2) Return on Assets: Return on Assets is the amount which a company obtains on the amount invested on the assets. The return of assets % for Google has been 14.93 for the year 2011, 12.91 for the year 2012 and 12.62 for 2013. It is the indicator of how profitable is the company with respect to the assets. Thus, Google is able to earn a good return on assets. Though, this can be improved.
3) Financial Leverage: The financial leverage of Google has been 1.25 for 2011, 1.31 for 2012 and 1.27 for 2013. The financial leverage of the company should be low and it should be such that it does not affect the company in a negative manner. Google’s financial leverage is very less and it has been decreasing every year.
5) The share prices of Google have been more or less similar for the last three years. While the average share price in the year 2011 was 654, it was 645 in 2012 and 677 for the year 2013. Thus, there have not been huge movements in the share prices and it has continued to be similar for the last three years. Talking about the year 2014, there has been a decrease in the share prices. The investors can clearly trust in the shares of Google as the company has been stable and has turned out to be a profitable entity for the large number of investors.
6) Price per earnings ratio may be defined as the valuation ratio for the present share price of the company compared to the per-share earnings. It is calculated by dividing Market value per share and earnings per share (Chi, S., & Shanthikumar, 2014). A number of factors affect the PE Ratio such as the effect due to the perceived growth opportunities, effect due to the return on investment, effect which is cost as a result of the riskier businesses, the effects because of the changes in the stating earnings for the company.
Price per earnings ratio for 2011: 43.92
Price per earnings ratio for 2012: 39.88
Price per earnings ratio for 2013: 35.48
Price per earnings ratio for 2014: 32.63
The price per earnings ratio suggests that the investor is expecting the earning from each share. The PPE for Google is higher which satisfies the customer.