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Trand Analysis of Balance

Trend Analysis of Income

Common Size of Balance

Common Size of Income

References

All dollars are in
thousands

December 31, 2005

December 31, 2004

December 31, 2003

December 31, 2002

Net
Operating Revenues

$5,257,668.00

100%

$3,574,517.00

100%

$1,625,097.00

100%

$953,067.00

100%

Cost of Goods Sold

$2,096,201.00

40%

$1,342,338.00

38%

$   370,092.00

23%

$162,881.00

17%

Gross
Profit

$3,161,467.00

60%

$2,232,179.00

62%

$1,255,005.00

77%

$790,186.00

83%

Operating Expenses

$2,053,742.00

39%

$1,543,598.00

43%

$   959,339.00

59%

$701,998.00

74%

35%

Income from Operations

$1,107,725.00

21%

$   688,581.00

19%

$   295,666.00

18%

$
88,188.00

9%

Other Revenues and Expenses

$1,435,857.00

27%

$   496,443.00

14%

$    47,506.00

3%

$
69,287.00

7%

Income
from Continuing Operations before Tax

$2,543,582.00

48%

$1,185,024.00

33%

$   343,172.00

21%

$178,225.00

19%

Tax
Expense

$   767,816.00

15%

$   437,966.00

12%

$   147,024.00

9%

$  71,290.00

7%

Income from Continuing Operations

$1,775,766.00

34%

$   747,058.00

21%

$   196,148.00

12%

$106,935.00

11%

Nonrecurring Items

0%

0%

0%

$
-

0%

$
-

0%

$
-

0%

$
-

Net Income (Loss)

$1,896,230.00

36%

$   839,553.00

23%

$   237,879.00

15%

$
42,815.00

4%

The common size of the income statement for Yahoo! shows a couple of
compelling facts. First Gross profit has steadily decreased since 2002, yet
operating expenses have also decreased. This is one of the main reasons for
the steady increase in retained earnings demonstrated in the trend analysis
of the balance sheet. Next, the other revenues and expenses has become a
larger part of Yahoo!'s revenue generations. Until 2005, income from operations
consistently was the breadwinner of the company. Finally, the percentage of
net income to net revenues has constantly experiences low two-digit growth
since 2002.

All dollars are in
thousands

December 31, 2005

December 31, 2004

December 31, 2003

December 31, 2002

84%

573%

Current
Assets

$
3,449,533.00

1109%

$4,090,475.00

1315%

$   713,539.00

229%

$   310,972.00

100%

Property, Plant & Equipment

$
697,522.00

188%

$
531,696.00

143%

$
449,512.00

121%

$
371,272.00

100%

Other
Assets

$
57,192.00

33%

$
242,029.00

139%

$
247,539.00

142%

$
174,020.00

100%

Total
Assets

$10,831,834.00

388%

$9,178,201.00

329%

$5,931,654.00

213%

$2,790,181.00

100%

Current
Liabilities

$
1,204,052.00

292%

$1,180,707.00

287%

$   707,796.00

172%

$   411,814.00

100%

Long-term
Liabilities

$     749,995.00

74999500%

$   750,000.00

75000000%

$   750,000.00

75000000%

$
1.00

100%

Contributed
Capital

$
67,792.00

6779200%

$
65,875.00

6587500%

0%

$
1.00

100%

1287%

464%

100%

Retained
Earnings

$      2,966,169.00

39586%

$    1,069,939.00

14279%

$
230,387.00

3075%

$
(7,493.00)

100%

Other
Stockholders’ Equity

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

Total
Liabilities & Stockholders Equity

$10,831,834.00

388%

$9,178,201.00

329%

$5,931,654.00

213%

$2,790,181.00

100%

$      8,556,415.00

$    7,101,446.00

$    4,363,490.00

$    2,262,270.00

profit per $1

$
0.175

$
0.091

$
0.040

$
0.015

revenue
to assets

$
0.49

$
0.39

$
0.27

$
0.34

return
on Assets

$
0.18

roe

$
0.18

financial
leverage

$
1.27

$
1.29

$
1.36

$
1.23

By looking at the trend analysis of
the balance sheet, Yahoo! has experienced tremendous growth since 2002.
Assets increased 10 fold while liabilities only tripled. Long-term
liabilities were non-existent before 2003, since then, long-term debt
remained constant at $750 million. Finally, management started to invest back
into the company in 2003.

All dollars are in
thousands

December 31, 2005

December 31, 2004

December 31, 2003

December 31, 2002

147%

220%

Net
Operating Revenues

$5,257,668.00

552%

$3,574,517.00

375%

$1,625,097.00

171%

$953,067.00

100%

Cost of Goods Sold

$2,096,201.00

1287%

$1,342,338.00

824%

$   370,092.00

227%

$162,881.00

100%

Gross
Profit

$3,161,467.00

400%

$2,232,179.00

282%

$1,255,005.00

159%

$790,186.00

100%

Operating Expenses

$2,053,742.00

293%

$1,543,598.00

220%

$   959,339.00

137%

$701,998.00

100%

Income from Operations

$1,107,725.00

1256%

$   688,581.00

781%

$   295,666.00

335%

$
88,188.00

100%

1045%

Other Revenues and Expenses

$1,435,857.00

2072%

$   496,443.00

717%

$    47,506.00

69%

$
69,287.00

100%

289%

Income
from Continuing Operations before Tax

$2,543,582.00

1427%

$1,185,024.00

665%

$   343,172.00

193%

$178,225.00

100%

Tax
Expense

$   767,816.00

1077%

$   437,966.00

614%

$   147,024.00

206%

$
71,290.00

100%

Income from Continuing Operations

$1,775,766.00

1661%

$   747,058.00

699%

$   196,148.00

183%

$106,935.00

100%

Nonrecurring Items

$
-

$
-

$
-

$
-

Net Income (Loss)

$1,896,230.00

4429%

$   839,553.00

1961%

$   237,879.00

556%

$
42,815.00

100%

0.649616776

A
quick glance at the trend analysis of the income sheet show steady growth of
the company. Revenues and profit have almost doubled every year since 2002.
Whereas expenses have increased, the increase has been slower than profits,
hence allowing profits to increase that much faster. As expected taxes have
eaten away at the increases, but that is expected and planned for. Finally,
"other" revenues have increased about 20 times 2002. Looking at the
past four years as a guide, the growth of Yahoo! has not waned at all, and
the next couple of years should demonstrate the continued growth.

All dollars are in
thousands

December 31, 2005

December 31, 2004

December 31, 2003

December 31, 2002

Current
Assets

$
3,449,533.00

32%

$4,090,475.00

45%

$   713,539.00

12%

$   310,972.00

11%

Property, Plant & Equipment

$
697,522.00

6%

$
531,696.00

6%

$
449,512.00

8%

$
371,272.00

13%

Other
Assets

$
57,192.00

1%

$
242,029.00

3%

$
247,539.00

4%

$
174,020.00

6%

Total
Assets

$10,831,834.00

100%

$9,178,201.00

100%

$5,931,654.00

100%

$2,790,181.00

100%

Current
Liabilities

$
1,204,052.00

11%

$1,180,707.00

13%

$   707,796.00

12%

$   411,814.00

15%

Long-term
Liabilities

$     749,995.00

7%

$   750,000.00

8%

$   750,000.00

13%

$
-

0%

Contributed
Capital

$
67,792.00

1%

$
65,875.00

1%

0%

$
-

0%

Retained
Earnings

$      2,966,169.00

27%

$    1,069,939.00

12%

$
230,387.00

4%

$
(7,493.00)

-0.3%

Other
Stockholders’ Equity

0%

0%

0%

0%

Total
Liabilities & Stockholders Equity

$10,831,834.00

100%

$9,178,201.00

100%

$5,931,654.00

100%

$2,790,181.00

100%

The Common size of the balance sheet
illustrates the constant growth of management retaining earnings. Long-term
liabilities have constantly decreased every year since it acquired long-term
debt. Current liabilities have remained in the preteens with changes of a
couple of percentage times. Finally, current assets as a percentage of total
assets have increased over 20% since 2002.

References:

10-K
2004 Report. (2005, March 11). Yahoo Investor Relations. Retrieved June 16, 2006 from
http://yhoo.client.shareholder.com/EdgarDetail.cfm?CIK=1011006&FID=1047469-04-5976&SID=04-00

Yahoo!
(2006). 2005 Annual Report.
Sunnyvale, CA: Author.