Google Case Study (Without Solutions)

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    Corporate Bridge Group

    This spreadsheet is designed to be used only in an academic context to illustrate concepts covered in

    Corporate Bridge training courses. THIS SPREADSHEET IS NOT TO BE USED FOR ANY RESE

    TRADING PURPOSES. No responsibility is accepted by the Corporate Bridge Group.Corporate Bridge does not accept any obligation to correct or update this spreadsheet or to inform

    any user of the spreadsheet if the spreadsheet is inaccurate.

    For further information and queries, please contact

    info@educorporatebridge.com

    www.educorporatebridge.com

    mailto:info@educorporatebridge.comhttp://www.educorporatebridge.com/http://www.educorporatebridge.com/mailto:info@educorporatebridge.com
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    RCH OR

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    Total Liabilities 1,434 2,646

    Stockholders equity:

    Convertible preferred stock, $0.001 par value per share - -

    ClassA and Class B common stock, $0.001 par value per share 0 0

    Additional paid-in capital 11,883 13,241

    Accumulated other comprehensive income 23 113Retained earnings 5,133 9,335

    Total stockholders equity 17,040 22,690

    Total liabilities and stockholders equity 18,473 25,336

    Solvency Ratios

    Current ratio 10.0 8.5

    Quick ratio 9.6 8.0

    Cash ratio 8.6 7.0

    Turnover Ratios

    Receivables turnover 8.0 7.7

    Payables turnover 20.0 23.6

    Average receivables collection period 45.5 47.6

    Average payment period 18.2 15.5

    Cash Conversion Cycle 27 32

    Marketable Securities as % of Sales 72.6% 49.0%

    Prepaid revenue share, expenses and other assets as % of Sales 4.2% 0

    Prepaid revenue share, expenses and other assets, non-current as 4.2% 0

    Accrued compensation and benefits as % of COGS 8.3% 8.8%

    Accrued expenses and other current liabilities as % of COGS 6.3% 7.0%

    Accrued revenue share as % of COGS 8.8% 7.9%

    Deferred revenue as % of Sales 1.0% 1.1%

    Stock based compensation

    Stock based compensation as % of Total Expense

    Assumptions

    Fixed Assets

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    r share amounts)

    2008 2009 2010 2011 2012 2013 2014

    8,657

    7,189

    15,846 - - - - - -

    2,642

    -

    286

    -

    1,404

    20,178 - - - - - -

    434

    -

    85

    5,234

    997

    4,840

    31,768 - - - - - -

    178

    -

    812

    480

    533

    -

    218

    82

    2,302 - - - - - -

    30

    890

    13

    294

    Historical

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    3,529 - - - - - -

    -

    0

    14,450

    22713,562

    28,239 - - - - - -

    31,768 - - - - - -

    8.8 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    8.0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    6.9 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    8.2 #DIV/0! #DIV/0!

    48.4 #DIV/0! #DIV/0!

    44.2 #DIV/0! #DIV/0!

    7.5 #DIV/0! #DIV/0!

    37 #DIV/0! #DIV/0! - - - -

    33.0% 0.0% 0.0%

    0 0.0% 0.0%

    0 0.0% 0.0%

    9.4% #DIV/0! #DIV/0!

    5.6% #DIV/0! #DIV/0!

    6.2% #DIV/0! #DIV/0!

    1.0% 0.0% 0.0%

    - - - -

    7.4% #DIV/0! #DIV/0!

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    - - - - -

    10.8% 3.4% 13.7%

    5.6% 5.2% 3.6%

    15.2% 0.5% 3.6%

    1.3% 1.2% 1.1%

    0.7 #DIV/0! #DIV/0!

    4.2 #DIV/0! #DIV/0!

    0.8 #DIV/0! #DIV/0!

    60.4% 100.0% 100.0%

    30.4% 100.0% 100.0%

    19.4% 0.0% 0.0%

    15.0% #DIV/0! #DIV/0!

    19.4% 0% 0%

    68.6% #DIV/0! #DIV/0!

    112.5% #DIV/0! #DIV/0!

    15.0% #DIV/0! #DIV/0!

    0 #DIV/0! #DIV/0!

    0 #DIV/0! #DIV/0!

    21 #DIV/0! #DIV/0!

    27.8% #DIV/0! #DIV/0!

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    2015

    -

    -

    -

    -

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    -

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    Corporate Bridge Academy (www.educorporatebridge.com)

    Google Inc.CONSOLIDATED STATEMENT OF INCOME

    (In millions, except per share amounts)

    2006 2007 2008

    Revenues 10,605 16,594 21,796

    Costs and expenses:

    Cost of revenues (including stock-based 4,225 6,649 8,622

    Research and development (including stock- 1,229 2,120 2,793

    Sales and marketing (including stock-based 850 1,461 1,946

    General and administrative (including stock-based 752 1,279 1,803

    Total costs and expenses 7,055 11,510 15,164

    Income from operations 3,550 5,084 6,632

    Impairment of equity investments - - (1,095)

    Interest and other income, net 461 590 316

    Income before income taxes 4,011 5,674 5,853

    Provision for income taxes 934 1,470 1,626

    Net income 3,077 4,204 4,227

    Net income per share of ClassA and Class B common

    Basic 10.21 13.53 13.46

    Diluted 9.94 13.29 13.31

    Cash paid for interest 0.3 1.3 1.6

    Cash paid for taxes 538 883 1224

    -396 -588 -402

    Vertical Analysis 2006 2007 2008

    Revenues 100% 100% 100%

    Costs and expenses:

    Cost of revenues (including stock-based 40% 40% 40%

    Research and development (including stock- 12% 13% 13%

    Sales and marketing (including stock-based 8% 9% 9%

    General and administrative (including stock-based 7% 8% 8%

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    Total costs and expenses 67% 69% 70%

    Income from operations 33% 31% 30%

    Impairment of equity investments 0% 0% -5%

    Interest and other income, net 4% 4% 1%

    Income before income taxes 38% 34% 27%

    Provision for income taxes 23% 26% 28%

    Net income 29% 25% 19%

    Horizontal Analysis

    Revenues 56% 31%

    Costs and expenses:

    Cost of revenues (including stock-based 57% 30%

    Research and development (including stock- 73% 32%

    Sales and marketing (including stock-based 72% 33%

    General and administrative (including stock-based 70% 41%

    Total costs and expenses 63% 32%

    Income from operations 43% 30%

    Impairment of equity investments

    Interest and other income, net

    Income before income taxes 41% 3%

    Provision for income taxes 57% 11%

    Net income 37% 1%

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    2009 2010 2011 2012 2013 2014 2015

    23,651 29,321 - - - - -

    2009 2010

    100% 100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    0% 0% 36% 36% 36% 36% 36%

    0% 0% 13% 13% 13% 13% 13%

    0% 0% 10% 10% 10% 10% 10%

    0% 0% 8% 8% 8% 8% 8%

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    0% 0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    0% 0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    0% 0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    0% 0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    0% 0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    #DIV/0! #DIV/0! 21% 21% 21% 21% 21%

    0% 0% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    9% 24% -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    -100% #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

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    Corporate Bridge Academy (www.educorporatebridge.com)

    Google Inc.CONSOLIDATED STATEMENTS OF CASH FLOWS

    (In millions)

    Net income

    Adjustments:

    Depreciation and amortization of property and equipment

    Amortization of intangible and other assets

    Stock-based compensation expense

    Excess tax benefits from stock-based award activities

    Deferred income taxesImpairment of equity investments

    Other

    Changes in assets and liabilities, net of effects of acquisitions and divestiture:

    Accounts receivable

    Income taxes, net

    Prepaid revenue share, expenses and other assets

    Accounts payable

    Accrued expenses and other liabilities

    Accrued revenue share

    Deferred revenue

    Net cash provided by operating activities

    Investing activities

    Purchases of property and equipment

    Purchases of marketable securities

    Maturities and sales of marketable securities

    Investments in non-marketable equity securities

    Cash collateral received from securities lending

    Investments in reverse repurchase agreements

    Acquisitions, net of cash acquired and proceeds received from divestiture, and purchases of intangi

    Net cash used in investing activities

    Financing activities

    Net proceeds (payments) from stock-based award activities

    Excess tax benefits from stock-based award activities

    Repurchase of common stock in connection with acquisitions

    Proceeds from issuance of short-term debt

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