Assessing a Company’s Future Financial Health – Google

Assessing a Company’s Future Financial Health – Google

Financial Future of Google

Google is no doubt a remarkably successful company. Just in 15 years, the company has been able to create the world’s most valuable franchise. Google has a great future based on the many products and adding to its portfolio besides its rigorous expansion drive. In its initial years. Google financed its operations through internal finances bow; it is a huge company with good financial muscles, and the company’s future financing will come from external financing. Google has many projects it hopes to accomplish soon. These projects require financing. Some of the external financing needs Google will have shortly include research and development. Google is an information and technology company, and its business model leverages the innovation of new products (Singh, 2020).  Since there is increasing competition in the IT industry, the company is focused on increasing its innovative momentum to stay ahead of its competitors. Therefore, in the future, the company wants to innovate more than today, and this innovation comes as a result of research and development.

Need help with your assignment ? Contact us at eminencepapers.com to get quality services.

Therefore, the obvious future financial needs that Google would want to be financed by our research and development. The second external financial need that Google will have in the future is Africa’s digital future. Recently, Google announced a $1 billion commitment to the African continent’s digital transformation. This investment is planned for the next five years. This fund will support several activities, including Equiano and undersea cable geared towards improving internet speeds to drive down the costs of the internet in Africa (Africa Times, 2021).  Google will have to source these funds from external sources to fund the projects. In 2020, Google also announced that it has a plan of $10 billion to accelerate the adoption of digital services in India as its key overseas market. All these funds will be sourced from external sources (Singh, 2020). These are just but a few of the future external financing needs of Google; the company has numerous projects that will need external financing.

Access to Target Sources of External Finance

Despite the huge projects that Google has planned, there is a high probability that Google will manage to accomplish most of them. This is because the company has a good financial standing in that it will use its financial strengths to push the implementation of these projects. Some of the targeted external financing sources include equity financing, debt financing, and long-term loan financing. Since Google has a strong financial status, it can easily access all these types of external financing (Chan et al., 2010). The creditors usually check the borrower’s financial strength before lending it funds. Many creditors will readily offer Google some loans to fund its projects because they know that Google is a well-established company that would casually repay the loans.

In the external source, the finances are sourced from outside the business. The external sources are proffered when the requirement of the finding seems to be huge. For example, India’s project requires $10 billion; this is a huge amount of money that cannot be sourced internally. In external financing, collateral security is often required, especially when the amount borrowed is huge (Chan et al., 2010). The ease of accessing the external financing option by Google may also depend on many factors, such as the company’s profitability, the viability of the projects, the debt-to-equity ratio, and the credit history of the company. As much as there are several options for external finances, Google should settle on the option that yields less expense. The terms of the finance should be reasonable and favorable.

References

Africa Times. (2021). Google commits $1 billion in new funding to Africa’s digital future. Retrieved from https://africatimes.com/2021/10/06/google-commits-1-billion-in-new-funding-to-africas-digital-future

Chan, W et al., (2010). External Financing Needs, Corporate Governance, and Firm Value. Corporate Governance An International Review 18(3) DOI:10.1111/j.1467-8683.2010.00801.x

Singh, M. (2020). Google will invest $10 billion in India. Retrieved from  https://techcrunch.com/2020/07/13/google-to-invest-10-billion-in-india/

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

---

This is a Collaborative Learning Community (CLC) assignment.

The purpose of this assignment is to assess Google’s financial future.

This assignment is the third component of your group’s comprehensive financial analysis project. The steps referenced here follow the nine-step assessment process detailed in Assessing a Company’s Future Financial Health.

Component 3 – Part 1

For this part of the assignment, your group will write a 500-word analysis of your chosen company (GOOGLE)  based on the following two steps of the nine-step assessment process.

Step 5: Future External Financing Needs

Step 6: Access to Target Sources of External Finance

Prepare this part of the assignment according to the guidelines found in the APA Style Guide located in the Student Success Center. An abstract is not required.