Amazon Financial Statement Analysis

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Javaid Iqbal Majid

Michael Bluemel

Tuesday, November 29, 2016

Amazon Financial Statement Analysis

While Amazons ability to sell merchandise inventory is greater than the industry average,
Amazons ability to pay current liabilities and long term debt, its profitability and its stock
market value show that Amazon is not in a very good position.

Ability to pay current liabilities

Amazons ability to pay its current liabilities is 27.2% lower than the industry average and year
over year, from 2011 to 2012 it has declined by 4.55%.

Ability to sell merchandise inventory and collect receivables

Amazons ability to sell its merchandise is 81.33% greater than the industry average, however,
year over year, from 2011 to 2012, it has declined by 4.37%.

Amazons inventory is held by the company 44.4% less time than the industry, however, year
over year, from 2011 to 2012 Amazon has held its inventory nearly 2 days longer or a 4.57%
jump.

Amazons gross profit is below the industry average by 28.46%, however, year over year, from
2011 to 2012, Amazons gross profit percentage has increased by 9.09%.

Amazons ability to collect on receivables is better than the industry average at 50.98%,
however, year over year, from 2011 to 2012, Amazons ability to collect has declined by
12.03%.

Ability to pay long term debt

As of 2012, Amazon had 75% of its assets financed with debt which is 120.59% greater than
the industry average. In addition, year over year, they have 8.7% more debt than in 2011.

Amazons ability to pay interest is slightly below the industry average by 1.88%, however in
2011, it was 184.8% greater in the industry average.

Profitability
Amazons profit margin has declined from 2011 to 2012 by 104.58%.

Amazons ability to use its assets to generate sales has decreased by 8.79% from 2011 to
2012, however, its ability to do so is 400% greater than the industry average.

Amazons average common stockholders equity has declined year over year from 2011 to
2012 by 105.68% and is 104.3% lower than the industry average.

Evaluating stock as and investment

Amazons stock market value has declined by an astounding 2,273.02% from 2011 to 2012
and is 6,151.94% lower than the industry average.

It appears that me leaving on a mission in late 2011 caused a major decline in profitability. In
order for a correction, the company needs me to return (whether thats because of my overspending or my ability to help the company pay debts and be profitable, I will not specify).