IMPROVING DECISION MAKING: USING SPREADSHEET SOFTWARE TO ANALYZE A DOT- COM BUSI
ID: 3825905 • Letter: I
Question
IMPROVING DECISION MAKING: USING SPREADSHEET SOFTWARE TO ANALYZE A DOT- COM BUSINESS
Software skills: Spreadsheet downloading, formatting, and formulas
Business skills: Financial statement analysis
Pick one e- commerce company on the Internet— for example, Ashford, Buy. com, Yahoo, or Priceline. Study the Web pages that describe the company and explain its purpose and structure. Use the Web to find articles that comment on the company. Then visit the Securities and Exchange Commission’s Web site at www. sec. gov to access the company’s 10- K ( annual report) form showing income statements and balance sheets. Select only the sections of the 10- K form containing the desired portions of financial statements that you need to examine, and download them into your spreadsheet. Instructions below provide more detailed instructions on how to download this 10- K data into a spreadsheet and information on financial statements. Create simplified spreadsheets of the company’s balance sheets and income statements for the past three years.
• Is the company a dot- com success, borderline business, or failure? What information provides the basis of your decision? Why? When answering these questions, pay special attention to the company’s three- year trends in revenues, costs of sales, gross margins, operating expenses, and net margins.
• Prepare a PowerPoint overhead presentation (with a minimum of five slides), including appropriate spreadsheets or charts, and upload your file to this assignment. An example PowerPoint slide presentation is attached for your review in this learning module folder in Blackboard.
As needed: Students can find material on understanding financial statements on financial Web sites such as Ameritrade (www.ameritrade.com) or the Small Business Knowledge Base http://www.bizmove.com/finance/m3b2.htm.
Downloading the Data into a Spreadsheet
Use the Convert Text to Columns Wizard in your spreadsheet software to arrange the 10-K data you downloaded into spreadsheet columns and rows. From the Excel menu, select Data and then select the Text to Columns option. The software brings up a Wizard to convert the imported text into spreadsheet columns. Although you can decide to create line breaks, it may be easiest to accept the default settings (Fixed Width, General format) and then adjust column widths after the Wizard has arranged the data in spreadsheet columns.
Financial Statements
Financial statements are used to evaluate the performance of a business and diagnose its strengths and weaknesses. The two primary financial statements are income statements and balance sheets. The income statement, also called an operating statement or profit and loss statement, shows the income and expenses of a firm over a period of time, such as a year, a quarter, or a month. Gross profit is calculated by subtracting the cost of goods sold from revenues, or sales. The gross margin is calculated by dividing gross profit by revenues (or sales). Net profit (or loss) is calculated by subtracting all other expenses, including operating expenses and income taxes from gross profit. Operating expenses are all business costs (such as expenditures for sales and marketing, general and administrative expenditures, and depreciation) other than those included in the cost of goods sold. Net margins are calculated by dividing net profit (or loss) by revenues (or sales).
A balance sheet provides a snapshot of a company’s financial assets and liabilities on a given date, usually the close of an accounting period. It lists what material and intangible assets the business owns and what money the business owes either to its creditors (liabilities) or to its owners (shareholders’ equity, also known as net worth). At any given time a business’s assets equals the sum of its liabilities plus its net worth. Current assets include cash, securities, accounts receivable, or other investments that are likely to be converted into cash within one year. Liabilities are outstanding obligations of the firm. Current liabilities are debts that are due within one year. Long-term debt consists of liabilities that are not due until after a year or more. If too much debt has been used to finance the firm’s operations, problems may arise in meeting future interest payments and repaying outstanding loans. By examining a series of balance sheets, one can identify and analyze trends in the financial strength of a business.
Explanation / Answer
Answer: Yahoo.com financial statement analysis
In recent years, yahoo.com, Inc. is no doubt a 'dot.com' success, they are ranked #513 in FORTUNE 500 companies, they are in a S&P 500 company. In 2015, yahoo.com had revenue of $1.6 billion dollars, with gross profit of $3.53 billion dollars. And their total net income was $4.36 billion dollars. Currently, yahoo.com, Inc. stock sells around $45.40 per share despite the current economic downturn.
All the information are based on the company’s financial statement that includes the income statement and balance sheets, other company information are from '' marketwatch.com '' and stock price from Yahoo! Finance. When determine the company’s success in the business world, one must look at the company’s financial statement, especially their income statements. When comparing yahoo, Inc.’s three year total revenues: 2014 - $4.6 billions; 2015 - $4.97 billion; 2016 - $5.18 billion. The positive growth shows exactly just how successful the yahoo.com is. After all the expenses are factored in, the operating income for the 3 years are 100.46 million, 300 million and 298 million respectively.
--> The another way to look the positve growth of a 'company' is to look at the company’s stock_price over the years. yahoo.com, 'Inc'. went on the stock market in 'May_1996' and it was only selling around '$1.38'. But soon it reached its peak selling around $118.75 in Jan-03-2000, soon after the dot.com bubble burst, the company stock began to slowly decline, but soon it started to recover around '2003' and '2004', and increasing steadily despite couple dips, and now Yahoo.com stock sells around $44.50. Again, another positive growth trend for the company.
Yahoo.com, Inc. is quite successful in the marketplace, and I believe it will continue to do so in the near future. To make Yahoo.com even more successful, I think they should further diversified their product lines, looking back to the early days of Yahoo.com, you can see just how narrow their product offerings were – only web-portal.
-->Because of these, yahoo suffered--they weren't doing so well back then as they do now today. Therefore, they should need to continu bringing web_mail services as of now and should create a social media connect sites as thier yahoomail is a good success. They should have more interaction with the people thoughts and interests so that they can better serve the people which automatically increase the user which leads to business expansion. Finally, continue on their research and development, continue promoting the benefits of yahoo finance and their yahoo_news, and make the device and service more reliable.
conclusion ::At this age of digital services and online importance, Yahoo.com is at the forefront of the email and Finance services Only by staying ahead of its 'competition'., Yahoo.com survive the harsh and brutal online services environment by givin the best and more services. // thank you //