Internet Exercise

As you know, a companys return on investment (or ROI) is the product of its margin and

turnover. Financial analysts often compute and analyze a companys ROI by obtaining the

required data from its annual report. Unfortunately, the analyst is usually unable to determine the

precise amounts of the companys operating and nonoperating assets. Although this obstacle is a

limitation, the information is still useful to some extent.

Search the Securities and Exchange Commissions EDGAR corporate filings data base at

http://www.sec.gov/edgarhp.htm for the annual report on Form 10-K of each of the two

companies listed below.

Google Inc. (choose the one with the Standard Industrial Code (SIC) of 7370)

Yahoo Inc. (choose the one with the SIC of 7373)

Using data from the two most recent annual reports of these two companies, compute the margin,

turnover, and ROI for each company for the two most recent fiscal years. After reviewing the

ratios, briefly discuss each companys performance, and then compare and contrast the

performances of the two companies.