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FIN-350 Benchmark Final Draft 2020

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Financial Statements Project: Amazon Financial Statements Project: Amazon AMAZON.COM, INC released its financial reports to the U.S. Securities and Exchange Commission. The most important one, was ... the annual report of Amazon. In this paper I will analyze the "Management Discussions and Analysis of Financial Condition and Results of Operations" and "Financial Statements and Supplementary Data" sections of Amazon.com, Inc annual report. This analysis will focus on the following aspects: Liquidity, Effectiveness, Leverage, and Profitability to give insights on the overall financial strength, efficiency, and effectiveness of the organization to determine whether the company is favorable. Liquidity First, we will look at the current ratio, a liquidity ratio that assesses a company's potential to repay short-term responsibilities. A company's total current assets divided by its total current liabilities is how you solve for the current ratio. Amazon.com's current ratio for the quarter in Dec. 2019 was 1.10. Throughout the previous 13 years, Amazon.com's peak current ratio was 3.09. The lowest was 1.04. The is ranked lower than 69% of the companies in the Retail - Cyclical industry (gurufocus.com,2020) . This ratio can offer a conscious on the proficiency of a company's operational cycle or its ability to turn its merchandise into cash. Companies who have difficulty receiving payments on their receivables or elongated supply turnovers can move into liquidity conundrums because they are unable to lighten their responsibilities. Effectiveness The more developed the current ratio, the more proficient the company is about paying its obligations. An adequate current ratio may differ from business to business. The ratios are generally between 1 and 3 for solid, more durable businesses (Melicher, 2017). Since business operations differ in each industry, it is always more beneficial to compare businesses within [Show More]

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