Alphabet Inc. Financial Statement and Financial Ratios Analysis

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

Hey All,

Thanks for visiting my Alphabet Financial Report page. This page will provide preliminary information about Alphabet's (Google) current financial performance and some historical track records and trends. 

For a more detailed examination of Alphabet’s financial performance, I offer two reports: "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 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, buy my Alphabet Financial Report.” The financial report includes all aspects of my “Beginner’s Guide” plus much 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.
  • Overall financial analysis summary for the company.

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

Sincerely,

Paul, MBA.

PDF/Downloadable Versions

Beginner's Guide to Alphabet 2021 Financial Analysis

Click Below for the CURRENT

Downloadable PDF Price!!

Alphabet 2021 Financial Report by Paul Borosky, MBA

Click Below for the CURRENT

Downloadable PDF Price!!

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 174,000.  Sundar Pichai leads the firm.  Other members of their executive team would include Lawrence Page, Ruth Porat, and Sergey Brin (8/22).

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 other countries.  Popular services the firm provides 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) 2021 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 crucial.  I discuss each of Alphabet’s essential income statement line items, such as revenues, gross profits, etc., in detail.  After each line item is defined and discussed, I must analyze Alphabet’s income statement line items.

Revenue Growth:

Alphabet’s revenues were $110.8 billion in 2017.  In the next four years, Alphabet’s revenues would climb to $257.6 billion in 2021.  On average, this is an annual growth rate of approximately 23.9%.  For multinational organizations such as this, this is extraordinarily impressive.

Analyst Grade: A

Alphabet (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 vital line item from the balance sheet.  In reviewing each line item, I will define Alphabet’s balance sheet line items, such as cash, property, plant and equipment, and liabilities.  Next, I offer an analysis of Alphabet’s balance sheet line item.

Cash:

Alphabet’s cash position was $10.7 billion in 2017.  As compared to sales, this would be 9.7%.  In the next four years, Alphabet’s cash increased to $20.9 billion in 2021.  As compared to sales, this would be 8.1%.  This trend indicates that the organization is increasing its cash position.  However, they are not increasing it as fast as sales are growing.  This shows that the company can meet its short-term liabilities by utilizing less cash as a percentage of sales—an excellent strategy and structure.

Analyst Grade: A

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 Alphabet.  In reviewing each of Alphabet’s financial ratios, I first define 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 was 5.14 in 2017.  In the next several years, the company took steps to reduce its current ratio, ending in 2021 at 2.9.  Since the current ratio's gold standard is 1.0, Alphabet seems to be mismanaging its current assets.  A better strategy would be for the organization to divest significant portions of its cash into operations, expansion, and or dividend payouts.  From an investor’s perspective, this is a poor trend.

Analyst Grade: C

Alphabet (Google) Return on Assets (ROA)

Alphabet’s return on assets (ROA) was 6.4% in 2017.  In the next three years, ending 2020, the company would almost double its return on assets, ending the year at 12.6%.  Further, in 2021, the company’s return on assets would jump significantly, ending at 21.1%.  This trend shows that the company is continually generating additional revenues using the assets of its management.

Analyst Grade: A

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