AMAZON’S FINANCIAL REPORTS 5
Running head: AMAZON’S FINANCIAL REPORTS 1
Amazon’s Financial Reports
Student’s Name
Institutional Affiliation
Amazon’s Financial Reports
Company History
Amazon company is a publicly traded entity that focuses on e-commerce amongst other innovative business approaches such as cloud computing. Jeff Bezos formed in the company in the year 1994 based on his concept of an online bookstore (Rossman, 2017). Amazon would later make significant strides in the diversification process by expanding the company’s portfolio offering into other businesses such as live video streaming, software development, general merchandise and in most recent times publishing and cable television services. The company would later attain incorporation in the year 1997 after going public. Since the year 1998 Amazon has been able to grow exponentially as an online retailer, a manufacturer of electronic books and a major online enterprise majoring in music, movies, and other assorted web-based services. Currently, Amazon is the most valuable publicly traded and provides the most significant e-commerce marketplace.
Amazon’s Auditors
Ernest & Young (EY) are the current auditors tasked with the responsibility of auditing Amazon Company’s financial reports. Ernest & Young is a global professional audit firm that also owns multiple subsidiaries (NASDAQ, 2017). The audit firm takes credit for providing auditing services for some of the most successful publicly traded companies including Google.
Amazon’s Stock Listing
Amazon announced the company’s listing as a public company in the year 1996 and was consequently listed into NASDAQ with an initial offering of $ 18 per share. To date, the company’s shares are still listed on the NASDAQ stock exchange market. The NASDAQ stock exchange is an American establishment with the second-largest stock exchange value internationally. In recent times, Amazon shares have also been listed and traded in the New York Trade Exchange market. The company’s shares are traded under the ticker AMZN.
Cash and Cash Equivalents
An assessment of Amazon’s Balance sheet in the last two financial periods reveals an observable rise in the company’s cash and cash equivalents. For instance, by the close of business in the period ended 31/12/2017, the company’s cash and cash equivalents amounted to $ 20, 522, 000. The cash and cash equivalents would, however, increase to $ 31, 750, 000 by the close of business in the period ended 31/12/2018.
Amazon’s Total Assets
An evaluation of Amazon’s Balance Sheet for the periods ending in December 2017 and December 2018 also indicate a growth in the overall assets accumulated by the company over time. The company’s total assets in the period ending 31/12/2017 stood at $ 60, 197, 000 (NASDAQ, 2017). The balance sheet for the period ended 31/12/2018, however, indicates an increase of up to $ 75, 101, 000 in the total value of assets.
The Two Largest Current Assets
An evaluation of Amazon’s balance sheet reveals that among the company’s current assets, the cash and cash equivalents were the largest in both periods. The other current assets include short-term receivables, net receivables, and inventory in that order.
Company’s Total Assets
The summation of current assets includes the addition of all the current assets and the long-term (fixed) assets. The assessment of the total assets across the two periods reveals that in the period ending 31/12/2018 Amazon had a total of $ 131, 310, 000 (NASDAQ, 2017). The consequent expansion trajectory in the year 2018 would lead to an increase in the total assets to $ 1623, 648, 000.
Amounts of Accounts Payable
An assessment of Amazon’s current liabilities in the periods ending December 2017 and December 2018 reveals that the overall value of total accounts payable increased between the two periods. The balance sheet indicates that the accounts payables for the period ending December 31, 2017, stood at $ 52, 786, 000, the accounts receivables would, however, rise to $ 61, 855, 000 by the close of business on 31/12/2018.
Companies Total Current Liabilities
The balance sheet report indicates an overall rise in the total current liabilities over the two periods. According to the report, the total current liabilities for the period ending 31/12/2017 was $ 57, 883, 000 while the current liabilities rose to a total of $ 68, 391, 000 by the close of business on 31/12/2018.
Total Liabilities and Stakeholders Equity
The balance sheet indicates an increase in the total liabilities and stakeholder equity. For instance, in the period ending 31/12/2017 Amazon’s total liabilities stood at $ 103, 601, 000 while the company’s total stakeholder’s equity was valued at $ 27, 709, 000 (NASDAQ, 2017). The value of total liabilities and the stockholder’s equity by the cross of business on 31/12/2018 was at $ 119, 099, 000 and $ 43, 549, 000.
Amazon’s Net Revenue
An evaluation of Amazon’s annual income statement indicates an exponential growth in the overall revenue. The income statement as at 31/12/2017 shows a total revenue stream of $ 177, 866, 000. Consequently, the revenue value would rise as at 31/12/2018 to a record high of $ 232, 887, 000 in the history of the company.
Basic Ratios
Current ratio 2017 =Current assets /current liabilities
60, 197, 000/57, 883, 000= 1.03
Current ratio 2018 =Current assets /current liabilities
75, 101, 000/68, 391, 000= 1.09
Quick ratio 2017 = current assets – current liabilities/ inventories
(60, 197, 000 – 57, 883, 000) /16, 047, 000 = 0. 14
Quick ratio 2018 = current assets – current liabilities/ inventories
75, 101, 000 – 68, 391, 000/ 17,174, 000 = 0.39
References
NASDAQ. (2018). AMZN Balance Sheet. Retrieved from https://www.nasdaq.com/symbol/amzn/financials?query=balance-sheet
Rossman, J. E. (2017). The Amazon Way: 14 Leadership Principles behind the World’s Most Disruptive Company. SDMIMD Journal of Management, 8(1), 95. doi:10.18311/sdmimd/2017/15723