The main focus of your analysis should have been the similarities and differences between the financial statements obtained from the company’s website and the financial statements obtained from the Securities Exchange Commission’s EDGAR database. This analysis would provide valuable insights about the actual financial performance of the company, thereby putting you in a better position to judge whether it is a viable business opportunity. Instead you focused on other information in the financial reports that might not be pertinent to your investment decision. Additionally, you did not make any effort whatsoever to compare the two sets of financial statements and only laid emphasis on the company’s form 10K annual report.
Apart from comparing the two sets of financial reports, your analysis should have also entailed both quantitative and qualitative factors. Quantitatively, you could have analyzed the profitability, liquidity, efficiency and financial leverage of the company (Hicks & Hicks, 2014)You should have particularly investigated whether these factors are consistent across the two sets of financial statements. On the other hand, from a qualitative perspective, you could have analyzed the company’s intangible assets and liabilities and their impact on the future performance of the company. Nonetheless, you were right in pointing out that the 10K report was more transparent, which not only enables investors to evaluate the current but also the future financial performance of the company. This is not only ethical but also consistent with the bible. According to Ecclesiastes 11:9, “God says that individuals will have to account for all of their works, including our secret sins. Even the words we have spoken will be judged.” Overall, though insightful, your analysis was biased and limited and as such, it cannot be used to make a sound investment decision.
Ecclesiastes 11:9 (King James Version)
Hicks, M., & Hicks, S. (2014). Accounting for the Rest of Us. Richland, WA : Synergistics, Inc.
U.S. Securities and Exchange Commission EDGAR. (2015). Retrieved from Google 10K: https://www.sec.gov/Archives/edgar/data/1288776/000128877615000008/goog2014123110-k.htm
One of the very first things about Googles Annual report on the Securities Exchange Commission’s EDGAR database that I found interesting and different from some of the reports shown to us in the book is all of the text about the company before the actual report/numbers themselves. The text at the start of the report was a very interesting read and I learned a lot more about Google as a company and not just what their revenues are. “Our founders started Google because they share a profound sense of optimism about the potential for technology to create a positive impact in the world” (U.S. Securities and Exchange Commission EDGAR, 2015). I would have not known this about Google had I not read through his report. Google has become such a widely popular and used site that it would be hard to find someone who doesn’t know what it is, however, many I’m sure do not know that history of Google or anything about the company. “It goes without saying that “Google” has become a ubiquitous term in the technological age, referring not only to the company that bears the name, but also to searching the intemet in general” (Carroll, 2012, p. 93). This is something that many people in today’s society will say “Google It” whenever they are asking a question and the person they ask doesn’t know the answer.
Part II of the 10K report starts to show the actual financial reports of Google. It starts with the breakdown on each quarter. Google is a multi-million dollar enterprise and by the end of 2014 its shares were selling for roughly $530 a share. Based on the current trend of the Google stock, it will continue to increase. However, there are many factors that could lead one to believe that it may not increase, such as legal action being taken against Google. There are multiple open and ongoing cases against google and some are listed in the 10K report. A few of these cases are Anti-Trust cases against Google and their business practices. In the 10K report, Google reports that they are responded to all subpoenas and acquisitions against them. There are numerous closed cases as well where Google was able to show that they did not violate any laws, antitrust or otherwise. Another legal issue was multiple investigations from the United States as well as in Europe on exactly how Google does their searches. “In a proposed settlement, Google agreed to label its own vertical search results more prominently, and to add a few, not particularly conspicuous, links to rival vertical search engines. Both regulators left untouched the core practice responsible for so much criticism: top-ranked placement for Google’s own news, flight information, and local results” (Grimmelmann, 2013, p. 28)
Even throughout the legal issues I would personally invest in Google if I had the money to do so. I have personally watched Google grow over the years since its creation and I see it as only continuing to grow even more. I think anyone would be wise to invest in such a rapidly growing company, especially one that has ties to Social media and the internet as a whole because those items won’t be going anywhere in the near future but up in price.
Carroll, A. (2012). Don’t be evil… unless it increases revenue: What the operation of credit rating agencies can teach us about google. Temple Journal of Science, Technology & Enviromental Law, 31 (1), p. 93-118. DL Analysis
Grimmelmann, J. (2013). What to do about google? Communications of the ACM, 56 (9), p. 28-30. DL Analysis
U.S. Securities and Exchange Commission EDGAR. (2015). Google 10K. Retrieved from https://www.sec.gov/Archives/edgar/data/1288776/000128877615000008/goog2014123110-k.htm
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