Question

Choose any company you want to complete this report. For example, Amazon, Dell, Schneider Electric, Google, are all examples of a company you can choose. Please provide sources if possible.

Analyze the financial statements of the firm, which can be typically be found in the annual report in the investors' area of the corporate website, including the income statement, balance sheet, and statement of cash flows:

Do a comprehensive financial ratio analysis, including multiple financial ratios in each of the following categories—short-term solvency or liquidity, long-term solvency, asset management or turnover, profitability, and market value ratios.

Use the following tools to analyze these ratios: trend analysis (going back at least three years) and industry average ratio analysis. If industry average ratios are not available for the company, use an average of two of its nearest competitors.

Evaluate the financial statements and ratios of the firm to find its true condition and valuation.

From the ratio analysis, identify and strengths and weaknesses of the company.

Make conclusions on the current status of the firm based on its history and comparison to its competitors.

Answer 1

Analysis of Financials of Amazon for the fiscal year 2017.

Amazon is becoming the leading company in world. The American Customer Satisfaction Index recently announced the results of its annual survey, and for the 8th year in a row customers ranked Amazon #1. The United Kingdom has a similar index, The U.K. Customer Satisfaction Index, put out by the Institute of Customer Service. For the 5th time in a row Amazon U.K. ranked #1 in that survey. Amazon was also just named the #1 business on LinkedIn’s 2018 Top Companies list, which ranks the most sought after places to work for professionals in the United States.

Its current assets stood at $60197 millions and current liabilities is $57883 millions which results in current ration of 1.039 whereas its competitor EBAY has more liquidity in comparison to Amazon as its current ratio is 2.19 for the same year.

Amazon has Total Assets of $131310 millions and Total Liablities of $103601 millions which results in Debt to Asset ratio of 0.788.

Amazon's Grosss margin ratio in on a increasing trend and has grown to 37% from 29% over the last 4 years. Its Profit is 3.033 billion (2017) 30.9% increase over 2.317 billion (2016).

Its price earning ration is 418.77 which is way more than its estimated of 110.25 while its future PE growth estimated at 279.51%.

Amazon Prime has over 100 million users from which it generated $9.7 billion in subscription revenue. It also has more member and higher retention rate @90% approx than retail giant Costco.

It has a employee base of 560000

Conclusions :-

*As amazon is quickly expandind its business, its rapid growth put new challenges which can be very tactical so solve and may put company in a position more vulnerable to risk.

* The way people discover, analyse, research and avail the services or buy products is always chanding, so accounting for shifts and trends can be difficult and costly in future.

* Its Basic Earning per share is continously growing over the last few years and currently it is been on 480 while in previous year it was 474.

*Company's net sales has increased by $41879 millions however its operating cost is increased by more than additional sales i.e. by $41959 millions. Company should look into this matter very carefully.