Question

a)does google make profit in 2018?

b)does google have high internal fund to develop their product?

c)talk about the strength of google in financial resources

Answer 1

The search engine known as Google.com operates under the parent company called Alphabet Inc. Alphabet Inc. is a holding company that also runs other businesses and projects such as Google Maps, Android, YouTube, and Chrome, among others.

a) In the financial year ending 31st December 2018, Alphabet Inc. (referred to as Google from now onward) managed to earn a revenue of USD 136.8 billion compared to USD 111.2 billion in the financial year ending 31st December 2017 - an increase of 23%.

In terms of total net income, Google did extremely well by posting $30.7 billion net income in 2018 which was an increase of a staggering 243% compared to the previous year of 2017. There were some exceptional items (income from sources not related to the main business of the company) that contributed to make this number so big but even if we deduct the exceptional items, Google still made a huge net income of more than $15 billion in 2017.

Another metric which is frequently used for calculating the profitability of a company is Earnings Per Share (EPS) which is simply the profit earned by the company for every share outstanding. In this metric too Google performed quite well with an EPS of $12.77 in the year ending 31 Dec. 2018.

b) Please look at the numbers and analysis provided in part C of the answer.

Based on that it is safe to say that Google has enough internal funds to develop its products and services.

In addition, we can also give examples of various new products and services that are already under development at Google such as self-driving venture called Waymo and health venture called Verily to show that Google has enough funds to expand and develop its products and services.

c) As of 31st of December 2018, Google has cash in hand of $16.7 billion dollars. Further to that, there are Marketable Securities, Accounts Receivable, and other such Current Assets in excess of $100 billion. These Current Assets can be quickly converted to cash in times of need. Over and above these, Google also has Property, Equipment, and other Long-term Assets to the tune of almost another $100 billion.

Against this, it had Liabilities of only $55 billion to outsiders (people other than the owners of the company). The rest of the assets are owned by Google (and in turn by the shareholders of Google).

In every possible analysis of Google and their financial performance, it would be safe to say that Google is a very profitable company that has been showing huge growth in both revenue and income for the past many years. Also, it has more than sufficient resources to continue to grow in the near future.