Return on Investment is a measurement t

to current and potential investors. This ratio shows how well money invested into the bus

utilized.

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