Question: Refer to the statements for Google in
Refer to the statements for Google in Appendix A. For the year ended December 31, 2013, what is its debt-to-equity ratio? What does this ratio tell us?
Google’s Financial Statements from Appendix A:
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Google Inc. CONSOLIDATED BALANCE SHEETS (In millions, except share and par value amounts which are reflected in thousands, and par value per share amounts) As of December 31 2012 2013 Assets Current assets: Cash and cash equivalents 14,778 18,898 Marketable securities 33,310 39,819 Total cash, cash equivalents, and marketable securities (including securities loaned of $3,160 and $5,059) 48,088 58,717 Accounts receivable, net of allowance of $581 and $631 7,885 8,882 Inventories 505 426 Receivable under reverse repurchase agreements 700 100 Deferred income taxes, net 1,144 1,526 Income taxes receivable, net 408 Prepaid revenue share, expenses and other assets 2,132 2,827 Total current assets 60,454 72,886 Prepaid revenue share, expenses and other assets, non-current 2,011 1,976 Non-marketable equity investments 1,469 1,976 Property and equipment, net 11.854 16,524 Intangible assets, net 7,473 6,066 Goodwill 10,537 11,492 Total assets 93.798 110.920 Liabilities and Stockholders' equity Current liabilities: Accounts payable 2$ 2,012 24 2,453 Short-term debt 2,549 3,009 Accrued compensation and benefits 2.239 2,502 Accrued expenses and other current liabilities 3,258 3,755 Accrued revenue share 1,471 1,729 Securities lending payable 1,673 1,374 Deferred revenue 895 1,062 Income taxes payable, net 240 24 Total current liabilities 14,337 15,908 Long-term debt 2,988 2,236 Deferred revenue, non-current 100 139 Income taxes payable, non-current 2,046 2,638 Deferred income taxes, net, non-current 1,872 1,947 Other long-term liabilities 740 743 Commitments and contingencies Stockholders' equity: Convertible preferred stock, $0.001 par value per share, 100,000 shares authorized; no shares issued and outstanding Class A and Class B common stock and additional paid-in capital, $0.001 par value per share: 12,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000); 329,979 (Class A 267,448, Class B 62,531) and par value of $330 (Class A $267, Class B $63) and 335,832 (Class A 279,325, Class B 56,507) and par value of $336 (Class A $279, Class B $57) shares issued and outstanding Class C capital stock, $0.001 par value per share: 3,000,000 shares authorized; no shares issued and outstanding 22,835 25,922 Accumulated other comprehensive income 538 125 Retained eamings 48,342 61,262 Total stockholders' equity 71,715 87,309 1 10,920 Total liabilities and stockholders' equity 93,798 Google Inc. CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Year Ended December 31 2011 2012 2013 Revenues: Google (advertising and other) $37,905 $46,039 $55,519 Motorola Mobile (hardware and other) 4,136 4,306 Total revenues $37,905 $50,175 $59,825 Costs and expenses: Cost of revenues-Google (advertising and other) ( 13,188 17,176 21,993 Cost of revenues–Motorola Mobile (hardware and othery) 3,458 3,865 Research and dewelopment) Sales and marketing General and administrative 5,162 6,793 7,952 4,589 6,143 7,253 2,724 3,845 4,796 Charge related to the resolution of Department of Justice imvestigation 500 37415 Total costs and expenses Income from operations 26,163 45,859 11,742 12,760 13,966 Interest and other income, net 584 626 530 14,496 2,282 Income from continuing operations before income taxes 12,326 13,386 Provision for income taxes 2,589 2,598 Net income from continuing operations $ 9,737 $10,788 $12,214 Net income (loss) from discontinuad operations (51) 706 Net income $ 9,737 $10,737 $12,920 Net income (loss) per share of Class A and Class B common stock-basic: Continuing operations $ 30.17 $ 36.70 $ 32.97 Discontinued operations 0.00 (0.16) 2.12 Net income (loss) per share of Class A and Class B common stock-basic $ 30.17 $ 32.81 $ 38.82 Net income (loss) per share of Class A and Class B common stock-diluted: Continuing operations $ 29.76 $ 32.46 $ 36.05 Discontinued operations 0.00 (0.15) 2.08 Net income (loss) per share of Clas A and Class B common stock-diluted $ 29.76 $ 32.31 $ 38.13 "Includes stock-based compensation expense as follows: Cost of revenues-Google (advertising and other) $ 249 $ 359 2$ 469 Cost of revenues-Motorola Mobile (hardware and other) 14 18 Research and development Sales and marketing 1,061 1,325 1,717 361 498 578 General and administrative 303 453 486 $ 1.974 $ 2,649 $ 3,268 Google Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions, except for share amounts which are reflected in thousands) Class A and Class B Accumulated Other Comprehensive Income Common Stock and Total Additional Paid-In Capital Retained Stockholders' Earnings $ 27,868 Shares Amount equity Balance at January 1, 2011 321,301 $ 18,235 138 2$ 46,241 Common stock issued 3,594 621 621 Stock-based compensation expense 1,974 1,974 Stock-based compensation tax benefits 60 60 Tax withholding related to vesting of restricted stock units (626) (626) Net income 9,737 9,737 Other comprehensive income 138 138 Balance at December 31, 2011 324,895 20,264 276 37,605 58,145 Common stock issued 5,084 736 736 Stock-based compemation expense Stock-based compensation tax benefits 2,692 2,692 166 166 Tax withholding related to vesting of restricted stock units (1,023) (1,023) Net income 10,737 10,737 Other comprebensive income 262 262 Balance at December 31, 2012 329,979 22,835 538 48,342 71,715 Common stock issued 5,853 1,174 1,174 Stock-based compesation expense 3,343 3,343 Stock-based compensation tax benefits Tax withholding related to vesting of restricted stock units 449 449 (1,879) (1,879) Net income 12,920 12,920 Other comprehensive income Balance at December 31, 2013 (413) 125 (413) 335,832 $ 25,922 $ 61,262 87,309 Google Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31 2011 2012 2013 Net income $9,737 $10,737 $12,920 Other comprehensive income (loss): Change in foreign currency translation adjustment (107) 75 89 Available-for-sale investments: Change in net unrealized gains 348 493 (392) Less: reclassification adjustment for net gains included in net income Net change (net of tax effect of $54, $68, $212) Cash flow hedges: (115) (216) (162) 233 277 (554) Change in unrealized gains 39 47 112 (60) Less: reclassification adjustment for gains included in net income Net change (net of tax effect of $2, $53, $30) (27) (137) 12 (90) 52 Other comprehensive income (loss) 138 262 (413) Comprebensive income $9,875 $10,999 $12,507 Google Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31 2011 2012 2013 Operating activities Net income $ 9,737 $ 10,737 $ 12,920 Adjustments: Depreciation and amortization of property and equipment 1,396 1,988 2,781 amortization of intangible and other assets 455 974 1,158 Stock-based compensation expense 1,974 2,692 3343 Excess tax benefits from stock-based award activities (86) (188) (481) Deferred income taxes 343 (266) (437) Impairment of equity investments 110 Gain on divestiture of businesses (188) (700) Other 6 (28) 106 Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable (1,156) (787) (1,307) Income taxes, net 731 1,492 401 Inventories (30) 301 (234) Prepaid revenue share, expenses and other assets (232) (833) (696) Accounts payable 101 (499) 605 Accrued expenses and other liabilities 795 762 713 Accrued revenue share 259 299 254 Deferred revenue 162 163 233 18,659 Net cash provided by operating activities 14,565 16,619 Investing activities Purchases of property and equipment (3,438) (3,273) (7,358) Purchases of marketable securities (61,672) (33,4 10) (45,444) Maturities and sales of marketable securities 48,746 35,180 38,314 (428) Investments in non-marketable equity investments Cash collateral related to securities lending (696) (569) (354) (334) (299) Investments in reerse repurchase agreements 45 600 Proceeds from divestiture of businesses 2,525 Acquisitions, net of cash acquired, and purchases of intangibles and other assets (1,900) (10,568) (1,448) Net cash used in investing activities (19,04 1) (13,056) (13,679) Financing activities Net payments related to stock-based award activities (5) (287) (781) Excess tax benefits from stock-based award activities 86 188 481 Proceeds from issuance of debt, net of costs 10.905 16,109 10,768 Repayments of debt (10,179) (14,781) (11,325) Net cash provided by (used in) financing activities 807 1,229 (857) Effect of exchange rate changes on cash and cash equivalents 22 (3) Net increase (decrease) in cash and cash equivalents (3,647) 4,795 4,120 Cash and cash equivalents at beginning of period 13,630 9,983 14,778 Cash and cash equivalents at end of period $ 9,983 $ 14,778 $ 18,898 Supplemental disclosures of cash flow information Cash paid for taxes $ 1,471 $ 2,034 1,932 Cash paid for interest 40 24 74 %24 72 Non-cash investing and financing activities: Receipt of Arris shares in connection with divestiture of Motorola Home 175 Fair value of stock-based awards assumed in connection with acquisition of Motorola $ 24 41 Property under capital lease 258
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