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Financial Analysis

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Running head: FINANCIAL ANALYSIS 1 Financial Analysis Name Institution Date FINANCIAL ANALYSIS 2 By considering the liquidity ratios, Facebook is more liquid than its main competitors. This is evident from the table below; Liquidity 2016 Budweiser Amazon Facebook Current ratio 1.07 1.04 11.97 Quick ratio 0.98 0.78 11.97 Cash ratio 0.21 0.44 3.10 This is because it has a high current ratio which indicate that it is capable of settling its short term debts, high quick ratio above 1 which shows that it has enough quick assets to cover its current bills as they are due and lastly it has cash ratio of 3.10 showing that the company could comfortably cater for its current obligations (Gibson, 2011). All these makes Facebook to be more liquid compared to its competitors in the industry. Facebook has the strongest net income. This can be seen from the table below; Budweiser Amazon 2,371,000 Facebook Net Income 1,241,000.00 10,188,000 Shareholder's equity ROE 71,339,000 19,285,000 59,194,000 1.74% 12.29% 17.21% Due to the strong net income, Facebook has the highest Return on Equity as compared to its competitors in the industry. FINANCIAL ANALYSIS 3 The solvency of a company is usually determined by the debt ratio, equity ratio and the equity ratio as below (Gibson, 2011); Solvency 2016 Budweiser Debt Equity ratio Amazon 2.48 Facebook 3.32 0.10 Debt ratio 0.68 0.77 0.09 Equity ratio 0.28 0.23 0.91 From the above table, Budweiser, A ...
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