comparison and analysis

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Business Finance

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Purpose of Assignment

The purpose of this assignment is to evaluate the inventory section of two companies using basic comparative analysis, and to interpret the data to gain insight about the company's inventory management.

Assignment Steps

Resources: Appendices D and E located in Financial Accounting: Tools for Business Decision Making

Note: While the data are not from the same year, inferences can be drawn regarding inventory management of the two companies.

Write a 1,050-word comparative analysis using the financial statements of Amazon.com, Inc. presented in Appendix D, and the financial statements for Wal-Mart Stores, Inc., presented in Appendix E, including the following:

  • Compute the 2014 values for Amazon.com and the 2015 values for Wal-Mart based on the information in the financial statements:
    • Inventory turnover (Use cost of sales and inventories)
    • Days of inventory
  • Conclusions concerning the management of the inventory can you draw from this data.

Show work on Excel® spreadsheet and submit with analysis.

Appendix "D"

https://phoenix.vitalsource.com/#/books/9781119228...

Appendix "E"

https://phoenix.vitalsource.com/books/978111922830...

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Explanation & Answer

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Comparative Analysis for Wal-Mart Inc. and Amazon
Name
Institutional Affiliation
Between 2013 and 2015, Walmart Inc. observed an increasing trend in revenues.
However, the company’s revenue dropped in 2016 to 482.13B from 485.65B in 2015. It then
rose to 485.14B in 2017. The pattern shows that the company was able to identify the cause of
the drop in its revenues. It, therefore, engaged in advertising and giving discounts. For instance,
it started offering free same day shipping to its customers which increased its revenue. On the
other side, Amazon. Com’s revenues have seen a rising trend over the four years. However, the
receipts for Walmart show that the company is more significant than Amazon Inc. The highest
for Walmart were 485.65B while those of Amazon Inc. were 135.99B. It could be due to the
nature of their products. Walmart is United States’ leading retailer with many stores across the
states.
Apparently, the two companies see the need for advertising expenses due to the nature of
competition. The costs over the four years observed a rising trend for t...


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