Choose a U.S. public company that you are familiar with or one in which you may have an interest. You will now have the opportunity to apply some of the concepts reviewed in the prior modules to the f 1

AccountingName:Institutional Affiliation:Date:Ratio analysis using financial statements of a U.S. public companyI chose Amazon Inc. as my public company as its aggressive ways of marketing andselling is of interest to me. They have been around for close to 25 years now, in technologicaland computing, e-commerce as well as video-streaming services. As of 2018, they had anoperating income of US$12.421 billion and a net income of US$10.073 billion as of the sameyear, and the website from which I got the statement ishttps://www.macrotrends.net/stocks/charts/AMZN/amazon/financial-statements.Amazon has been eyeing new initiatives and markets, and it has caused a stir in itsspending, therefore disappointing in the past in terms of earnings. However, its successessupersede its failures in terms of operating losses. They are losing more than they expected.Though brought in close to $19.32 billion, they are missing on $15 million every quarter, innet income. Though there has been speculation that they might be reinvesting the money,comparing what goes back to the shareholders does not look good.Total assets include a company’s present and long-term assets in a balance sheet, andit is crucial in knowing how the assets are efficiently put to use. As per the table given, theirtotal assets as of 31stDecember 2018 was $162.64 billion which was a 23.9% increase fromthe year 2017.Statement of shareholder equity also called the statement of retained earnings is thetotal amount of equity at the beginning and the end of an accounting period by the businessowners. It shows the equity balance at the start of the period, what has been added orsubtracted to the balance and finally the ending balance. Amazon’s stakeholder’s equity wasat $43,549 million at the end of 2018, which was an increase from $27,709 million in 2017.Statement of cash flow is divided into three sections – cash from investing, financingand from operations. It provides insight on the company’s cash payments as well as cashreceipts during a specified period. The company’s financial position is then linked to the finalcash balance as compared to the beginning.Additionally, there is a difference in the cash flow and income statements. The cashflow statement is used to monitor the amount of money in a bank account for instance when acompany paid and received payment. The income statement is what tracks the company’sprofits. Though similar to the cash flow statement, it does not necessarily keep a record ofmoney going out or that which comes in, instead they use a time basis, like when theyoccurred. Amazon’s net cash flow is $10, 317 million which is an increase from 2017’s$1,992 million. As for the company’s income statement, 2018 saw them with $10.073 millionwhile in December 2017, they had $3,033 million.Moreover, there are other kinds of information related to financial statements. Profitmargin is the amount of revenue, in percentage, that a company keeps after all deductions aremade. Using both the current and historical data on the gross, net and operating margin overthe last ten years shows the profit margin at 4.33% in December 2018.Also, there is the price to earnings ratio which is gotten by dividing the closing priceby recent earnings per share numbers. The price to earnings ratio is used as a way to measurevalue and determines if a stock is over or undervalued. As of February 22nd, 2019, Amazon’sP/E ratio was at 81.05Works CitedBrigham, K., Eugene F. and Joel F. Houston (2001). Fundamentals of FinancialManagement. Harcourt College Publishers, Fort Worth,Graham, Y., John R. and Campbell R. Harvey. (2001). The Theory and Practice ofCorporate Finance: Evidence from the Field, Journal of Financial Economics.Amazon Financial Statement 2005 – 2018, retrieved fromhttps://www.macrotrends.net/stocks/charts/AMZN/amazon/financial-statements.