Google’s Treasury Operations: 5 Interesting Facts.
Google marked the 10 year anniversary of its stock market debut in August of last year. Since IPO Google has achieved almost unmatched business and commercial success and it now ranks amongst the largest and most respected companies in the world. Investors in the IPO haven’t fared badly either – one dollar invested then is now worth around 12 dollars. At the time, however, the IPO was considered a failure on a number of fronts as Google sold a lower number of shares than originally expected at a price towards the bottom of its guided range. The Dutch auction mechanism used for allotting shares to investors caused a great deal of confusion and has been rarely used since.
Keep Credit History Good
Being a habitual bill payer signals to banks and issuers that you are a risk worth taking. Paying credit cards or mortgages late will lead to negative consequences that damage your credit score and overall credit health. Banks and issuers consider payment history when evaluating your credit risk. A long-standing history of on-time payments suggests you are responsible and reliable borrower; a poor history suggests you many not repay debts and could result in a costly loss. Remember that a credit report is like an adult report card.
Spend for Retirement
A simple trick for saving: spend less than you earn. That might not be easy if you are already having trouble keeping up with bills. A spending plan would take care of that. Some people call this a budget, but since we’re referring to retirement as something to buy, a spending plan is more appropriate. Think of a budget not as a means to the end of buying a 60-inch television but a budget that will sustain over decades that will put you out ahead financially once you’re deep into retirement.
Avoid High Interest Rates
When it comes to loans, you have to remember that the higher the interest rate, the more you spend money. If you are considering getting a loan, choose one that you can pay for a shorter term even if you have to pay a little more monthly. In this way, you can combat high interest rates and settle your debt in a short period of time. Moreover, take care of your credit history. This will affect your future loans. If you can’t keep from taking out a loan, at least you wouldn’t have to deal with paying more for interest. Lending institutions give higher interest rates to debtors who have a bad credit history.
Keeping Up with the Joneses
By now, you must have heard this a hundred times but yes, some people find it hard to be content with what they have. Not because your office mate bought the latest gadget or a flashy car, you would also find a way to buy one. Perhaps that co-worker had been saving for it for quite some time or has inherited from a relative. You need not have what they have, let alone, impress them. For all you know, that person has to make a lot of sacrifices like juggling several jobs to pay off the financing of the car. Why subject yourself to that when you can be cool with what you have.
Despite being Cash Rich Google Still has some Debt
It may seem unusual for a company with such vast cash reserves to have any debt on its balance sheet but the international nature of Google’s business has meant that a large portion of this cash is actually held overseas, out of reach of the head office treasury team due to the tax implications of bringing it home. At the moment, total debt levels are very low at approximately 5% of equity.
This high level glance at Google’s financial statements gives a telling insight into the scale of the company’s treasury operations. It now ranks on a par with mid-scale financial institutions from a treasury activity point of view. Perhaps the most impressive aspect of the Google treasury story has been the speed of growth since IPO and the positive challenges this has presented. Google is truly a world class organisation, no doubt supported by a world class treasury team.