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Basic earnings ratio was calculated for Google Inc and Microsoft. This ratio tells the percentage of earnings relative to total assets indicating how effectively and efficiently company uses its assets to generate revenue.

For Google Inc the ratio calculated came out to be 20.52 % in 2009, 17.9 % in 2010 and 16.17% in 2011. The data shows that the ability of Google Inc to generate operating income in 2009 was 20.52% which decrease by 12.76%. Similarly the company ability to generate operating income decreased in 2011 by 9.66%.

Microsoft Basic Earning Power ratio came out to be 26.1% in 2009. In 2010 it raises to 27.9%. In 2011 the ratio has declined to 24.9% . Thus the ability of Microsoft to generate operating income in 2009 was 26.1%. In 2010 it raised by 6.89%. In 2011 the ratio declined by 10.75%.

Return On Assets:

Return on Assets ratio tells how efficient the company is in using its asstes to generate income. It shows how profitable a company is relative to its total assets. ROA calculated for Google Inc came out to 16.10% in 2009, in 2010 the ratio has declined to 14.7% and in 2011 the ratio further decreases to 13.4%. Similarly the ratio calculated for Microsoft over the period of three years came out to be 18.7%, 21.7% and 21.2%. So Microsoft is comparatively doing well in utilizing its assets in generating revenue.

Return on Equity

Return on Shareholders’ Equity is another important measure of profitability. It measures how efficient the firm is in generating profit from share holder’s investments. A rising ROE means firm is efficient in generating profit and thus need little capital to earn profit. Return on Equity calculated for Google Inc is found to be 0.181 in 2009. In 2010 the ROE has raised slightly to 0.1839. However in 2011 the ratio has decline to 0.167. This shows that in 2009 Google Inc is making $0.181 for every $1 invested; in 2010 company is making 0.1839 for every $1 sales. In 2011 the company earning has decline to 0.167 for every $1 sales.

Microsoft ROE came out to be 0.368 in 2009, in 2010 ROE raised to 0.406. And in 2011 the ratio rises to 0.4055. Thus Microsoft is making $0.368 for every $1 invested by common stockholders. In 2010 the ratio shows company is making $0.406 for every $1 invested. Similarly the earning raised to $0.4055 in 2011.

Current Ratio:

Current ratio is used to test the proportion of current assets available to cover current liability. Main theme of this ratio is to check out whether a company has enough short term ass本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。