Analysis of LinkedIn Research Paper Example | Topics and Well Written Essays - 1000 words

Analysis of LinkedIn - Research Paper Example Current ratio- The firm’s current ratio is increasing and getting stronger as the year progresses. A ratio of above one indicates the firm can settle its short-term obligation within a financial year and still conduct its operation effectively. This is proven by the networking capital across the year which increases across the year. In the year 2012, the ratio was 2.45 it rose to 4.7 in the year 2014. Return on Assets- The value of assets owned by LinkedIn Corporation is increasing across the financial years that have been analyzed above. However, the return on this asset is decreasing. This simply means that the assets the firm have invested on are not been utilized to the maximum or the resources are in surplus. In the year 2014, the return was in the negative figure because the firm had incurred losses. The revenue generated across the three years was increasing as well as the costs for revenue generation. However, the rate at which the cost of revenue was increasing was hi gher than that of revenue being generated. This has to be taken into account because if this continues LinkedIn profits will be â€Å"eaten-up†. Equity ratio- This ratio indicates a firm dependence on debt to run its operations. From the above analysis, the equity ratio for LinkedIn is good because over 60% of the firm’s asset was financed by its shareholders. However, in the year 2014, the equity ratio dropped to 61.3% from 78.4 % in 2013. According to (Samuels, and Wilkes, 72), it indicates the firm had increased its borrowing.