BUS1101 Financial Statements and Investor Relations of a Company Paper

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Business Finance

Description

Financial Statements

Choose a company whose products you use, or a company where you would like to be employed, and obtain its most recent annual report. (Note: Annual reports can usually be found under the “investor relations” area of the company’s website.)

  1. Using information from the balance sheet and income statement, calculate the company’s current ratio and the profit margin ratio.
  2. Interpret the results of your ratio calculations in terms of the company’s financial performance (strengths or weaknesses).

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Explanation & Answer

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Running Head: FINANCIAL STATEMENT ANALYSIS

Financial Statement Analysis
Student’s Name
Institutional Affiliation

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FINANCIAL STATEMENT ANALYSIS
Introduction

Amazon is one of the biggest international technological companies operating all over the
globe. It is a publicly traded company hence it has its financial statements released for the public
for stakeholders to make relevant decisions. This paper is going to analyze its financial
performance through calculating current and profit margin ratios as well as interpreting them.
Ratio Calculations
According to the annual report of the Amazon.com Inc. for the financial year 2018
(Yahoo finance), the consolidated balance sheets and the consolidated statements of operations
provide the information useful for calculating current ratio and profit margin ratio respectively as
shown by the extracts.
Current Ratio

This is one of the liquidity ratios obtained through division of total current assets to the
total current liabilities (Ahmed, 2015). Therefore, the Amazon.com Inc.’s current ratios as per
the financial statements are;

Current ratio = Total current Asse...


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