If you suddenly drop in Google ranking and suspect a Google penalty quickly check your domain name by searching in Google.
e.g. Go to Google and search www.googlepenalty.co.uk and see the domain name is still in Google.
Now search for the brand name of your company by using the exact phrase and see if you rank for the term.
If you end up seeing no results for your website, your website may be penalized by Google.
If you have not been sandboxed and you get results check in Google webmaster tools to see how many pages are indexed by Google.
To do this use the Google site command:-
Look at how many pages you are now indexed and see if there is anything you do not know about.
You will also need to look at the number of Backlinks in Google for your site and you can do this using the link command:-
Depending on the website you have and the amount of backlinks you had before checking you might find all your links have gone.
Check you website Page Rank to see if it has dropped from what was. If your site is new then you may not have a page rank.
Go to your Google Webmasters Tools account and look at your domain to see if Google has notified you of a problem.
You can also check the Google quality guidelines.
Some useful links can be found here:- http://www.chameleonwebservices.co.uk/blog/google-penalty/