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Google Inc Capital Structure
Transcript of Google Inc Capital Structure
January 2, 2013:
American Taxpayer Relief Act of 2012
Reduced provisioning for income taxes
Observable gap between management and stockholders
Quick R (4.58)
Current R (4.58)
Bankruptcy indicator is below 0.1
Rating > "BB"
Bankruptcy risk is minimal (no serious risk)
BS --> Normal range (Intangible Assets)
High agency conflict
Financially stable and secure
Rapid growth and expansion
Wide service range
Good bankruptcy indicator
Life Cycle 2
Founded 1996 as university project
First growth: 1999 "Google Search Engine"
Second growth: 2007 "Android Mobile OS"
Now: Leading corporation
Return differential approach
Capital Structure Analysis
Added discipline observable
86.70% are held by external investors
CAPEX not predictable
Easy distribution of new services
Life Cycle 1
Optimal capital structure
Focus: ROA and ROE
Management is giving shareholders more for their money
Good market position
Sector approach 1
Sector approach 2
Leading firm in several sectors
Broad service range
Highest growth rate of sectors