yahoo ratio analysis

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ASSIGNMENT OFFinancial statement AnalysisProject name: Analysis of Submitted by: Ratio Safeer Ahmad

UNIVERSITY OF WAH, WAH CANTT

Created by: SAFEER AHMAD

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The History of Yahoo! - How It All Started:Yahoo! began as a student hobby and evolved into a global brand that has changed the way people communicate with each other, find and access information and purchase things. The two founders of Yahoo!, David Filo and Jerry Yang, Ph.D. candidates in Electrical Engineering at Stanford University started their guide in a campus trailer in February 1994 as a way to keep track of their personal interests on the Internet. Before long they were spending more time on their home-brewed lists of favorite links than on their doctoral dissertations. Eventually, Jerry and David's lists became too long and unwieldy, and they broke them out into categories. When the categories became too full, they developed subcategories ... and the core concept behind Yahoo! was born. The Web site started out as "Jerry and David's Guide to the World Wide Web" but eventually received a new moniker with the help of a dictionary. The name Yahoo! is an acronym for "Yet AnotherHierarchical Officious Oracle," but Filo and Yang insist they selected the name because they liked the general definition of a yahoo: "rude, unsophisticated, uncouth." Yahoo! itself first resided on Yang's student workstation, "Akebono," while the software was lodged on Filo's computer, "Konishiki" - both named after legendary sumo wrestlers. Jerry and David soon found they were not alone in wanting a single place to find useful Web sites. Before long, hundreds of people were accessing their guide from well beyond the Stanford trailer. Word spread from friends to what quickly became a significant, loyal audience throughout the closely-knit Internet community. Yahoo! celebrated its first million-hit day in the fall of 1994, translating to almost 100 thousand unique visitors.

Due to the torrent of traffic and enthusiastic reception Yahoo! was receiving, the founders knew they had a potential business on their hands. In March 1995, the pair incorporated the business and met with dozens of Silicon Valley venture capitalists. Created by: SAFEER AHMAD

1 They eventually came across Sequoia Capital, the well-regarded firm whose most successful investments included Apple Computer, Atari, Oracle and Cisco Systems. They agreed to fund Yahoo! in April 1995 with an initial investment of nearly $2 million.

Realizing their new company had the potential to grow quickly, Jerry and David began to shop for a management team. They hired Tim Koogle, a veteran of Motorola and an alumnus of the Stanford engineering department, as chief executive officer and Jeffrey Mallett, founder of Novell's WordPerfect consumer division, as chief operating officer. They secured a second round of funding in Fall1995 from investors Reuters Ltd. and Softbank. Yahoo! launched a highly-successful IPO in April 1996 with a total of 49 employees. Today, Yahoo! Inc. is a leading global Internet communications, commerce and media company that offers a comprehensive branded network of services to more than 345 million individuals each month worldwide. As the first online navigational guide to the Web, www.yahoo.com is the leading guide in terms of traffic, advertising, household and business user reach. Yahoo! is the No. 1 Internet brand globally and reaches the largest audience worldwide. The company also provides online business and enterprise services designed to enhance the productivity and Web presence of Yahoo!'s clients. These services include Corporate Yahoo!, a popular customized enterprise portal solution; audio and video streaming; store hosting and management; and Web site tools and services. The company's global Web network includes 25 World properties. Headquartered in Sunnyvale, Calif., Yahoo! has offices in Europe, Asia, Latin America, Australia, Canada and the United States.


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AssetsYEARSCash and Equivalents Restrictable Cash Marketable Securities Receivables Inventories Prepaid Expenses

in Millions of Dollars10-Dec 1,526 1,358 1,029 433 4,346 2,551 -898 1,653 256 3,682 4,992 9-Dec 1,275 2,016 1,003 300 4,595 2,782 -1,355 1,427 356 3,640 4,918 8-Dec 2,292 1,160 1,060 233 4,745 2,305 -769 1,536 486 3,441 3,481 7-Dec 1,514 488 1,056 67 84 30 3,238 2,408 -1,077 1,332 611 4,002 300 2,747 6-Dec 1,570 1,032 931 218 3,750 1,955 -853 1,101 406 2,969 3,288

Current Deferred Income Taxes Other Current Assets Total Current Assets Gross Fixed Assets Accumulated Depreciation Net Fixed Assets Intangibles Cost in Excess Deferred Income Taxes Other Non-Current Assets

Total Non-Current Assets

10,583

10,341

8,944

8,992

7,763

Total Assets

14,928

14,936

13,690

12,230

11,514

LiabilitiesYEARS

in Millions of Dollars10-Dec 9-Dec 8-Dec 7-Dec 6-Dec


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Accounts Payable Short Term Debt Notes Payable Accrued Expenses Accrued Liabilities Deferred Revenues Current Deferred Income Taxes Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Income Tax Other Non-Current Liabilities Minority Interest Capital Lease Obligations Preferred Securities of Subsidiary Trust Preferred Equity Outside Shareholders' Equity -

162 1,209 255 1,626 507 56 38 143 -

137 1,170 411 1,718 494 123 25 83 -

152 -

176 750 853

109

1,047 318 1,474 750 19 102 8 -

1,140 413

368 13 140

1,705 420 218 18 77 -

2,300 261 123 12

Total Non-Current Liabilities Total Liabilities Preferred Shareholder's Equity Common Shareholder's Equity Total Equity Total Liabilities & Shareholder's Equity -

744 2,370 12,558 12,558 14,928

725 2,443 12,493 12,493 14,936

734 2,439 11,251 11,251 13,690

396 2,697 9,533 9,533 12,230

879 2,353

9,161 9,161 11,514

INCOME STATEMENTSDec-10 Operating Revenue Adjustments to Revenue 6,325 Dec-09 6,460 Dec-08 7,209 -

in Millions of Dollars Dec-07 6,969 Dec-06 6,426 -


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Cost of Revenue Gross Operating Profit Selling/General/Admin Expense Research & Development EBITDA (Operating Income Before Depreciation) Depreciation & Amortization Operating Income Interest Income Other Income, Net Total Income Before Interest Expense (EBIT) Interest Expense Income Before Tax Income Taxes Minority Interest Net Income from Continuing Operations Net Income from Discontinued Operations Net Income from Total Operations Normalized Income Extraordinary Income/Loss Special Income/Charges Income from Cum. Effect of Acct Change Total Net Income

-1,977 4,348 -1,753 -1,082 1,513 -683 830 23 671 1,466 1,466 -222 -13 1,232 1,232 1,290 -58 1,232

-2,172 4,288 -1,826 -1,210 1,252 -739 514 22 416 825 825 -219 -7 598 598 725 -127 598

-2,321 4,888 -2,268 -1,222 1,397 -790 607 86 594 693 -9 684 -259 -6 419 419 1,013 -594 419

-2,287 4,683 -2,244 -1,084 1,355 -659 695 130 8 1,000 1,000 -337 -3 660 660 658 2 660

-2,260 4,165 -1,851 -833 1,481 -540 941 143 -1 1,210 1,210 -458 -1 751 751 736 15 751

RATIO ANALYSISWORKING CAPITALCreated by: SAFEER AHMAD

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YEAR 2006 2007 2008 2009 2010

WORKING CAPITAL=(C.A - C.L) (in Millions of Dollars) 2276 938 3,040 2,877 2,720

CURRENT RATIO


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CURRENT RATIO = CURRENT ASSET / CURRENT LIABILITESYEAR 2006 2007 2008 2009 2010 CURRENT RATIO 2.544 1.4078 2.7829 2.6746 2.6728


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Liquid RatioLIQUID RATIO = CURRENT ASSET - INVENTORY - PREPAID EXPENSEYEAR 2006 2007 2008 2009 2010 LIQUID RATIO 3,532 3,171 4,512 4,295 3,913


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ABSOLUTE LIQUID RATIOABSOLUTE LIQUID RATIO = ABSOLUTE LIQUID ASSET / CURRENT LIABILITES YEAR ABSOLUTE LIQUID RATIO 2006 2007 2008 2009 2010 1.7652 0.8704 2.0246 1.9155 1.7736


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SALES TO WORKING CAPITALSALES TO WORKING CAPITAL = NET SALES/AVG. WCYEAR 2006 2007 2008 2009 2010 SALES TO WC RATIO 2.8233 7.4296 6.8009 2.2453 2.3253


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A/C REC. T/O RATIOA/C REC. T/O RATIO=NET.CR SALE/AVG GROSS REC.YEAR 2006 2007 2008 2009 2010 A/S REC. T/O RATO(TIMES) 6.9022 6.5594 6.8009 6.4406 6.1467


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A/C REC. T/O IN DAYSA/C REC. T/O IN DAYS=NO. OF WORKING DAYS IN YEAR/ACC.REC T/OYEAR 2006 2007 2008 2009 2010 A/C REC T/O IN DAYS 53 55 54 57 59


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OPERATING CYCLE

OPERATING CYCLE=INVENTORY T/O IN DAYS+ACC REC T/O IN DAYSYEAR 2006 2007 2008 2009 2010 OPERATING CYCLE 53 55 54 57 59


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DEBT RATIO

DEBT RATIO= T.LIABITILIES / T.ASSESTSYEAR 2006 2007 2008 2009 2010 DEBT RATIO 0.2043 0.2205 0.1781 0.1635 0.1587


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FIXED ASSESTS TO EQUITY


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FIXED ASSESTS TO EQUITY= FIXED ASSEST / S.H EQUITYYEAR 2006 2007 2008 2009 2010 FIXED ASSEST TO EQUITY 0.1201 0.1397 0.1365 0.1142 0.1677


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GROSS PROFIT MARGINGROSS PROFIT MARGIN=G.P / N.SALES * 100YEAR 2006 2007 2008 2009 2010 GROSS PROFIT MARGIN 64.8148 67.1975 67.8041 66.3777 68.743

Gross Profit Margin

NET PROFIT MARGINCreated by: SAFEER AHMAD

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NET PROFIT MARGIN=NPAIT / N.SALES * 100YEAR 2006 2007 2008 2009 2010

NET PROFIT MARGIN11.68 9.47 5.81 9.25 19.47


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OPERATING PROFIT MARGINOPERATING PROFIT MARGIN=O.P / N.SALES * 100 OPERATING PROFIT MARGIN YEAR2006 2007 2008 2009 2010 14.64 9.97 8.42 7.95 13.12


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TOTAL ASSETS TURNOVER

TOTAL ASSETS TURNOVER=NET SALES/ AVG.TOTAL ASSETS * 100YEAR 2006 2007 2008 2009 2010 TOTAL ASSETS TURNOVER 0.55 0.58 0.55 0.45 0.42


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DUPONT ROA

DUPONT ROA = NET PROFIT / T. ASSESTYEAR 2006 2007 2008 2009 2010 DUPONT ROA 0.0652 0.054 0.0306 0.04 0.0825

OPERATING ASSESTS T/O


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OPERATING ASSESTS T/O = NET SALES/AVG OP ASSESTS OPERATING ASSESTS T/O YEAR2006 2007 2008 2009 2010 0.82 0.83 0.8 0.67 0.6

RETURN ON T.EQUITY


1 RETURN ON T.EQUITY = NPAIT / AVG. T EQUITYYEAR 2006 2007 2008 2009 2010 RETURN ON T.EQUITY 0.082 0.07 0.04 0.05 0.098

RETURN ON INVESTMENTRETURN ON INVESTMENT = NPBIT/LONG TERM FUNDS


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YEAR 2006 2007 2008 2009 2010

RETURN ON INVESTMENT 1.6133 _ _ _ _

LONG TERM FUNDS = LONG TERM DEBTS+LONG TERM SHARE HOLDERS ONLY IN 2006 LONG TERM DEBT ARE AVAILABLE THERE IS NO DATA AVAILABLE OF LONG TERM DEBTS AND LONG TERM SHARE HOLDERS FOR OTHER YEARS SO NO CALCULATIONS WILL BE PERFORMED.

DUPONT RETURN ON OP ASSEST

DUPONT RETURN ON OP ASSEST=OP


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PROFIT/AVG OP ASSESTYEAR 2006 2007 2008 2009 2010 DUPONT RETURN ON OP ASSEST 0.121 0.083 0.067 0.053 0.079

RETURN ON COMMON EQUITY

RETURN ON COMMON EQUITY=NPAITPREFFERD DIVDEND/AVG COMMON


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STOCKYEAR 2006 2007 2008 2009 2010 RETURN ON COMMON EQUITY 0.082 0.07 0.04 0.05 0.098

PREFFERED DIVIDEND NOT AVAILABLE IN DATA.

TIMES INTEREST EARNED

TIMES INTEREST EARNED = NPAIT / INTERESTYEAR 2006 TIMES INTEREST EARNED -


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2007 2008 2009 2010

46.55 -


yahoo ratio analysis

Documents

founders of yahoo

corporate yahoo

history of yahoo

total assets

enthusiastic reception

davids guide

leading guide

jerry yang