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Financial Reporting - II

1

The purpose of this research is to analyze the information contained in the financial statements that is income statement and balance sheet of Yahoo! Inc. Yahoo! Inc. fiscal year ends on 31st December and operates under technology sector and internet information providers industry. It provides search and display advertising services on yahoo properties and affiliate sites worldwide. Hence its focus is on informing, connecting and entertaining its users.

Financial Statements Analysis:

As per company’s balance sheet given below, company shows its assets in proper headings. Under heading current assets all current assets are shown in the order of liquidity. After current assets company has shown its investments and non-current assets. Thus, company assets are classified in the following order:

a) Current Assets

b) Investments

c) Property, Plant, and Equipment

d) Intangible Assets

e) Other Assets

A cash equivalent is a highly liquid investment having a maturity of three months or less. Examples of cash equivalents are: Commercial paper; Marketable securities; Money market funds; Short-term government bonds; Treasury bills.

At the end of the year 2014 company’s cash and cash equivalents are of $2,667,778 thousands. The same at the end of the year 2013 was $2,077,590 thousands. Thus, there is a significant increment in cash and cash equivalents in the year 2014. This is a positive change so far company’s liquidity is concerned.

Company’s total current liabilities at the end of its most recent annual reporting period (2014) are $1,290,232 thousands and the same at the end of the year 2013 was $1,340,312 thousands. Thus, there is significant decline in company’s current liabilities, which is excellent for the company from the liquidity point of view.

Potential investor wants to know the financial viability of the company and proper classification of the assets in the balance sheet assists them to have a fair idea about company’s property. Sufficient cash and cash equivalents ensures investors timely payment of return on their investment by the company. Creditors can also measure safety and timely payment of their dues or claims on the company besides this it help the employee to identify timely payment of their salaries.

The amount of current liability is a key factor of determining company’s liquidity position. Sound liquidity position of the company helps the investors, creditors to take their investment decisions without any uncertainty.

FINANCIAL STATEMENTS OF YAHOO! INC.

Income Statement

View: Annual Data

All numbers in thousands

Period Ending

Dec 31, 2014

Dec 31, 2013

Dec 31, 2012

Total Revenue

4,618,133  

4,680,380  

4,986,566  

Cost of Revenue

1,298,314  

1,349,380  

1,620,566  

Gross Profit

3,319,819  

3,331,000  

3,366,000  

Operating Expenses

Research Development

1,207,146  

1,008,487  

885,824  

Selling General and Administrative

1,809,011  

1,700,375  

1,641,819  

Non Recurring

191,864  

67,321  

236,170  

Others

66,750  

44,841  

35,819  

Total Operating Expenses

3,274,771  

2,821,024  

2,799,632  

Operating Income or Loss

142,942  

589,926  

566,368  

Income from Continuing Operations

Total Other Income/Expenses Net

10,467,333  

123,307  

4,647,839  

Earnings Before Interest And Taxes

10,610,275  

713,233  

5,214,207  

Interest Expense

-  

-  

-  

Income Before Tax

10,610,275  

713,233  

5,214,207  

Income Tax Expense

4,038,102  

153,392  

1,940,043  

Minority Interest

(10,411)

(10,285)

(5,123)

Net Income From Continuing Ops

7,619,625  

1,446,231  

3,945,479  

Non-recurring Events

Discontinued Operations

-  

-  

-  

Extraordinary Items

-  

-  

-  

Effect Of Accounting Changes

-  

-  

-  

Other Items

-  

-  

-  

Net Income

7,521,731  

1,366,281  

3,945,479  

Preferred Stock And Other Adjustments

-  

-  

-  

Net Income Applicable To Common Shares

7,521,731  

1,366,281  

3,945,479 

Balance Sheet

View: Annual Data

All numbers in thousands

Period Ending

Dec 31, 2014

Dec 31, 2013

Dec 31, 2012

Assets

Current Assets

Cash And Cash Equivalents

2,667,916  

2,077,590  

2,667,778  

Short Term Investments

5,327,412  

1,330,304  

1,516,175  

Net Receivables

1,032,704  

979,559  

1,008,448  

Inventory

-  

-  

-  

Other Current Assets

671,075  

638,404  

460,312  

Total Current Assets

9,699,107  

5,025,857  

5,652,713  

Long Term Investments

44,588,259  

5,015,847  

4,678,582  

Property Plant and Equipment

1,487,684  

1,488,518  

1,685,845  

Goodwill

5,163,654  

4,679,648  

3,826,749  

Intangible Assets

470,842  

417,808  

153,973  

Accumulated Amortization

-  

-  

-  

Other Assets

550,798  

177,281  

1,105,391  

Deferred Long Term Asset Charges

-  

-  

-  

Total Assets

61,960,344  

16,804,959  

17,103,253  

Liabilities

Current Liabilities

Accounts Payable

4,191,618  

1,045,813  

993,306  

Short/Current Long Term Debt

-  

-  

-  

Other Current Liabilities

336,963  

294,499  

296,926  

Total Current Liabilities

4,528,581  

1,340,312  

1,290,232  

Long Term Debt

1,170,423  

1,110,585  

124,587  

Other Liabilities

143,095  

116,605  

-  

Deferred Long Term Liability Charges

17,332,653  

1,106,860  

1,082,831  

Minority Interest

43,755  

55,688  

45,403  

Negative Goodwill

-  

-  

-  

Total Liabilities

23,218,507  

3,730,050  

2,543,053  

Stockholders' Equity

Misc Stocks Options Warrants

-  

-  

-  

Redeemable Preferred Stock

-  

-  

-  

Preferred Stock

-  

-  

-  

Common Stock

945  

1,015  

1,187  

Retained Earnings

8,937,036  

4,267,429  

5,792,459  

Treasury Stock

(712,455)

(200,228)

(1,368,043)

Capital Surplus

8,496,683  

8,688,304  

9,563,348  

Other Stockholder Equity

22,019,628  

318,389  

571,249  

Total Stockholder Equity

38,741,837  

13,074,909  

14,560,200  

Net Tangible Assets

33,107,341  

7,977,453  

10,579,478  

Reference:

Yahoo Finance. (2015). Yahoo! Inc. (YHOO). Income Statement. Retrieved from https://in.finance.yahoo.com/q/is?s=YHOO&annual

Yahoo Finance. (2015). Yahoo! Inc. (YHOO). Balance Sheet. Retrieved from https://in.finance.yahoo.com/q/bs?s=YHOO&annual