The Business And Financial Performance Of Google And Yahoo Over A Three Year Period

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[The business and financial performance of Google and Yahoo over a three year period]



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I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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To explore the relationship between managers' cognitive maps and their performance as managers at the same level in the same organisation. Field study involving 30 branch managers in a financial services organisation operating in New Zealand. A nomthetic approach was used to develop their cognitive maps. Features of these maps were then related to business-unit performance. The managers who were higher performing have maps that were considerably simpler, using fewer concepts and fewer linkages. While limited to one organisation and to one level of management, there is evidence that cognition is related to managers' performance. Future research should explore how cognitive structures differ between managerial levels, and how these are related to appropriate measures of performance.

Originality/value - One of few studies that have sought to map managers' cognition and organisation performance.

Chapter 1: Introduction

Financial ratios are used by companies, investors, and by students. The purpose of financial ratios is to determine the whether a company is able to pay off debts, use its assets to regenerate cash, or determine how much profit a company is making from every dollar they make. A study of two internet giants, Google and Yahoo!, will show that although one company is not generating as much as the other is, there are ways that it can improve future cash flows.

Current Ratio

The current ratio of an organization shows its ability to meet its short-term financial obligations (Investor Words, 2009), by taking the current assets divided by current liabilities. At the end of 2008, Google's ratio was $8.77 million and $8.49 million at the end of 2007 (Google Finance, 2009). At the end of 2008, Yahoo's ratio was $1,705.02 million and $1.41 million in 2007 (MSN Money, 2009), showing a growth. When comparing the financial statements of Google and Yahoo!, neither of the two had current liabilities greater than current assets, so both companies do not face the risk of not being able to meet short-term financial needs. However, the current ratio of Yahoo! is significantly higher than Google, therefore Yahoo! is considered more liquid or possesses greater assets that can be easily converted into cash if need be.

Quick Ratio

The quick ratio, or acid-test ratio, is an alternative form of the current ratio. It also measures the short-term liquidity of an organization; however, it is a slight more accurate, because it accounts for inventories. To find the quick ratio, take current assets minus inventories and divide by current liabilities (Investopedia, 2009). The financial statements of both Google and Yahoo! ...
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