Business Questions

1. $9,737
2. One reason for the significant increase in Google’s cost of sales between 2011 and
2013 because of an increased revenue. This would enable Google to employ more
staff as they have more money to spend. As a result of the increased number of staff,
they would need to be paid, so the cost of sales would increase in order to cover the
employee wages. Also, more employees could help to aid an expansion within the
company which would then maximise their productivity and, furthermore, their
sales.
3. One possible reason why Apple’s debt has dramatically risen between 2012 and
2013 is because of the launch of a new product to the general market. In order to
launch a new product, Apple would have to invest heavily into marketing and
specifically advertising. This could lead to an increase in debt as they needed to
promote the product as much as possible in order to compete, in what is a highly
competitive market.
4. $13966
5. $20,035
6. Google’s financial performance can be regarded as a success as their profit at the
end of the year was the highest it had been over the three-year period. This is shown
within the case study as, in 2011 the profit for the year was $9,737 million, however,
in 2013, this has increased to $12,214 million. This is a success for Google as it means
that they have a lot of profit in order to invest or expand in the next year. This will
lead to an increase in revenue next year and give them a competitive advantage in
an already competitive market.

However, it could be said that Google’s financial performance was not a success due
to the increase in cost of sales. This is shown within the case study as, in 2011,
Google’s cost of sales was $13,188 million, however, in 2013, the cost of sales had
nearly doubled to $25,824 million. This is not good for Google as even though they
are increasing their productivity by employing more staff, they are increasing their
labour costs. For a business, like Google, they should be focusing on maximising sales
but minimising costs.

In light of the ideas above, I believe that the financial performance can be regarded
as a success. This is because they achieved their highest profit for the year over the
three years, meaning that they have a large amount of cash in order to invest in
future products or the expansion of the company.