Stock Research Selected Company: Google

Stock Research

Selected Company:

Google

Financial Report Read:

The Income Statement. In basic terms, an income statement is a financial report which is used to measure an entity's performance (financial) over a given period of time usually referred to as an accounting period or financial year. The income statement is also in some cases referred to as the profit and loss statement. It can be noted that the income statement is a special decision making aid most particularly to investors as it generally summarizes critical information regarding a firm's past performance (when compared with financial statements from previous years), use of funds and profitability. Hence when subjected to analysis, the income statement can help investors determine whether a given entity is a viable investment option.

In my opinion, when it comes to Google's income statement, investors can use information contained in the same to compute several ratios which could further shed some light on the financial situation and performance of Google. Two of the ratios which can be computed using information contained in Google's income statement are the gross profit margin and the return on equity (ROE). Google's gross profit margin can be computed by deducting the firm's C.O.G.S from its sales figure and then dividing the resulting figure with what is given for sales. By using this ratio, investors would be able to tell the amount of gross profit Google earned on sales.

Google's return on equity (ROE) on the other hand could be computed by dividing the firms net income figure with what is given as its shareholder equity figure. This ratio would be vital to investors as it would help them measure how much profit Google is earning for each invested dollar. With this information, they can decide on whether or not to buy Google's stock.

Question 2

Part 1

The name of the business I choose to concern myself with in this case is Wal-Mart Stores. Its stock symbol is captured as WMT. Today, on the 19th of October 2011, Wal-Mart Stores shares are trading at $56.25 per share (as at 4:01pm ET). Wal-Mart Stores' shares trade at the Dow Jones Composite Dow Industrials (Yahoo Finance n.p).

Part 2

In regard to today's price, it can be noted that the same is an increase from yesterday's closing price $55.89 per share (18th of October 2011). Essentially, this is an increase of 0.64%.

Part 3

When it comes to the industry, Wal-Mart Stores can be said to be in the discount, variety stores industry. More specifically, Wal-Mart operates in the services business or sector.

Part 4

Bentonville, Arkansas is where Wal-Mart Stores are currently headquartered.

Part 5

As a company that operates a chain of retail stores, Wal-Mart Stores stocks a wide range of commodities ranging from home furnishings, jewellery, books and stationery items, mobile/cellular devices, toys, beauty products, health products and items, floral products, beverages (both non-alcoholic and alcoholic), cereals, frozen dishes/foods, etc. It can also be noted that through its various segments, the company also offers some financial products and services including but not limited to wire transfers and money orders.

Part 6

From its Website, Wal-Mart Stores' mission statement is captured as;

"Saving people money so that they can live better." (Wal-Mart n.p)

In my opinion, this mission statement augurs well with the average shopper as the primary goal of most shoppers is to save money. The reasoning behind the mission statement seems to be that shopping at Wal-Mart Stores saves money for shoppers, a feat which in turn gives them more disposable income which they can use to improve the quality of their lives.

Part 7

Wal-Mart's main competitors include Target Corp. And Costco Wholesale Corporation and Carrefour SA (Yahoo Finance n.p). Based on a number of factors i.e. capitalization, revenues, and number of employees; Wal-Mart Stores comes across as being the market leader in the discount, variety stores industry.

Part 8

In regard to the organizational structure, Wal-Mart Stores can be said to be organized by divisions. In this regard, we have Wal-Mart supercentres, Sam's Clubs etc. Currently, the company's president is Mr. Mike Duke. Other key management positions in the firm include the position of chief financial officer, vice chairman, chief executive officer-international operations, and chief executive officer- Wal-Mart U.S.. These key positions are currently held by Mr. Charles M. Holley Jr., Mr. Eduardo Castro-Wright, Mr. Doug McMillon and Mr. William S. Simon respectively.

Part 9

Headline 1

"Stagnant Wages, High Unemployment Slam Wal-Mart U.S. Sales: Domestic Sales at World's Largest Retailer Post Two-Year Slump." (5/17/2011). (MSN n.p.)

Impact and Reason

In my own opinion, the news item above will bring about a decrease in the price of Wal-Mart's Store Stock. My reasoning in this case is that based on a decline in sales, investors will not be so keen on buying the stock hence effectively decreasing its demand. Decease in demand will depress the share price of the stock.

Headline 2

"Wal-Mart has First U.S. sales Rise in Two Years." (Oct 12th 2011). (Rappeport, n.p.)

Impact and Reason

In my own opinion, the news item above will bring about an increase in the price of the Wal-Mart's stock. In this case, investors will demand more of the stock as there is more to be gained going forward inform of dividends or otherwise should the company continue its profitability streak.

Headline 3

"Wal-Mart's Quiet Tax Haven." (Sept 23rd 2011). (LaRocco)

Impact and Reason

In my view, this news item is bound to bring about an increase in the price of Wal-Mart's stock. This is as investors come to the retaliation that Wal-Mart is making more savings (and hence more profits) from tax avoidance than its competitors.