Name: Erika Tran
Course: BUS 485
Date: August 15th, 2021
Benchmark – Financial Analysis
I. Instroduction:
The company that today this article will refer to for financial analysis is Amazon. As is
known, Amazon is a multinational company specializing in e-commerce along with other
utilities such as AI research, cloud computing. This is a company that originated in the US
and has the second highest market capitalization in the world after Apple [ CITATION Rob00
\l 1066 ]. In this article, we will analyze common ratios of liquidity, profitability, and
leverage.
II. Ratios
First, let's talk about liquidity. Liquidity is reflected in the speed of payment and the
amount of cash the company owns and has the ability to use immediately. We also need to
use current payout ratios along with actual numbers for our review. Current ratio is calculated
using the income level formula divided by the current bank debt. Thus, we have the data that
Amazon's current ratio decreased in the years 2016, 2017 but improved positively around the
end of 2017 and in 2018. According to some reports, the current asset Amazon's current
reaches 96,334,000 and Current Liabilities is 87,812,000 according to 2019 data [ CITATION
Moh20 \l 1066 ]. The current ratio is 1.10 because we have the formula: 96,334,000 ÷
87,812,000. Then, let's look at the profitability ratio - demonstrating the
company's active competitiveness in the market. First, we talk about profit margins that have
increased continuously through 2016, 2017, 2018 to 2019. Even during the pandemic in
1
This study source was downloaded by 100000844555733 from CourseHero.com on 04-19-2022 01:27:27 GMT -05:00
https://www.coursehero.com/file/103680847/Benchmark-Financial-Analysisdocx/
Course: BUS 485
Date: August 15th, 2021
Benchmark – Financial Analysis
I. Instroduction:
The company that today this article will refer to for financial analysis is Amazon. As is
known, Amazon is a multinational company specializing in e-commerce along with other
utilities such as AI research, cloud computing. This is a company that originated in the US
and has the second highest market capitalization in the world after Apple [ CITATION Rob00
\l 1066 ]. In this article, we will analyze common ratios of liquidity, profitability, and
leverage.
II. Ratios
First, let's talk about liquidity. Liquidity is reflected in the speed of payment and the
amount of cash the company owns and has the ability to use immediately. We also need to
use current payout ratios along with actual numbers for our review. Current ratio is calculated
using the income level formula divided by the current bank debt. Thus, we have the data that
Amazon's current ratio decreased in the years 2016, 2017 but improved positively around the
end of 2017 and in 2018. According to some reports, the current asset Amazon's current
reaches 96,334,000 and Current Liabilities is 87,812,000 according to 2019 data [ CITATION
Moh20 \l 1066 ]. The current ratio is 1.10 because we have the formula: 96,334,000 ÷
87,812,000. Then, let's look at the profitability ratio - demonstrating the
company's active competitiveness in the market. First, we talk about profit margins that have
increased continuously through 2016, 2017, 2018 to 2019. Even during the pandemic in
1
This study source was downloaded by 100000844555733 from CourseHero.com on 04-19-2022 01:27:27 GMT -05:00
https://www.coursehero.com/file/103680847/Benchmark-Financial-Analysisdocx/
