07 May Discussion Reply 2.3
The company I chose to evaluate is Alphabet Inc., which is the parent company of Google.
- The return on investment (ROI) is one performance measure that can be used for evaluation. Alphabet Inc.’s ROI 5-year average is 14.20, compared to the industry ROI 5-year average of 16.85. Since the ROI is positive, this would indicate the company is performing well. That being said, there may be more appealing investment opportunities since the industry ROI 5-year average is 16.85
- Receivable Turnover would be an activity ratio and demonstrates the company’s ability to collect money from customers. Alphabet Inc. has a Receivable Turnover of 7.73, whereas the industry has a Receivable Turnover of 8.47. This would indicate Alphabet Inc. has turned over their accounts receivable 7.73 times in the past year, collecting accounts receivable in 47.2 days on average. The industry average would be collecting accounts receivable in 43.1 days, turning over accounts receivable 8.47 times per year.
- The Debt to Equity ratio would be one financing ratio. This ratio indicates how aggressive a company has been with leveraging its growth with debt. Alphabet Inc.’s Debt to Equity ratio is 2.67 compared to the industry at 34.84. A Debt to Equity ratio greater than 2.0 can indicate a risky investment.
- The Quick Ratio is an indicator of short-term liquidity. Alphabet Inc.’s Quick Ratio is 5.99, compared to an industry Quick Ratio of 1.94. This would indicate that Alphabet Inc. has $5.99 of liquid assets to cover each $1 of current liabilities, while the industry only has $1.94 of liquid assets to cover each $1 of current liabilities. Based on this ratio, Alphabet Inc. is performing quite well.
Overall, I think the company chosen, Alphabet Inc., performs well when compared to the industry. While ROI is slightly lower, the company is less risky based in the Debt to Equity ratio and also has a lot of short-term liquidity when looking at the quick ratio. Receivable turnover is slightly longer than the industry, but there is not a huge gap. Overall, this company does well and would be a solid investment, in my opinion.
Alphabet Inc (GOOG.O) Financials. (2019, January 14). Retrieved January 14, 2019, from https://www.reuters.com/finance/stocks/financial-highlights/GOOG.O
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.