You know, in recent times, more and more passions have flared up around the Microsoft offer of Yahoo!
In principle, I do not want to say anything good or bad about this deal, but the recent picture with the fish surprised me :)



I’ll say right away what sunk into my head is the size of the fish. Interestingly, the author of the picture (Daryl Cagle) where did he get it from? From your own head?
')
Therefore, the following simple idea came up - since all companies are joint-stock, this means that they publish their accounts. Those. I can take data for 2007 from open source and see what and how. At the same time and analyze.

And besides, you can see, and what happens as a result of the merger, for example, Microsoft and Yahoo! (if the first can still do it). We’ll take Google for a third to make the game more obvious.

1. Data for analysis

So, I plan this article in two parts. In the first we will analyze the profit and loss statements of both companies, and in the second we will analyze the balance sheets of three companies: Microsoft, Yahoo! and google. To do this, we will use Yahoo! Finance (irony of fate :)

First we get the data, here are the links:
Microsoft
Google
Yahoo!

There will be an interesting feature with dates. The fact of the matter is that Microsoft’s fiscal year ends in the middle of the calendar year (that is, June 30th), while Google and Yahoo! it ends at the end of the calendar year. We will simply ignore the temporary difference, since we will have data for one full year of work. When he was - do not take into account.

2. How to analyze a pancake?

The classics of learning financial analysis at this point can go to smoke, because here I will somewhat simplify complex things.


^Clickable

All numbers are in thousands of dollars, so you need to add three more zeros to the end of the number.

What we can see on the links is collected in one picture and translated into almost Russian. Explain? With pleasure :)

Revenue. I hope you should not tell what it is? This is the total amount of money that our company received during the year. I must say that the revenue does not necessarily apply to services and goods rendered and sold during the year.

For example, I rendered a service to a man on December 31, 2007. I will get money from him only in 2008, so they will be in 2008 revenue. The costs that I incur for the provision of services in 2007 I will show in 2007, but the revenue will appear in 2008.

This may seem strange to someone, but payment does not always follow on the heels of a product or service. In order to attract customers, I can allow them to pay later. Of course, this will somewhat distort my financial result :)

About numbers in revenue. I don’t think that someone may have questions about the scope.

There is, however, one comment regarding the proposed Yahoo! prices To get a better idea of ​​it, imagine that you are preparing to buy a thing that costs 80% of all your annual income (Microsoft offered more than 40 billion with a revenue of 51 billion, that is, approximately 80% of revenue). Of course, you can proudly look and say "choke", but remember that even in Russia, banks quietly lend to legal entities for the amount of annual turnover. This is a lifting amount, quite.

Cost price. This is the parameter about which you will need to talk for a long time. If we are talking about material things, then it is simple, this indicator.

There is, for example, a car. Its cost price is the cost of materials and labor spent on it.

And what about the software? Moreover, it is measured only by the labor expended, but it can be used repeatedly, because the library, for example, can be connected to another program. Therefore, cost accounting is an internal business of the enterprise, about which you can learn from the explanations for investors. At the end I will give links, anyone can read.

About the figures in the cost. Here we can already try to analyze the difference. Not in absolute terms, of course, but in relative terms. I do not think that the release of box software for Google is the main activity, but in any case, Google spends 40% of its revenue on creating products, while Microsoft is only 20%. Yahoo! is on a par with Google, the same 40%. We will see how they affect;)

Gross profit . After we took and subtracted the cost of sales, we still have gross profit. It’s too early to talk about net profit, since we’ll deduct expenses from the gross profit, the rest. A figure is needed in order to take a breath :)

Go ahead, now we have the amount of current expenses. And here comes the complete frenzy. If Google and Microsoft spend on current spending about 50% of revenue, then Yahoo! lays all 83%. I will say right away that for a normal company it is suicide. And what is the main item of these expenses? That's right, salary and sales expenses.

For the sake of analogy, imagine that the company has not been paid a salary for the third month, while the director buys a third Ferrari for his company and calls Michael Schumacher as a driver for one thousand euros per hour.

You say, “Damn, but how is it, why? And what, it has always been like that ?! ” No not always. If we follow the link above ( here it is , for convenience), we will see that the year before the ratio was exactly the same, but in 2005 it was at the level of 63%.

Summing up the current expenditure, I can say one thing. Such financial management is only possible in Yahoo! and in state enterprises of Russia. Imagine that you would skip 83% of your salary in clubs to sound like a cool guy. Is it any wonder then that there is only enough for Rollton? And no one is somehow in a hurry to give you money for your cool party at the club.

Now, as soon as we deducted the running costs, we got a current profit. This figure is also needed in order to take a breath; we still have to subtract those expenses that cannot be directly linked to the activity, i.e. indirect costs.

Indirect income and expenses can be viewed in the attached file, I think everything will be clear there and there is no need to spread porridge on the table. The only feature was that either on Yahoo! Finance was oblique data on Yahoo !, or me and Excel have forgotten how to count. But in the end it turns out that the net profit of Yahoo! would have to be lower.

3. Conclusions

Now let's think together. Suppose it turns out that Microsoft successfully gets Yahoo! into your own hands. What will happen? Let's summarize the two-column articles and name our new transnational giant Michoo! ;)



As you can see, the result of the injection of Yahoo! - as an elephant pellet. Microsoft's net profit from this will increase by as much as six hundred million, and if as a percentage, by as much as 3%. Yes, it became a little tastier, but if something is powdered with powder, there will be something powdered with powder, no more and no less. And further. With this level of spending, I believe that the leadership of the fictional Michoo Corporation! expel nafig all employees of the former Yahoo! on their own, for their appetites obviously do not match the capabilities of the last couple of years.

We can do even better. We can take an idealized Yahoo! since 2005, for example, but from this it will not be better. I will probably leave this task to Excel lovers;)

I don’t understand at all how with such a disastrous profit and loss account the head of Yahoo! Jerry Yang for Yang was not hanged at the next meeting of shareholders. And please do not think now that Yahoo! once stood at the origins, etc. Here is a business, not a nursing home with the memories of who and when hacked into what.

And going back to the fish picture, are you still sure that it should look like that? :)

Believe me, nothing personal to Yahoo !, but they do not understand a bit (or pretend) that they are just a change card in this game. With their ridiculous sales, they represent almost nothing of value. The collapse of the dot-coms, it seems to me, clearly showed that you can blow a soap bubble in any way you like, only finances remain impartial.

Yes, of course, I do not in any way deny the importance and necessity of services from Yahoo! They are great that started so long ago and is still in business. They are great even in the fact that until recently they keep the maiden innocence, and rest their paws.

I say goodbye to this at the moment, we still have an analysis of the balance sheets of companies ahead of us, we will see many more interesting things there. And as usual, if I didn’t say something in sufficient detail, then you are welcome in the comments.

Damn, I almost forgot. The file with calculations and comments can be downloaded here .

With love,
maniaque