The company that I have selected for Financial Ratio analysis is GOOGLE.
The Ratios that I am going to analyze are grouped under four main headings: 1) Profitability
Ratio 2) Liquidity Ratio 3) Debt Ratio 4) Market Ratio
1. Profitability Ratio - Profitability ratios measure the firm's use of its assets and control of its
expenses to generate an acceptable rate of return.
a. ROE - Return On Equity - Measures the rate of return on the ownership interest
(shareholders' equity) of the common stock owners. ROE is viewed as one of the most
important financial ratios. It measures a firm's efficiency at generating profits from every
dollar of net assets (assets minus liabilities), and shows how well a company uses
investment dollars to generate earnings growth. ROE is equal to a fiscal year's net income
divided by total equity expressed as a percentage.
b. ROI - Return On Investment - Is the ratio of money gained or lost on an investment relative
to the amount of money invested.......
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