Maricopa Community College Ratio Analysis for Zoom and Amazon Companies

User Generated

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Business Finance

Maricopa Community College

Description

PLEASE READ AND ANALYZE BEFORE ACCEPTING WORK!

All I need is a summarization of the spreadsheet and data have been already provided, see attached files. ALL YOU NEED TO DO IS FINALIZE THE SPREADSHEET, DO THE RATIO ANALYSIS, AND WRITE A BRIEF REPORT STATING:

i. Company information: For each corporation, write a paragraph describing the business operations, risks and recent announcements. You will find this information in the annual report, financial and business news websites.

ii. Analysis (with sub sections for each ratio): A paragraph for each ratio that includes the ratio graph from Excel, a general explanation of each ratio and a discussion of the favorable and unfavorable results from your calculations.

iii. Recommendation: Which corporations do you recommend investing in and why? Would you consider purchasing stock or bonds? Are there any corporations that your group believes is too risky? Why? Make sure to support your recommendation by reiterating information from your analysis.


I HAVE ATTACHED THE RUBIC AND REQUIREMENTS HERE:

PURPOSE:This project is designed for you to use the general concepts presented in this course to analyze real companies and to use this analysis in making business decisions. This project will require you to utilize some standard business research resources and analysis techniques. It will also require you to draw on your organization, time management and group interaction skills.

A. Spreadsheets – using Microsoft Excel, you are to analyze your company using ratio analysis, comparing it to the other company’s in the group.

a. The Excel workbook will contain three worksheets.

i. The first worksheet will include the financial data needed for each corporation. You will find this information from the annual report’s financial statements. Please use the most recent fiscal year for the Company (please note that some companies operate on a separate fiscal year than others, this is ok. Just use the most recent available year).

ii. The second worksheet will be the required ratio calculations for each corporation.

iii. The third worksheet will be graphs of your choosing (bar, pie, etc.) for each required ratio.

For the ratios, you must use formulas and NEVER HARD CODE.

The ratios to be used include

i. Current ratio

ii. Profit Margin

iii. Price to Earnings (or Price/Earnings) Ratio

iv. Return on Equity

v. Return on Assets (total assets)

vi. Debt ratio.


a. The report should be prepared in good form and professional, using proper grammar, paragraph and sentence structure. b. The report must be typed and submitted using the ‘Microsoft Word’ word processing application. Use double spacing, max 12 inch font, 1-inch margins, and don’t forget to use spell check. c. Do not use personal pronouns (i.e. “I” or “me”) in the report, this is a technical business paper. d. Write in your own words, using any quotations sparingly. Provide references within the text, by author and date and page numbers, for any quoted material or any ideas that are not your own. e. At a minimum, your report should contain the following sectionsi. Company information: For each corporation, write a paragraph describing the business operations, risks and recent announcements. You will find this information in the annual report, financial and business news websites.ii. Analysis (with sub sections for each ratio): A paragraph for each ratio that includes the ratio graph from Excel, a general explanation of each ratio and a discussion of the favorable and unfavorable results from your calculations.iii. Recommendation: Which corporations do you recommend investing in and why? Would you consider purchasing stock or bonds? Are there any corporations that your group believes is too risky? Why? Make sure to support your recommendation by reiterating information from your analysis.f. There is no page number limit, but remember, less is more. g. PROOFREAD!!!!!!!!!!!!!!!!!!!h. Refer to the report rubric for how this assignment will be graded.

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Explanation & Answer

Kindly, check the work and if there are adjustments that are required please inform me

Zoom Video Communications, Inc.
Statement of Operations
For the year ended January 31, 2020
Revenue
Cost of revenue
Gross profit
Operating expenses
Income from operations
Interest income
Earnings before taxes
Income taxes
Net Income

(in thousands)
$
622,658
(115,396)
$
507,262
(494,566)
$
12,696
13,666
$
26,362
(1,057)
$
25,305

Earnings per share

$

0.09

Zoom Video Communications, Inc.
Balance Sheet
As of January 31, 2020
(in thousands)
2020
$
1,095,522 $
194,323
$
1,289,845 $

Current Assets
Non-current assets
Total assets
Current liabilities
Long-term liabilities
Stockholders' equity
Total liabilities & stockholders' equity

$

$

Preferred Dividends
*Data obtained from https://finance.yahoo.com/quote/ZM?p=ZM

1

333,830 $
122,072
833,943
1,289,845 $

2019
276,719
77,846
354,565
152,341
34,892
167,332
354,565

Amazon.com, Inc. (AMZN)
Statement of Operations
For the year ended January 31, 2020
Revenue
Cost of revenue
Gross profit
Operating expenses
Income from operations
Interest Expense
Total Other Income/Expenses Net
Earnings before taxes
Income taxes
Earnings from Equity interest
Net Income

(in thousands)
$ 280,522,000
(205,768,000)
$ 74,754,000
(60,213,000)
$ 14,541,000
$
(768,000)
$
203,000
$ 13,976,000
(2,374,000)
(14,000)
$ 11,588,000

Earnings per share

$

6.47

Amazon.com, Inc. (AMZN)
Balance Sheet
As of January 31, 2020
2020
$ 85,985,000
135,253,000
$ 221,238,000

Current Assets
Non-current assets
Total assets
Current liabilities
Long-term liabilities
Stockholders' equity
Total liabilities & stockholders' equity

$

79,711,000
76,255,000
65,272,000
$ 221,238,000

Preferred Dividends
*Data obtained from https://finance.yahoo.com/quote/AMZN?p=AMZN

2

(in thousands)
2019
$ 96,334,000
128,914,000
$ 225,248,000
$

87,812,000
75,376,000
167,332
$ 163,355,332

3

Current ratio

Current Assets
Current Liabilities

Profit Margin

Net Income
Revenue
Share price

Price to Earnings (or Price/Earnings) Ratio
Earnings per share
Net Income
Average Stockholders' Equity

Return on Equity

Net Income
Average Total Assets

Return on Assets (total assets)

Total Liabilities
Total Assets

Debt ratio

i. Current ratio: The current ratio is a measure of a company's ability to meet its short
The higher the ratio value, the more liquid a firm is, meaning the company has enough cash or ab
to convert its current assets to cash in order to pay its current liabilities.

ii. Profit Margin: Companies want to retain as much of its sales revenue as possible. Thus, profit ma
is a great indicator for how well a company is managing its variable and fixed expenses.

iii. Price to Earnings (or Price/Earnings) Ratio: The price-to-earnings ratio, often referred to as the P
ratio, is an indication of how valuable a company's stock is. The higher the PE ratio, the more expen
the stock is to investors. Higher price-to-earnings can be a positive sign that a company is performin
well, but there are instances when the PE ratio reveals that a company's stock may be overpriced.

iv. Return on Equity: Public companies have an obligation to increase shareholder value. One of the
ways that investors can determine how well a company is utilize its invested capital and retained
earnings is return on equity, or ROE. Return on equity evaluates sales in terms of its equity, not
including preferred stock. Another application for ROE is valuing the company's stock. Higher ROE
typically is a positive sign for the company.

v. Return on Assets (total assets): Return on assets, or ROA, reveals how well a company utilizes it’
assets to generate sales.
vi. Debt ratio provides a measure of the leverage of a company. It represents proportion of assets in
relation to debts

4

Zoom
$
$

1,095,522
333,830

$
$

25,305
622,658

$

76.30

Amazon

3.28
4.06%

$
$

85,985,000
79,711,000

1.08

$ 11,588,000
$ 280,522,000
$

4.13%

1,789.00

$ 847.78
$

0.09

$
$

25,305
500,638

$
$

25,305
822,205

$
$

455,902
1,289,845

$ 276.51
$

6.47

5.05%

$
$

11,588,000
32,719,666

35.42%

3.08%

$ 11,588,000
$ 223,243,000

5.19%

0.35

$ 144,983,000
$ 221,238,000

0.66

lity to meet its short-term obligation.
he company has enough cash or ability
abilities.

venue as possible. Thus, profit margin
le and fixed expenses.

ngs ratio, often referred to as the PE
gher the PE ratio, the more expensive
e sign that a company is performing
any's stock may be overpriced.

ase shareholder value. One of the
s invested capital and retained
ales in terms of its equity, not
the company's stock. Higher ROE

ls how well a company utilizes it’s

represents proportion of assets in

5

Ratio
Current ratio

Zoom
Amazon
3.281676 1.078709

Profit Margin

Zoom
Amazon
0.04064 0.041309

Return on Equity

Zoom
Amazon
0.050546 0.35416

Return on Assets (total assets)

Zoom
Amazon
0.030777 0.051908

Debt ratio

Zoom
Amazon
0.353455 0.655326

Price to Earnings (or Price/Earnings) Ratio

Zoom
Amazon
847.7778 276.507

Percentage Current

25%

Zoom

Return on Equity ra
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
Zoom

Percentage Price
Earnings (or Price/Ea
Ratio

25%

Zoom

ercentage Current ratio

Profit Margin ratio
0.0414
0.0412
0.041
0.0408
0.0406

75%

0.0404
0.0402
Zoom

Zoom

Amazon

Return on Equity ratio

Amazon

Percentage Debt ratio

35%
65%

Zoom

Amazon

Percentage Price to
nings (or Price/Earnings)
Ratio

Amazon

Return on Assets (total
assets...


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