Notes: Need Answers in 24 hrs
1. I have attached the sample for both Alphabetic inc and Apple Inc
2. In ratios calculations of each please interpretation as well
3. Its all excel work so work on sample excel
4. Please follow the instructions I have attached.
|Complete your Title page on this tab.|
|Please include the names of your team members, the course, the date, your instructor's name, and the title for the project.|
|Complete one paragraph, profiling each company's business, including information such as brief histories, where each company is located, number of employees, the products each company sells, and so forth. Please reference any websites that you used for the profiles on the Bibliography tab.|
|NIKE, Inc. designs, develops, markets, and sells athletic apparel, footwear, equipment, and accessories. NIKE's headquarters are in Beaverton, Oregon. They were founded in 1964 as Blue Ribbon Sports, Inc. but, in 1971, they changed their name to NIKE, Inc. According to Yahoo! Finance, NIKE has 76,700 full-time employees. NIKE is known for their celebrity endorsements including basketball icon, Michael Jordan. NIKE had 2014 net product sales of $27.8 billion.|
|Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories. Under Armour was founded in 1996 and is headquartered in Baltimore, Maryland. According to Yahoo! Finance, Under Armour has 7,000 full-time employees. Under Armour was founded by Kevin Plank, a former University of Maryland college football player. Under Armour had net product sales of $3.1 billion for 2014.|
|Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab, and also include your commentary.|
|The 2014 financial statements used to calculate these ratios are available in the Investor Relations sections of the Nikeand Under Armour websites.|
|NIKE||Under Armour||Interpretation and comparison between the two companies' ratios (reading Chapter 13 will help you prepare the commentary)|
|5/31/14||12/31/14||The comparison of the ratios is an important part of the project. A good approach is to briefly explain what the ratio tells us. Indicate whether a higher or lower ratio is better. Then compare the two companies on this basis. Remember that each ratio below requires a comparison.|
|Earnings per Share of Common Stock (basic – common)||As given in the income statement||$ 3.05||$0.98|
|Current Ratio||Current assets||$13,696||=||2.72||$1,549,399||=||3.67|
|Gross Profit Rate||Gross profit||$12,446||=||44.8%||$1,512,206||=||49.0%|
|Profit Margin||Net income||$2,693||=||9.7%||$208,042||=||6.7%|
|Inventory Turnover||Cost of goods sold||$15,353||=||4.1||$1,572,164||3.1|
|Days in Inventory||365 days||365||=||88||365||=||117|
|Accounts Receivable Turnover||Net credit sales||$27,799||=||8.5||$3,084,370||=||12.6|
|Average net accounts receivable||$3,276||$244,894|
|Average Collection Period||365 days||365||=||43||365||=||29|
|Accounts receivable turnover||8.5||days||12.6||days|
|Asset turnover||Net sales||$27,799||=||1.54||$3,084,370||=||1.68|
|Average total assets||$18,070||$1,836,412|
|Return on Assets (ROA)||Net income||$2,693||=||14.9%||$208,042||=||11.3%|
|Average total assets||$18,070||$1,836,412|
|Debt to assets ratio||Total Liabilities||$7,770||=||41.8%||$744,783||=||35.5%|
|Times-Interest Earned Ratio||Net income + interest expense + income tax expense||$3,577||=||108.4||347,545||=||65.1|
|Dividend Yield||Dividend per share of common stock (Yahoo Finance 12/24/2015)||$1.28||=||2.0%||$0.00||=||0.0%|
|(Please follow the Course Project instructions to calculate the current dividend yield.)||Market price per share of common stock (Yahoo Finance 12/24/2015)||$63.18||$81.20|
|Return on Common Stockholders' Equity (ROE)||Net income – preferred dividends||2,693||=||24.6%||208,042||=||17.3%|
|Average common stockholders' equity||10,952.50||1,201,827.00|
|Free cash flow||Net cash provided by operating activities minus capital expenditures minus cash dividends||=||$1,324||=||$78,505|
|in millions||in thousands|
|Price-Earnings Ratio||Market price per share of common stock as of 5/30/2014 for Nike and 12/31/2014 for Under Armour||$76.91||=||25||$67.90||=||69|
|(Please see the Course Project instructions for the dates to use for this ratio.)||Earnings per share||$3.05||$0.98|
|You all get the chance to play the role of financial analyst below. The summary should be a comparison of each company's performance for each major category of ratios listed below. Focus on major differences as you compare each company's performance. A nice way to conclude is to state which company you feel is the better investment and why.|
|Liquidity: NIKE has the advantage for the current ratio. NIKE has $3.05 in current assets for every dollar in current liabilities while Under Armour has only 98 cents in current assets for every dollar in current liabilities. NIKE has the advantage for the inventory turnover ratio, but Under Armour has the advantage for the accounts receivable turnover ratio. NIKE turns over its inventory 4.1 times to Under Armour's 3.1 times. Under Armour has the advantage for the accounts receivable turnover ratio as Under Armour collects on its receivables 12.6 times to Nike's 8.5 times.|
|Solvency: Under Armour has less debt than NIKE as evidenced by Under Armour's 35.5% debt-to-assets ratio as compared to NIKE's 41.8% debt-to-assets ratio. NIKE can cover its interest expense 108.4 times with income before interest and taxes, while Under Armour can only cover its interest expense 65.1 times with their income before interest and taxes. NIKE has free cash flow of $1.3 billion while Under Armour has $78.5 million in free cash flow.|
|Profitability: Under Armour has the advantage for the gross profit rate at 49% while NIKE has a 44.8% gross profit rate percentage. NIKE has the advantage for the profit margin ratio at 9.7% versus 6.7% for Under Armour. Under Armour has the advantage for asset turnover as they turn their assets 1.68 times to Nike's 1.54 times. NIKE has the advantage for both return on assets (ROA) and return on common stockholder's equity (ROE). NIKE has an ROA of 14.9% to Under Armour's 11.3%. NIKE also has the advantage for return on common stockholders' equity with an ROE of 24.6% to Under Armour's 17.3%.|
|Conclusion: Under Armour has less debt than NIKE as measured by the debt to assets ratio, but NIKE has a stronger current ratio and times-interest earned ratio. Regarding profitability, NIKE has the advantage for return on assets (ROA) and return on common stockholders' equity (ROE). For both a conservative investor and growth investor, NIKE looks like the better choice.|
|Your textbook and any information that you use to profile the companies should be cited as a reference below.|
|Big Charts for Nike. (2014, May 30). Retrieved from http://bigcharts.marketwatch.com/historical/default.asp?symb=NKE&closeDate=5%2F30%2F14&x=0&y=0|
|Big Charts for Under Armour. (2014, December 31). Retrieved from http://bigcharts.marketwatch.com/historical/default.asp?symb=ua&closeDate=12%2F31%2F2014&x=37&y=26|
|Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2019). Financial Accounting: Tools for Business Decision Making (9th ed.). Hoboken, NJ: John Wiley & Sons, Inc.|
|Nike's 2014 Annual Report. (2014). Retrieved from https://s1.q4cdn.com/806093406/files/doc_financials/2014/index.html|
|NKE profile. (2019). Retrieved from https://finance.yahoo.com/quote/NKE/profile?p=NKE|
|NKE stock price. (December 24, 2015). Retrieved from https://finance.yahoo.com/quote/NKE/profile?p=NKE|
|Under Armour 2014 Annual Report. (2015). Retrieved from https://underarmourinc.gcs-web.com/static-files/13a42846-a519-469e-978b-b3199de9fbe8|
|UA profile. (2019). Retrieved from https://finance.yahoo.com/quote/UA/profile?p=UA&.tsrc=fin-srch|
|UA stock price. (December 24, 2015). Retrieved from https://finance.yahoo.com/quote/UA?ltr=1|
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 ___________________________________________
FORM 10-K ___________________________________________
(Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020 OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number: 001-37580 ___________________________________________
Alphabet Inc. (Exact name of registrant as specified in its charter)
Delaware 61-1767919 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1600 Amphitheatre Parkway Mountain View, CA 94043
(Address of principal executive offices, including zip code) (650) 253-0000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered
Class A Common Stock, $0.001 par value GOOGL Nasdaq Stock Market LLC (Nasdaq Global Select Market)
Class C Capital Stock, $0.001 par value GOOG Nasdaq Stock Market LLC (Nasdaq Global Select Market)
Securities registered pursuant to Section 12(g) of the Act: Title of each class
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2020, the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing sale prices of such shares on the Nasdaq Global Select Market on June 30, 2020) was approximately $849.7 billion. For purposes of calculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares are held by non-affiliates, except for shares held by each of our executive officers, directors and 5% or greater stockholders. In the case of 5% or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances which would indicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding common stock. These assumptions should not be deemed to constitute an admission that all executive officers, directors and 5% or greater stockholders are, in fact, affiliates of our company, or that there are not other persons who may be deemed to be affiliates of our company. Further information concerning shareholdings of our officers, directors and principal stockholders is included or incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.
As of January 26, 2021, there were 300,737,081 shares of the registrant’s Class A common stock outstanding, 45,843,112 shares of the registrant’s Class B common stock outstanding, and 327,556,472 shares of the registrant’s Class C capital stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement for the 2021 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2020.
Alphabet Inc. Form 10-K
For the Fiscal Year Ended December 31, 2020
TABLE OF CONTENTS
Note About Forward-Looking Statements 3
PART I Item 1. Business 5 Item 1A. Risk Factors 10 Item 1B. Unresolved Staff Comments 24 Item 2. Properties 25 Item 3. Legal Proceedings 25 Item 4. Mine Safety Disclosures 25
PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities 26
Item 6. Selected Financial Data 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47 Item 8. Financial Statements and Supplementary Data 50 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 92 Item 9A. Controls and Procedures 92 Item 9B. Other Information 92
PART III Item 10. Directors, Executive Officers and Corporate Governance 93 Item 11. Executive Compensation 93 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters 93
Item 13. Certain Relationships and Related Transactions, and Director Independence 93 Item 14. Principal Accountant Fees and Services 93
PART IV Item 15. Exhibits, Financial Statement Schedules 94 Item 16. Form 10-K Summary 97 Signatures
Table of Contents Alphabet Inc.
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding:
• the ongoing effect of the novel coronavirus pandemic ("COVID-19"), including its macroeconomic effects on our business, operations, and financial results; and the effect of governmental lockdowns, restrictions and new regulations on our operations and processes;
• the growth of our business and revenues and our expectations about the factors that influence our success and trends in our business, including the size and timing of the expected return on our continuing investments in our Google Cloud segment;
• the potential for declines in our revenue growth rate and operating margin;
• our expectation that the shift from an offline to online world will continue to benefit our business;
• our expectation that the portion of our revenues that we derive from non-advertising revenues will continue to increase and may affect our margins;
• our expectation that our traffic acquisition costs ("TAC") and the associated TAC rate will fluctuate, which could affect our overall margins;
• our expectation that our monetization trends will fluctuate, which could affect our revenues and margins;
• fluctuations in our revenue growth, as well as the change in paid clicks and cost-per-click and the change in impressions and cost-per-impression, and various factors contributing to such fluctuations;
• our expectation that we will continue to periodically review, refine, and update our methodologies for monitoring, gathering, and counting the number of paid clicks and impressions;
• our expectation that our results will be affected by our performance in international markets as users in developing economies increasingly come online;
• our expectation that our foreign exchange risk management program will not fully offset our net exposure to fluctuations in foreign currency exchange rates;
• the expected variability of gains and losses related to hedging activities under our foreign exchange risk management program;
• the amount and timing of revenue recognition from customer contracts with commitments for performance obligations, including our estimate of the remaining amount of commitments and when we expect to recognize revenue;
• fluctuations in our capital expenditures;
• our plans to continue to invest in new businesses, products, services and technologies, systems, land and buildings for data centers and offices, and infrastructure, as well as to continue to invest in acquisitions;
• our pace of hiring and our plans to provide competitive compensation programs;
• our expectation that our cost of revenues, research and development ("R&D") expenses, sales and marketing expenses, and general and administrative expenses may increase in amount and/or may increase as a percentage of revenues and may be affected by a number of factors;
• estimates of our future compensation expenses;
• our expectation that our other income (expense), net ("OI&E"), will fluctuate in the future, as it is largely driven by market dynamics;
• fluctuations in our effective tax rate;
• seasonal fluctuations in internet usage and advertiser expenditures, underlying business trends such as traditional retail seasonality (including developments and volatility arising from COVID-19), which are likely to cause fluctuations in our quarterly results;
• the sufficiency of our sources of funding;
• our potential exposure in connection with new and pending investigations, proceedings, and other contingencies;
Table of Contents Alphabet Inc.
• the sufficiency and timing of our proposed remedies in response to decisions from the European Commission ("EC") and other regulators and governmental entities;
• our expectations regarding the timing, design and implementation of our new global enterprise resource planning ("ERP") system;
• the expected timing and amount of Alphabet Inc.'s share repurchases;
• our long-term sustainability and diversity goals;
• our expectation that the estimated useful life of servers and certain network equipment will have a favorable effect on our 2021 operating results;
as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements may appear throughout this report and other documents we file with the Securities and Exchange Commission ("SEC"), including without limitation, the following sections: Item 1 "Business," Item 1A "Risk Factors," and Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "may," "could," "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form 10-K, and in particular, the risks discussed in Item 1A, "Risk Factors" of this report and those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
As used herein, "Alphabet," "the company," "we," "us," "our," and similar terms include Alphabet Inc. and its subsidiaries, unless the context indicates otherwise.
"Alphabet," "Google," and other trademarks of ours appearing in this report are our property. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.
Table of Contents Alphabet Inc.
ITEM 1. BUSINESS
As our founders Larry and Sergey wrote in the original founders' letter, "Google is not a conventional company. We do not intend to become one." That unconventional spirit has been a driving force throughout our history, inspiring us to tackle big problems, and invest in moonshots like artificial intelligence ("AI") research and quantum computing. We continue this work under the leadership of Sundar Pichai, who has served as CEO of Google since 2015 and as CEO of Alphabet since 2019.
Alphabet is a collection of businesses — the largest of which is Google — which we report as two segments: Google Services and Google Cloud. We report all non-Google businesses collectively as Other Bets. Our Other Bets include earlier stage technologies that are further afield from our core Google business. We take a long term view and manage the portfolio of Other Bets with the discipline and rigor needed to deliver long-term returns. Our Alphabet structure is about helping each of our businesses prosper through strong leaders and independence.
Access and technology for everyone
The Internet is one of the world’s most powerful equalizers, capable of propelling new ideas and people forward. Our mission to organize the world’s information and make it universally accessible and useful is as relevant today as it was when we were founded in 1998. Since then, we’ve evolved from a company that helps people find answers to a company that helps you get things done. We’re focused on building an even more helpful Google for everyone, and we aspire to give everyone the tools they need to increase their knowledge, health, happiness and success.
Across Alphabet, we're focused on continually innovating in areas where technology can have an impact on people’s lives. Every year, there are trillions of searches on Google, and we continue to invest deeply in AI and other technologies to ensure the most helpful Search experience possible. People come to YouTube for entertainment, information and opportunities to learn something new. And Google Assistant offers the best way to get things done seamlessly across different devices, providing intelligent help throughout your day, no matter where you are.
Since the pandemic began, our teams have built new features to help users go about their daily lives, and to support businesses working to serve their customers during an uncertain time. In conjunction with Apple, we launched Exposure Notification apps that are being used by local governments globally. Our COVID-19 Community Mobility Reports are used by public health agencies and researchers around the globe, and we’ve committed hundreds of millions of dollars to help small businesses through a combination of small business loans, grants and ad credits. Importantly, we've made authoritative content a key focus area across both Google Search and YouTube to help users search for trusted public health information.
Our Other Bets are also pursuing initiatives with similar goals. For instance, as a part of our efforts in the Metro Phoenix area, Waymo is working toward our goal of making transportation safer and easier for everyone while Verily is developing tools and platforms to improve health outcomes.
Many companies get comfortable doing what they have always done, making only incremental changes. This incrementalism leads to irrelevance over time, especially in technology, where change tends to be revolutionary, not evolutionary. People thought we were crazy when we acquired YouTube and Android and when we launched Chrome, but those efforts have matured into major platforms for digital video and mobile devices and a safer, popular browser. We continue to look toward the future and continue to invest for the long-term. As we said in the original founders' letter, we will not shy away from high-risk, high-reward projects that we believe in because they are the key to our long-term success.
The power of machine learning
Across the company, machine learning and AI are increasingly driving many of our latest innovations. Our investments in machine learning over the past decade have enabled us to build products that are smarter and more helpful. For example, a huge breakthrough in natural language understanding, called BERT, now improves results for almost every English language search query.
DeepMind made a significant AI-powered breakthrough, solving a 50-year-old protein folding challenge, which will help us better understand one of life’s fundamental building blocks, and will enable researchers to tackle new and difficult problems, from fighting diseases to environmental sustainability.
Table of Contents Alphabet Inc.
For reporting purposes, Google comprises two segments: Google Services and Google Cloud.
Serving our users
We have always been a company committed to building helpful products that can improve the lives of millions of people. Our product innovations have made our services widely used, and our brand one of the most recognized in the world. Google Services' core products and platforms include Android, Chrome, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube, each with broad and growing adoption by users around the world.
Our products and services have come a long way since the company was founded more than two decades ago. Rather than the ten blue links in our early search results, users can now get direct answers to thei