In 2014 the net cash flow for investment activities showed an outflow of $5065 million and outflow has increased in 2015 to $6450 million and $9876 million in 2016. Investment activities have continuously shown negative cash expenditures for Amazon as they continue to expand and grow the company. The total net operating income is largely influenced by the company’s net income. Since the year 2012, the company’s cash flows have increased significantly and in the year 2015, Amazon increases the cash flows by $6842 million.
Cash FlowsĬash flows are essential in financial statement analysis because it holds key accounting information such as cash receipts, expenditure among others. It recorded a 23.64 overall performance compared to the overall industry performance of 28.78. Overall, the company slightly underperformed. This means that every investor needed to pay a total of 7.56% per share to every amount that the company earned. Amazon recorded Price Per Index (PPI) ratio of about 7.56. The positive turn over implies that the company is at its best in asset management. Amazon had a total turnover ratio of 1.73 compared to the industry’s average of 1.12. One of the benefits of the low Inventory turnover is being the chance of possible gain in sales in the coming future. The low inventory turnover implies that Amazon has a moderately high turnover. Amazon recorded an inventory turnover of 17.78 during the ending of the financial year 31 st December 2015. The industry average benchmark for inventory turnover is 25.22. Moreover, Amazon assets increased value by 49.4% as one dollar worth of assets generated 0.494 cents.ĭuring the analysis of the company’s asset management, it is discovered that the methods used were relatively efficient. ROE and ROA recorded a 0.96 and 4.95 respectively which means that the growth of the shareholders increased by a double digit. The industry average is 0.82, which the company has failed to beat.īased on the Return on Equity (ROE) and Return On Assets (ROA), the company’s profits are much better.
In addition, the quick ratio of 0.77 implies a negative inference to the company, because it has to counter the short-term financial obligations by using the liquid assets. Amazon slightly underperformed due to the industry average of 1.26. The current ratio of 1.076 of Amazon implies that the company is able to take off its current liabilities because it poses reasonable current assets. The company’s financial statements and analysis for the year ending 31 st December 2015 are somehow satisfactory.
The source of financing for the two financial years are common stock and long-term debt which both share the equal percentage of 50%. It is estimated that the company’s revenue will increase $121 and $131 billion for the years 20 respectively. It was assumed that the total dividends was 60% of the total income, sales grew proportionally with the account payables, that there was a 10% increase in the cost of goods sold (COGS) and sales and that Amazon is fully operational and that there is a proportional growth to all of its assets. For Amazon, Income statement and Balance sheet were generated using the percentage of Sales criteria.
#Amazon 2017 financial statements pro#
The two statements under the Pro Forma statements are the balance sheet and the income statement. This research paper will aim in analyzing Amazon financial statements, discuss its decision making based on its financial, and draw the conclusion about the company’s potential to continue as a going concern and maintain its market position. Amazon also focuses on maintaining competitive cost price of the profit margins and also the dividends paid to the shareholders. It provided a platform where various independent individuals can list their products and sell them at a discounted price (Greenspan, 2017).Īmazon is aimed at increasing its revenues and market share as a long-term measure and also making sure the shareholders are paid dividends. Amazon started as a humble beginning in 1994 with Jeff Bezos as the CEO. Among the products available include electronics, kitchenware, clothing and motor vehicles. Amazon has proven to be the leading online platform where customers can be able to purchase products at a very fair price. Amazon Company is one of the leading online retail companies in the world.