Essay on financial statement auditing

Submitted By 002995095
Words: 985
Pages: 4

A. Company Profile and History
Yahoo was founded by two Electrical engineers Jerry Yang and David Filo who graduadated Stanford University. They originally name the website Jerry and David’s Guide to the World Wide Web, and renamed it to Yahoo in 1995. The two engineers realized their website had a business potential, and later in 1995 Yahoo was incorporated. Yahoo had its IPO raising over 33 million by selling 2.6 million shares at the opening bid of $13 dollars a share.
After surviving the dot-com bubble burst, Yahoo continued to expand its services even further. It acquired several additional search engines, including Inktomi and AltaVista, and today its technology provides one of the largest search engines on the web. In 2003 Yahoo became its own web crawler based search engine, and in 2009 announced that Bing now power Yahoo’s searches. Yahoo is the second largest search engine behind Google.
Yahoo is now focusing on attention of growth, by new engaging products that increase the drive of traffic. The greater the traffic generates, the greater advertiser interest, which ultimately results in revenue growth. Today there are over 400 million monthly mobile users, an increase of more than 150 million users since the company launched the new Mobile and Emerging Products team in 2012.
Flickr is a web and mobile photo management and sharing service that makes it easy for users to upload, store, organize, and share their photos. Members can personally send pictures of family and friends, and can also have the ability to print their photos. Flickr offers all members one terabyte of free storage.
Tumblr in another web service and mobile applications that allow users to create and share content of all kinds. The content can by anything from images and videos and much more. Tumblr’s primary form of monetization is native brand advertising within the Tumblr Dashboard. At the end of 2013, Tumblr was home to nearly 150 million blogs, reaching an audience of hundreds of millions of people worldwide each month.
TRAFFIC: In 2013, we saw several positive traffic trends. By the end of the year, Yahoo had more than 800 million monthly users, with more than 400 million of them joining us on mobile. These numbers do not include IMAP or Tumblr users (SEC.GOV).
Advertiser offering is one of the main concepts how Yahoo creates its revenue. Yahoo can help advertisers connect with users in a more powerful way. Advertisers can advertise there companies, latest news, tends, and yahoo will use its resources to drive the specific audiences needed. With insights into the daily digital habits of more than 800 million people worldwide.

B. Five Accounting Ratios
Current Ratio= current asset / current liabilities
2012 is 5,652,713/1,290,232=4.381160
2013 is 5,025,857/1,340,312=3.749766

Net Working Capital= Net working capital / total assets

2012 is 4,362,481/ 17,103,253=0.255067
2013 is 3,685,545/ 16,804959=0.219313

Profit Margin= net income/ sales

2012 is 1,101,572/3,950,602= 0.278836
2013 is 1,130,820/ 1,376,566= 0.821479

Debt to equity Ratio= total liabilities/ total stockholder equity

2012 is 2,497,650/ 14,605,603= 0.171006
2013 is 3,674,362/ 13,130,597= 0.279832

Asset Turnover Ratio= Sales / Average Total Assets

2012 is 3,950,602 / 1,951,668= 2.024218
2013 is 1,376,566 / 1,932,960.250= .712154

I used the current ratio, because it gave me an idea of the company's ability to pay back its short-term liabilities with its short-term assets. Yahoo was more capable in 2012 than in 2013 in paying of its obligations. I used net working capital, because I wanted to see if the company could fulfill the short-term obligations. For Yahoo it also looked liked 2012 was better than 2013. I chose the profit margin, because it measures how much out of every dollar of sales a company actually keeps in earnings. 2013 was more profitable than 2012, and out of the other ratios 2013