'Assignment Working Capital Essay\r'

'Abstract\r\nIn this motif I’ll analyze the fundamental battles between the running(a) large(p) structures and components for Google and Oracle, and speculate upon the main reasons why much(prenominal) differences exist; how each caller-out could improve its running(a) functional crown positions. As a Wall pathway psychoanalyst who has to recommend one of the companies as an enthronization to a fede dimensionn’s clients; based entirely on that comp each’s work capital; as an investiture Banker who has to recommend loaning a substantial amount of capital to one conjunction based solely on that comp whatever’s works capital.\r\nWorking capital structures\r\nThe selected companies that I energize selected to equivalence argon Google and Oracle. Google Inc. is a company that specializes on providing online tools such(prenominal) as search, differences between the working capital structures and components for each chosen company. Oracle Corpo proportionn is trusty for developing, marketing, and servicing of database and middleware software, system hardware and software applications. The company also offers consulting services in areas such as business architecture planning and design, and enterprise and information technology alignment. Both Google Inc. and Oracle Corporation read been performing well thus investments can be made in the companies. In the pecuniary year 2014 Google Inc. had a net income of $16.86 million, an increase of 17% compared to the antecedent year. The net service margin for the company was registered at 29%. (morningstar.com)The commensu locateness sheet provides that the Morningstar.com had total asset amounting to 72.89 million which is an increase from previous year.\r\nTotal organisational profits were amounting to 110.9 million and shareholders’ equity of 87.31millions. The fiscal ratios for the company indicate that the company had a debt to equity ratio 0.05 indicating that its equity is enough to cover debt. The current ratio for the year 2014 was 8.0 showing that current liabilities cannot be to the full covered by the current assets. An another(prenominal) financial ratio indicating company financial condition is disk value per share which amounted to $145.68. Investment hold back ratios take repay on equity of 14.80%, return on assets of 11.65% and return of capital of 18.1 indicating that the company is adequate apply its assets and equity to generate returns for the company. Morningstar (2014) provides that Google had a price earning of 18.88 and kale per share of 27.72 indicating that income is high.\r\nIn order to de endpointine the hazard of investing in the company I set the beta value which is provided at 0.91. (morningstar.com) On the other hand Oracle Corporation registered 28.62% decrease in net income in 2014 which is .7% increase compared to 2013. The net profit margin for the compared is established at 81.09%. The total assets in the company as at 31st may 2014 was $ 99,726.00 indicating a strong asset base while the total liabilities amounted to $13,377.00 and shareholders’ equity was valued at $ 47.93 million.\r\nThe financial condition in Oracle can be identified using financial analysis such as current ratio which is determined to be 2.8 for the company showing that current liabilities are greater compared to current assets. The debt to equity ratio is determined to be 0.40 thus the company is able to meet its debts as and when it arises. Interest coverage is provided at 16.4 while account book value per share is 10.50. Oracle’s return on equity for the financial year 2014 was 23.4, return on assets 12.13% was while return on capital was 17.42 thus the company is effective in generating returns for equity. The reduce pelf per share is 2.38 and the beta value is provided at 2.39. (Morningstar.com) Improve working capital\r\nImproving working capital position, a company is able to co mpare from year to year any increase in revenue; increase in production delinquent to a decrease in variable or fixed costs, increase in sales repayable to a new sales workforce and any increase in liabilities; new short term creditors, a higher accounts payable account repayable to the need to purchase new materials. A company can improve its working capital by trying to keep a healthy balance between the two accounts, cutting costs, and analyzing its current short-run debt in terms of how to decrease it or visualize alternative ways to avoid it such as restructuring production procedures. (Schroeder, el. 2014)\r\nRole of a Wall highroad Analyst\r\nAs Wall Street Analyst deciding which company to invest in I would determine whether the company is stable financially, investment returns and risks associated with the investments. sodding(a) working capital gist the amount invested in the current assets of the company.Net working capital means the difference between the current assets and current liabilities. If the current assets are more than the current liabilities, then it is positive working capital. Otherwise, it is negative working capital. Working capital is the valuate of company’s solvency, its ability to pay its suppliers without any delay. Considering these factors I would invest in Google since it has higher earnings per share and an investor is likely to receive higher returns when dividend is paid. Google has registered stronger harvest compared to Oracle evidenced by increase in profit levels. (Schroeder, el. 2014)\r\nInvestment Bank\r\nAs an Investment Bank whom with solely working capital by increase in current assets is the outflow of cash and when the company increases its current liabilities, it is inflow of cash. If the changes in working capital are negative, it means the company is hard investing on current assets or cut the current liabilities. When the changes in working capital is positive, it means the company is sel ling of current assets or change magnitude its current liabilities. I would especially invest in Google’s bonds compared to stock since bonds have a guaranteed rate of interest thus I would be receiving returns by and by an agreed period. Selection of bonds over stock is support by the fact that the company has a disgrace beta vale compared to Oracle thus it has slight risk to default on the loan. (Schroeder, el. 2014)\r\nReferences\r\nGoogle Inc. Financials circulate Retrieved November 16, 2014 http://financials.morningstar.com/ratios/r.html?t=GOOG Msn. (2014). Oracle Corporation. Financial Results. Retrieved November 16, 2014 from Http://Moneycentral.Msn.Com/Investor/Invsub/Results/Statemnt.Aspx?Lststatement=Balance& symbol=Us%3aorcl&Stmtview=Qtr Oracle Corporation Financials Report Retrieved November 16, 2014 http://financials.morningstar.com/ratios/r.html?t=ORCL Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2014). Financial Accounting surmisal And\r\n '