The work has not been graded but I like the output that was submitted to me. Is it possible for the same prof to do the next assignment I will be submitting? If possible, I will greatly appreciate it.
Presentation/PPT
26/08/2022
Accounting
Name:
Institutional Affiliation:
Date:
Ratio analysis using financial statements of a U.S. public company
I chose Amazon Inc. as my public company as its aggressive ways of marketing and
selling is of interest to me. They have been around for close to 25 years now, in technological
and computing, e-commerce as well as video-streaming services. As of 2018, they had an
operating income of US$12.421 billion and a net income of US$10.073 billion as of the same
year, and the website from which I got the statement is
https://www.macrotrends.net/stocks/charts/AMZN/amazon/financial-statements.
Amazon has been eyeing new initiatives and markets, and it has caused a stir in its
spending, therefore disappointing in the past in terms of earnings. However, its successes
supersede its failures in terms of operating losses. They are losing more than they expected.
Though brought in close to $19.32 billion, they are missing on $15 million every quarter, in
net income. Though there has been speculation that they might be reinvesting the money,
comparing what goes back to the shareholders does not look good.
Total assets include a company’s present and long-term assets in a balance sheet, and
it is crucial in knowing how the assets are efficiently put to use. As per the table given, their
total assets as of 31
st
December 2018 was $162.64 billion which was a 23.9% increase from
the year 2017.
Statement of shareholder equity also called the statement of retained earnings is the
total amount of equity at the beginning and the end of an accounting period by the business
owners. It shows the equity balance at the start of the period, what has been added or
subtracted to the balance and finally the ending balance. Amazon’s stakeholder’s equity was
at $43,549 million at the end of 2018, which was an increase from $27,709 million in 2017.
Statement of cash flow is divided into three sections – cash from investing, financing
and from operations. It provides insight on the company’s cash payments as well as cash
receipts during a specified period. The company’s financial position is then linked to the final
cash balance as compared to the beginning.
Additionally, there is a difference in the cash flow and income statements. The cash
flow statement is used to monitor the amount of money in a bank account for instance when a
company paid and received payment. The income statement is what tracks the company’s
profits. Though similar to the cash flow statement, it does not necessarily keep a record of
money going out or that which comes in, instead they use a time basis, like when they
occurred. Amazon’s net cash flow is $10, 317 million which is an increase from 2017’s
$1,992 million. As for the company’s income statement, 2018 saw them with $10.073 million
while in December 2017, they had $3,033 million.
Moreover, there are other kinds of information related to financial statements. Profit
margin is the amount of revenue, in percentage, that a company keeps after all deductions are
made. Using both the current and historical data on the gross, net and operating margin over
the last ten years shows the profit margin at 4.33% in December 2018.
Also, there is the price to earnings ratio which is gotten by dividing the closing price
by recent earnings per share numbers. The price to earnings ratio is used as a way to measure
value and determines if a stock is over or undervalued. As of February 22nd, 2019, Amazon’s
P/E ratio was at 81.05
Works Cited
Brigham, K., Eugene F. and Joel F. Houston (2001). Fundamentals of Financial
Management. Harcourt College Publishers, Fort Worth,
Graham, Y., John R. and Campbell R. Harvey. (2001). The Theory and Practice of
Corporate Finance: Evidence from the Field, Journal of Financial Economics.
Amazon Financial Statement 2005 – 2018, retrieved from
https://www.macrotrends.net/stocks/charts/AMZN/amazon/financial-statements.
The work has not been graded but I like the output that was submitted to me. Is it possible for the same prof to do the next assignment I will be submitting? If possible, I will greatly appreciate it.
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