Alphabet Inc. Financial Statement and Financial Ratios Analysis

Alphabet (Google) Inc. Financial Statements and Financial Ratios Analyzed

A Beginner's Guide to Alphabet (Google) Financial Analysis - 2021

$5.99
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  • Included Easy to use format.
  • Included Summarized Income Statements and Balance Sheets for the last 5 years..
  • Included Popular financial ratios for the last 5 years included... with calculations and formulas!
  • Included Expert tips to help with financial statements analysis.
  • Included Expert tips to help with financial ratios analysis.
  • NOT Included-Identify and discuss financial trends for the company..
  • NOT Included-Expert financial analysis done by Paul Borosky, MBA.
  • NOT Included- Analyst "Letter Grades" for the company's ratios.
  • NOT Included-Free Annual Reports Download for (5 Years)

Alphabet (Google) Financial Report by Paul Borosky, MBA. - 2019

$9.99
  • Included Easy to download PDF File.
  • Included Easy to use format.
  • Included Summarized Income Statements and Balance Sheets for the last 5 years..
  • Included Popular financial ratios for the last 5 years included... with calculations and formulas!
  • Included Expert tips to help with financial statements analysis.
  • Included Expert tips to help with financial ratios analysis.
  • Included Identify and discuss financial trends for the company.
  • Included Expert financial analysis done by Paul Borosky MBA.
  • Included Analyst "Letter Grades" for the company's ratios.
  • Included Free Annual Reports Download for the company (5 years).

Hey All,

Thanks for visiting my Alphabet Financial Report page. On this page, you will be able to find preliminary information about Alphabet's (Google) current financial performance as well as some historical track records and trends. 

For a more detailed examination of Alphabet's financial performance, I offer two reports, which are "A Beginner's Guide to Alphabet Financial Analysis" and "Alphabet Financial Report by Paul Borosky, MBA."  Both reports are written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, and include:

  • Summarized income statements for the last 5 years.
  • Summarized balance sheets for the last 5 years.
  • Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is where I use plain English to explain concepts.

For a MORE in-depth review of the company's financial statements and ratios, make sure to buy my "Alphabet Financial Report".  The financial report includes all aspects of my "Beginner's Guide" plus a whole lot more...

  • Professional financial analysis of important income statements, balance sheets, and financial ratio trends.
  • "Letter Grade" is assigned to most financial statement line items and financial ratios to help you better understand their overall trends for the last 5 years (Starting in 2021).
  • Overall financial analysis summary for the company.

Enjoy the preliminary information and for a more detailed analysis, buy the financial report!

Sincerely,

Paul, MBA.

 

PDF/Downloadable Versions

Alphabet's (Google) 2021 Beginner's Guide to Financial Analysis

Table of Contents

  • Disclaimer 3
  • Forward 4
  • Income Statement 6
  • Alphabet’s Summarized Income Statements 6
  • Revenues 7
  • Cost of Goods Sold (COGS) 8
  • Selling, General, and Administrative Expenses (SG&A 8
  • Research and Development (R&D) 9
  • Operating Expenses 10
  • Earnings Before Interest and Taxes (EBIT 10
  • Interest Expense 11
  • Earnings Before Taxes (EBT) 12
  • Taxes 12
  • Net income 12
  • Tax Rate 13
  • Balance Sheet 15
  • Alphabet’s Summarized Balance Sheets 15
  • Cash 16
  • Short-Term Investments 17
  • Accounts Receivables 17
  • Inventory 18
  • Current Assets 19
  • Property, Plant, and Equipment (PP&E) 20
  • Total Assets 20
  • Accounts Payable 21
  • Accrued Expenses 22
  • Short-Term Debt 23
  • Total Current Liabilities 24
  • Long Term Debt (LT Debt) 25
  • Total Liabilities 26
  • Common Stock and Additional Paid-in Capital 27
  • Treasury 27
  • Retained Earnings 28
  • Total Equity 29
  • Financial Ratios 30
  • Alphabet’s Liquidity Ratios 31
  • Current Ratio 31
  • Quick Ratio 32
  • Cash Ratio 33
  • Alphabet’s Asset Ratios 35
  • Total Asset Turnover 36
  • Fixed Asset Turnover 37
  • Days Sales Outstanding 37
  • Inventory Turnover 38
  • Accounts Receivable Turnover 39
  • Accounts Payable Turnover 40
  • Other Asset Ratio Calculations 41
  • Working Capital Turnover 41
  • Average Days in Inventory 41
  • Average Days Payable 41
  • Alphabet’s Profitability Ratios 43
  • Return on Assets (ROA) 43
  • Return on Equity (ROE) 44
  • Net Profit Margin 45
  • Gross Profit Margin 46
  • Operating Profit Margin 46
  • Alphabet’s Debt Ratios 48
  • Debt Ratio 48
  • Debt to Equity Ratio 49
  • Times Interest Earned 50
  • Included - Free Bonus Downloads: Annual Statements for the Last Five Years (10k reports)!
  • Included - Expert financial analysis done by Paul Borosky MBA.
  • Included - Analyst "Letter Grades" for ratios.
  • **See Terms and Conditions.

 

 

Alphabet's (Google) 2019 Financial Report

Table of Contents

  • Disclaimer 3
  • Acknowledgments 4
  • Forward 5
  • About the Author 7
  • Company Summary 8
  • Financial Statement Introduction 10
  • Income Statement 11
  • Alphabet’s Income Statement – Summary Analysis 12
  • Income Statement Discussion 13
  • Balance Sheet 21
  • Balance Sheet – Summary Analysis 22
  • Balance Sheet Discussion 23
  • Financial Ratios 38
  • Liquidity Ratios 39
  • Liquidity Ratios - Summary Analysis 39
  • Liquidity Ratios Discussion 40
  • Current Ratio 40
  • Quick Ratio 41
  • Cash Ratio 42
  • Other Liquidity Ratios 43
  • Net Operating Working Capital 43
  • Asset Ratios 45
  • Asset Utilization Ratios - Summary Analysis 46
  • Asset Utilization Ratios Discussion 47
  • Total Asset Turnover 47
  • Fixed Asset Turnover 47
  • Days Sales Outstanding 49
  • Inventory Turnover 50
  • Accounts Receivable Turnover 51
  • Accounts Payable Turnover 52
  • Other Asset Ratio Calculations 53
  • Working Capital Turnover 53
  • Average Days in Inventory 53
  • Average Days Payable 54
  • Profitability Ratios 55
  • Profitability Ratios - Summary Analysis 56
  • Profitability Ratios Discussion 56
  • Return on Assets (ROA) 56
  • Return on Equity (ROE) 57
  • Profit Margin 58
  • Gross Profit Margin 59
  • Operating Profit Margin 60
  • Basic Earnings Power 61
  • ROCE 62
  • Capital Employed 62
  • Debt Ratios 63
  • Alphabet’s Debt Ratios - Summary Analysis 63
  • Debt Ratios Discussion 64
  • Long-Term Debt Ratio 64
  • Debt to Equity Ratio 65
  • Times Interest Earned 66
  • WACC 68
  • Book Value of WACC 68
  • Free Cash Flow (FCF) 70
  • Free Cash Flows – 2015 - 2019 70
  • Free Cash Flows – 5 Year Projections 71
  • Income Statement – Projections for 5 years 72
  • Income Statement – 5 Year Projections 72
  • Balance Sheet – Projections for 5 years 73
  • Balance Sheet – 5 Year Projections 73
  • Company Valuation and Intrinsic Stock Price 75
  • Appendix 1: Summarized Income Statement 76
  • Appendix 2: Income Statement – Percent of Sales    77
  • Appendix 3: Income Statement – Year over Year Growth   78
  • Appendix 4: Summarized Balance Sheet      79
  • Appendix 5: Balance Sheet as Percent of Total Assets         81
  • Appendix 6: Summarized Financial Ratios   82

Sample Financial Report

Sample Financial Report by Paul Borosky, MBA.
Financial Report Sample 2

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.  The most recent estimate 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.

Alphabet (Google) Financial Report Sources

“Alphabet Inc. (Google) 2019 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 report, the author selected Alphabet's 2019 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 of 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. 

 

Section 1: Alphabet Inc. Income Statement Analyzed

In this section, I walk through a broad definition of 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 2015 to 2019, in most cases.

Revenue Growth:

Over the last five years, Alphabet’s average annual revenue growth rate was approximately 21.2%.  In 2018, its annual revenue growth rate increased to 23% over the previous year.  However, in 2019, the growth rate fell to 18%.

This indicates that the firm may be leveling off in its revenue growth.  This could be a sign that the firm is entering a more mature phase of its business cycle.  If this is the case, then investors should expect a continued decline in revenue growth.

Cost of Goods Sold:

The company’s cost of goods averages approximately 26% of revenues over the last five years.  The company’s cost of goods fell from 30.6% in 2018 to 20.7% in 2019.  This shows that the firm is taking steps to reduce the costs of business.  As the organization further enters the maturity phase of its business cycle, cost-cutting such as this should be expected throughout the organization.

Aphabet (Google) Summary Income Statement 2021

Column1

2021

2020 2019 2018

2017

Revenues

                 257,637

                 182,527                  161,857            136,819

            110,855

COGS

                 110,939

                   84,732                    71,896              59,549

              45,583

Gross Profit

                 146,698

                   97,795              89,961              77,270

              65,272

 
SG&A

                   22,912

                   28,998                    35,569              24,459

              19,765

Depreciation

                   11,555

                   12,905                    10,856

               8,164

                6,103

R & D

                   31,562

                   27,573                    26,018              21,419

              16,625

Other

                           -

                           -                      1,697                5,071

                    -

Total Operating Expenses

                   66,029

                   69,476                    74,140                    59,113

                     42,493

EBIT

                   78,714

                   41,224                    34,231              26,321

              26,146

Other Income

                   12,020

                     6,858                      5,395                8,592

                1,047

Interest Expense

                        346

                        135                         100                  114

                  109

EBT

                   90,734

                   48,082                    39,625              34,913

              27,193

Taxes

                   14,701

                     7,813                      5,282                4,177

              14,531

Net Income

                  76,033

                  40,269                   34,343            30,736

            12,662

 

Section 2: Alphabet Inc. Balance Sheet Analyzed

For Alphabet Inc.'s balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define Alphabet's balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019.  Next, I then offer an analysis of Alphabet's balance sheet line item.

Cash:

Alphabet’s cash position has grown from $16 billion in 2015 to 18.5 billion in 2019.  As compared to total assets, the cash position fell from 11.2% in 2015 to 6.7% in 2019.  In reviewing this information, it seems like the organization has done a better job allocating cash as a percentage of total assets even though its dollar amount cash position increased.  In other words, just because the dollar amount for cash increased, it does not mean that they are doing a poor job managing the cash.

Short-term Investments:

In the last five years, Alphabet has almost doubled its short-term investments.  This shows that the firm is continually attempting to divert cash into a more useful asset, which is short-term investments.  A better strategy for the use of cash could be to pay out dividends to investors.  Not only will this improve the stock price, but it will also be a better usage of total assets.

Alphabet (Google 2021) Summary Balance Sheet

Column1

2021 2020 2019 2018

2017

Cash

                     20,945

                 26,465                  18,498            16,701

           10,715

Short Term Investment

                   118,704

               110,229                101,177            92,439

           91,156

Account Receivable

                     39,304

                 30,930                  25,326            20,838

           18,336

Inventory

                       1,170

                      728                       999              1,107

               749

Other                              -                         -                         -                  -                  -
Current Assets

                 188,143

             174,296              152,578        135,676

       124,308

Net PPE

                     97,599

                 84,749                  73,646            59,719

           42,383

Goodwill

                     22,956

                 21,175                  20,624            17,888

           16,747

Other                              -                         -                         -                  -                  -
Total Assets

                 359,268

             319,616              275,909        232,792

       197,295

Accounts Payable

                       6,037

                   5,589                    5,561              4,378

             3,137

Accrued Expense

                     45,125

                 39,717                  31,562            26,142

           18,733

Accrued Taxes

                          808

                   1,485                       274                  69

               881

Notes Payable                              -                         -                         -                  -                  -
LT Debt - Current                              -                         -                         -                  -                  -
Other                              -                         -                         -                  -                  -
Total Current Liabilities

                     64,254

                 56,834                  45,221            34,620

           24,183

LT Debt                      14,817                  13,932                    4,554              4,012              3,969
Other                              -                         -                         -                  -                  -
Total Liabilities

                 107,633

               97,072                74,467          55,164

         44,793

Common Stock

                     61,774

                 58,510                  50,552            45,049

           40,247

Treasury                              -                         -                         -                  -                  -
Retained Earnings

                   191,484

               163,401                152,122          134,885

         113,247

Other                              -                         -                         -                  -                  -
Total Equity

                 251,635

             222,544              201,442        177,628

       152,502

Total Equity & Liability

              3,592,668

             319,616              275,909        232,792

       197,295

 

Section 3: Alphabet Inc. Financial Ratios Analyzed

For this section, I have chosen about 16 different financial ratios to review for Apple Inc from 2015 to 2019.  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 for the last five years include:

Alphabet (Google) Current Ratio

Alphabet’s current ratio ended 2015 at 4.6.  In 2019, the current ratio fell to 3.4.  This shows that the firm is attempting to better utilize its cash by transferring it from the cash line item to short-term investments.  From an investor’s perspective, the company should maintain the strategy until its current ratio is about 1.5 or 2.

Alphabet (Google) Fixed Asset Turnover

The organization’s fixed asset turnover fell from 2.58 in 2015 to 2.2 in 2019.  This indicates that the company may have excess property, plant, and or equipment.  An excellent strategy in this situation is to divest or sell some of the hard assets for liquid currency.  Unless the company may have taken on the additional fixed assets in hopes of future growth. Which may be the case in the situation.  From this, investors should play a wait-and-see strategy in relation to whether the firm better utilizes its fixed assets over the next several years.

Alphabet (Google) Return on Equity

The company’s return on equity has increased from 13.6% in 2015 to 17% in 2019.  Again, the company is making more money year-over-year on equity invested.  The return on equity may not be as high as some other technology companies.  But, the continuous growth of the return on equity over a five-year period is quite impressive.

Alphabet (Google) Debt Ratio:

Alphabet’s debt ratio has ranged between 1.4% to 2.01%.  In 2019, its debt ratio was 1.65%.  From an investor’s perspective, the company should be utilizing significantly more debt as compared to equity for growth and operations.  There is a multitude of reasons for this.  Some of the reasons are tax benefits for interest and generating money on borrowed money.  Also, interest rates are at historic lows, so taking advantage of the situation only makes sense.

Alphabet (Google) Liquidity Ratios

Ratios 2019 2018 2017 2016 2015
Current Ratio                           3.37                    3.92
Cash Ratio                           0.41                    0.48
Quick Ratio                           3.35                    3.89
Net Working Capital                         7,426                  8,057

Alphabet (Google) Asset Utilization

Ratios 2019 2018 2017 2016 2015
Total Asset Turnover                           0.59                    0.59
Fixed Asset Turnover                           2.20                    2.29
Days Sales Outstanding                         57.11                  55.59
Inventory Turnover                       162.02                123.59
Accounts Receivable Turnover                           6.39                    6.57
Working Capital Turnover                         21.80                  16.98
AP Turnover                         29.11                  31.25
Average Days Inventory                           0.44                    0.34
Average Days Payable                           0.08                    0.09

Alphabet (Google) Profitability Ratios

Ratios 2019 2018 2017 2016 2015
Return on Assets 12.45% 13.20%
Return on Equity 17.05% 17.30%
Net Profit Margin 21.22% 22.46%
Gross Profit Margin 55.58% 56.48%
Operating Profit Margin 21.15% 19.24%
Basic Earning Power 12.41% 11.31%
ROCE 14.84% 13.28%
Capital Employed                     230,688              198,172
ROIC 36.59% 34.19%

Alphabet (Google) Long-term Debt

Ratios 2019 2018 2017 2016 2015
Debt Ratio 1.65% 1.72%
Debt/Equity 2.26% 2.26%
Times Interest Earned                         58.51                    3.86