Question

You determine the format. I would like you to use some computer application, not pen and paper. I would suggest WORD for any analysis comments and EXCEL for any spreadsheet analysis (Horizontal/Vertical) You are analyzing a company from a financial standpoint and comparing them to another company. Make it easy for us to read and understand. Make a recommendation to deal with this company or not based on your analysis. Choose a company from the following public companies. That means they trade their stock on a major stock exchange to anyone. TARGET, COSTCO, MACYS, NORDSTROM, WALLMART, CVS, ALBERTSONS (includes Safeway), AMAZON, OR KOHLS. Go to the company website to get the full financial information. Or just google the company name and 10K. The 10K or the earnings release at the fiscal year end has the financial results. YOU MUST USE A FULL YEAR INCOME STATEMENT. For most you should be able to find the 2019 10K. If not, use the 2018. Look at the Income statement, and balance sheet. If you want to know what the company says about its financial results read the latest financial statement released by the company.

1. Do a Horizontal analysis of the Income Statement and Balance Sheet and a Vertical analysis of the Income Statement using 2019 and 2018 or 2018 and 2017. If you can download into EXCEL that would work great for this. If not, input the numbers into EXCEL or some other spreadsheet program.

2. Tell me a little about the company.What does the company do? What do they sell?Where are they incorporated? Where is their headquarters? Who are their auditors?Who else is in this business? Who are the competitors?Look at their Statement of Cash Flows – did cash go up since last year or down. What caused the largest increases, largest decreases? List the top 3 things causing cash to go up and 3 causing cash to go down.Do the have a positive net income, is it higher than last year? What are the big changes on the income statement from last year?How do they account for inventory – FIFO, LIFO, or Weighted Avg?How do they depreciate their physical assets, straight line or other?Do they have any unearned or deferred revenue?Is their current ratio higher or lower than last year?What is their stock price per share? Is it higher or lower than a year ago?If you could ask the company president 3 questions, what would they be?

3. Choose a second company from the list above. These are all merchandise companies so choose any one you want. Some might have very big differences in their financials because some sell high volume at lower prices and some sell lower volume at higher prices. Analyze the financial results of the 2 companies side by side including the following: (For this, you will need to find the last full year of financial results for your second company, either 2019 or 2018) Current RatioDebt ratio?Quick ratio (to be discussed in class)How much cash do they have? Gross Profit – some don’t calculate it – if so, skip.Profit Margin (Net Income divided by Net Sales or Revenue)Accounts Receivable Turnover, Average days to collect (365/AR turnover)Inventory turnover. How many times in a year do they turn over inventoryWhat is their earnings per share? Or loss?What is their P/E ratio (use a current stock price, like May 15th)If you had the $$$ to invest, which company would you invest in?

Answer 1

                                                                                                                                    31-12-2019

31-12-2018

Revenue

$280,522

$232,887

Cost Of Goods Sold

$165,536

$139,156

Gross Profit

$114,986

$93,731

Research And Development Expenses

$35,931

$28,837

SG&A Expenses

$64,313

$52,177

Other Operating Income Or Expenses

$-201

$-296

Operating Expenses

$265,981

$220,466

Operating Income

$14,541

Total Non-Operating Income/Expense

$-565

$-1,160

Pre-Tax Income

$13,976

$11,261

Income Taxes

$2,374

$1,197

Income After Taxes

$11,602

$10,064

Other Income

-

-

-

-

-

-

Income From Continuous Operations

$11,588

$10,073

Income From Discontinued Operations

-

-

-

-

-

-

Net Income

$11,588

$10,073

EBITDA

$36,330

$27,762

EBIT

$14,541

$12,421

Basic Shares Outstanding

494

487

Shares Outstanding

504

500

Basic EPS

$23.46

$20.68

EPS - Earnings Per Share

$23.01

$20.14

                                                                                                                                                                              31-12-2019

31-12-2018

Cash On Hand

$55,021

$41,250

Notes And Loans Receivable

-

-

-

-

-

-

Inventory

$20,497

$17,174

Other Current Assets

-

-

-

-

-

-

Total Current Assets

$96,334

$75,101

Property, Plant, And Equipment

$72,705

$61,797

Long-Term Investments

-

-

-

-

-

-

Goodwill And Intangible Assets

$14,754

$14,548

Other Long-Term Assets

$41,455

$11,202

Total Long-Term Assets

$128,914

$87,547

Total Assets

$225,248

$162,648

Total Current Liabilities

$87,812

$68,391

Long Term Debt

$23,414

$23,495

Other Non-Current Liabilities

$51,962

$27,213

Total Long Term Liabilities

$75,376

$50,708

Total Liabilities

$163,188

$119,099

Common Stock Net

$5

$5

Retained Earnings (Accumulated Deficit)

$31,220

$19,625

Comprehensive Income

$-986

$-1,035

Other Share Holders Equity

-

-

-

-

-

-

Share Holder Equity

$62,060

$43,549

Total Liabilities And Share Holders Equity

$225,248

$162,648

Amazon.com is a Fortune 500 e-commerce company based in Seattle, Washington, and has the distinction of being one of the first large companies to sell goods over the internet. In 1994, Jeff Bezos founded Amazon, which launched the following year. If you're of a particular age, you likely remember that Amazon started out as an online bookstore and then quickly diversified by adding other items, including DVDs, music, video games, electronics, and clothing

In 2000, U.S. toy retailer Toys "R" Us entered into a 10-year agreement with Amazon, valued at $50 million per year plus a cut of sales, under which Toys "R" Us would be the exclusive supplier of toys and baby products on the service, and the chain's website would redirect to Amazon's Toys & Games category. In 2004, Toys "R" Us sued Amazon, claiming that because of a perceived lack of variety in Toys "R" Us stock, Amazon had knowingly allowed third-party sellers to offer items on the service in categories that Toys "R" Us had been granted exclusivity. In 2006, a court ruled in favor of Toys "R" Us, giving it the right to unwind its agreement with Amazon and establish its own independent e-commerce website. The company was later awarded $51 million in damages

Amazon uses straight line method to depreciate assets and FIFO method of inventory valuation