Alphabet (Google) Inc. Financial Statements and Financial Ratios Analyzed from 2014 to 2018
“Alphabet Inc. (Google) 2018 Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan. In this book, the author selected Alphabet's 2018 10k, Alphabet's 2017 10k annual report, Alphabet's 2016 10k annual report, Alphabet's 2015 10k annual report, and Alphabet's 2014 10k annual report as the basis for information gathering. Once all Alphabet's 10k annual statements were collected, the author then inserted Alphabet's income statement information and Alphabet's balance sheet information into a customized financial template.
In this template, various graphs and charts were generated showing changes to Alphabet's revenues, profits, and other financial statement changes. With this complete, a brief analysis was done for each of Alphabet's important financial statement line items. Further, in the book, we also supply financial ratios for Alphabet's . for the last five years. Each financial ratio has a formula supplied. This allows you to better understand how the calculations were performed. On a final note, for each financial statement line item and financial ratio, we offer a brief analysis of the company’s trends and what the changes mean in relations to the financial statements and financial ratios.
Alphabet Inc.: Brief Summary
Alphabet is located at 1600 Amphitheatre Parkway in Mountain View, CA. The company competes in the technological sector. Their industry is related to Internet content and information. Most recent estimates of the company’s employee count is about 98,000. The firm is led by Lawrence Page. Other members of their executive team would include Sergey Brin, Ruth Porat, and David Drummond.
Alphabet Inc., commonly known as Google, offers Internet content and advertising services to residents and businesses in the United States, European Union, Middle East, Africa, Canada, and several other countries. Popular services provided by the firm include advertisements, digital content, cloud services, home connectivity, and other products and software services. The firm was established in 1998.
Section 1: Alphabet Inc. Income Statement Analyzed 2014 to 2018
In this section, I walk through a broad definition as to what an income statement is and why it is important. From this, I then discuss each of Alphabet's important income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I then offer an analysis of Alphabet's income statement line item from 2014 to 2018, in most cases.
Alphabet Income Statement 2018 |
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| Column1 | 2018 | 2017 | 2016 | 2015 | 2014 |
| Revenues | 136,819 | 110,855 | 90,272 | 74,989 | 66,001 |
| COGS | 59,549 | 45,583 | 35,138 | 28,164 | 25,691 |
| Gross Profit | 77,270 | 65,272 | 55,134 | 46,825 | 40,310 |
| SG&A | 24,459 | 19,765 | 17,470 | 15,183 | 13,982 |
| Depreciation | - | - | - | - | - |
| R & D | 21,419 | 16,625 | 13,948 | 12,282 | 9,832 |
| Other | - | - | - | - | - |
| Operating Expenses | 110,498 | 84,709 | 66,556 | 55,629 | 49,505 |
| EBIT | 26,321 | 26,146 | 23,716 | 19,360 | 16,496 |
| Other Income | 8,592 | 1,047 | 434 | 291 | 763 |
| Interest Expense | 114 | 109 | 124 | 104 | - |
| EBT | 34,913 | 27,193 | 24,150 | 18,965 | 17,259 |
| Taxes | 4,177 | 14,531 | 4,672 | 3,303 | 3,639 |
| Net Income | 30,736 | 12,662 | 19,478 | 16,348 | 14,136 |
Section 2: Alphabet Inc. Balance Sheet Analyzed from 2014 to 2018
For Alphabet Inc. balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define the Alphabet's balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2014 to 2018. Next, I then offer an analysis of Alphabet's balance sheet line item.
Alphabet Balance Sheet 2018 |
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| Column1 | 2018 | 2017 | 2016 | 2015 | 2014 |
| Cash | 16,701 | 10,715 | 12,918 | 16,549 | 18,347 |
| Short Term Investment | 92,439 | 91,156 | 73,415 | 56,517 | 46,048 |
| Account Receivable | 20,838 | 18,336 | 14,137 | 11,556 | 9,383 |
| Inventory | 1,107 | 749 | 268 | 491 | - |
| Other | 4,236 | 2,983 | - | - | - |
| Current Assets | 135,676 | 124,308 | 105,408 | 90,114 | 80,685 |
| Net PPE | 59,719 | 42,383 | 34,234 | 29,016 | 23,883 |
| Goodwill | 17,888 | 16,747 | 16,468 | 15,869 | 15,599 |
| Other | 2,693 | 2,672 | - | - | - |
| Total Assets | 232,792 | 197,295 | 167,497 | 147,461 | 131,133 |
| Accounts Payable | 4,378 | 3,137 | 2,041 | 1,931 | 1,715 |
| Accrued Expense | 26,142 | 18,733 | 13,062 | 10,636 | 9,455 |
| Accrued Taxes | 69 | 881 | 554 | 302 | 96 |
| Notes Payable | - | - | - | 3,225 | 2,009 |
| LT Debt - Current | - | - | - | - | - |
| Other | - | - | - | - | - |
| Total Current Liabilities | 34,620 | 24,183 | 16,756 | 19,310 | 16,805 |
| LT Debt | 4,012 | 3,969 | 3,935 | 1,995 | 3,228 |
| Other | 3,545 | 3,059 | 2,665 | 1,822 | 1,118 |
| Total Liabilities | 55,164 | 44,793 | 28,461 | 27,130 | 26,633 |
| Common Stock | 45,049 | 40,247 | 36,307 | 32,982 | 28,767 |
| Treasury | - | - | - | - | - |
| Retained Earnings | 134,885 | 113,247 | 105,131 | 89,223 | 75,706 |
| Other | - | - | - | - | - |
| Total Equity | 177,628 | 152,502 | 139,036 | 120,331 | 104,500 |
| Total Equity & Liability | 232,792 | 197,295 | 167,497 | 147,461 | 131,133 |
Section 3: Alphabet Inc. Financial Ratios Analyzed from 2014 to 2018
For this section, I have chosen about 16 different financial ratios to review for Apple Inc from 2014 to 2018. In reviewing each of Alphabet's financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of Alphabet's Financial ratio. Ratios calculated and analyzed for the last five years include:
- Alphabet's current ratio for 2014 to 2018
- Alphabet's quick ratio for 2014 to 2018
- Alphabet's cash ratio for 2014 to 2018
- Alphabet's total asset turnover for 2014 to 2018
- Alphabet's fixed asset turnover for 2014 to 2018
- Alphabet's Days Sales Outstanding for 2014 to 2018
- Alphabet's Inventory Turnover for 2014 to 2018
- Alphabet's Accounts Receivable Turnover for 2014 to 2018
- Alphabet's accounts payable turnover for 2014 to 2018
- Alphabet's return on assets (ROA) for 2014 to 2018
- Alphabet's return on equity (ROE) for 2014 to 2018
- Alphabet's profit margin for 2014 to 2018
- Alphabet's gross profit margin for 2014 to 2018
- Alphabet's operating profit margin for 2014 to 2018
- Alphabet's long-term debt ratio for 2014 to 2018
- Alphabet's debt to equity ratio for 2014 to 2018
- Alphabet's times interest earned for 2014 to 2018
Alphabet 2018 Liquidity Ratios |
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| Ratios | 2018 | 2017 | 2016 | 2015 | 2014 |
| Current Ratio | 3.92 | 5.14 | 6.29 | 4.67 | 4.80 |
| Cash Ratio | 0.48 | 0.44 | 0.77 | 0.86 | 1.09 |
| Quick Ratio | 3.89 | 5.11 | 6.27 | 4.64 | 4.80 |
| Net Working Capital | 8,057 | 7,049 | 11,666 | 15,727 | 16,464 |
Alphabet 2018 Asset Utilization |
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| Ratios | 2018 | 2017 | 2016 | 2015 | 2014 |
| Total Asset Turnover | 0.59 | 0.56 | 0.54 | 0.51 | 0.50 |
| Fixed Asset Turnover | 2.29 | 2.62 | 2.64 | 2.58 | 2.76 |
| Days Sales Outstanding | 55.59 | 60.37 | 57.16 | 56.25 | 51.89 |
| Inventory Turnover | 123.59 | 148.00 | 336.84 | 152.73 | #DIV/0! |
| Accounts Receivable Turnover | 6.57 | 6.05 | 6.39 | 6.49 | 7.03 |
| Working Capital Turnover | 16.98 | 15.73 | 7.74 | 4.77 | 4.01 |
| AP Turnover | 31.25 | 35.34 | 44.23 | 38.83 | 38.48 |
| Average Days Inventory | 0.34 | 0.41 | 0.92 | 0.42 | #DIV/0! |
| Average Days Payable | 0.09 | 0.10 | 0.12 | 0.11 | 0.11 |
Alphabet 2018 - Profitability Ratios |
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| Ratios | 2018 | 2017 | 2016 | 2015 | 2014 |
| Return on Assets | 13.20% | 6.42% | 11.63% | 11.09% | 10.78% |
| Return on Equity | 17.30% | 8.30% | 14.01% | 13.59% | 13.53% |
| Net Profit Margin | 22.46% | 11.42% | 21.58% | 21.80% | 21.42% |
| Gross Profit Margin | 56.48% | 58.88% | 61.08% | 62.44% | 61.07% |
| Operating Profit Margin | 19.24% | 23.59% | 26.27% | 25.82% | 24.99% |
| Basic Earning Power | 11.31% | 13.25% | 14.16% | 13.13% | 12.58% |
| ROCE | 13.28% | 15.10% | 15.73% | 15.11% | 14.43% |
| Capital Employed | 198,172 | 173,112 | 150,741 | 128,151 | 114,328 |
| ROIC | 34.19% | 24.63% | 41.67% | 35.73% | 32.26% |
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