During the third week of class, the students will prepare and submit a financial ratio analysis of a target company: Amazon.com. The deliverables for this project are an Excel spreadsheet showing all of the calculations, and a separate Word document in which the student writes a detailed analysis and interpretation of the calculated ratios. At a minimum, the calculated ratios should include those listed below. Analyze the 3 most recent fiscal years for this assignment. In your detailed analysis, comment on both the most recent year (current position) as well as the trend over time. Summarize the assignment by answering the following question, “What does this analysis tell you about the company and its financial ability?”
Requirements: The length of the word document should not exceed three pages, exclusive of cover page and exhibits. At a minimum, the calculated ratios should include those listed below. Analyze the 3 most recent fiscal years for this assignment. In your detailed analysis, comment on both the most recent year (current position) as well as the trend over time. Summarize the assignment by answering the following question, “What does this analysis tell you about the company and its financial ability?”
1. Liquidity
a. Quick ratio
b. Current ratio
2. Asset Management
a. Inventory Turnover Ratio
b. Days Sales Outstanding
c. Fixed Asset Turnover Ratio
d. Total Asset Turnover Ratio
3. Debt management
a. Total Debt to Total Capital
b. Total Debt to Total Assets
c. Debt to Equity Ratio
4. Profitability
a. Operating Margin
b. Profit Margin
c. Return on Total Assets (ROA)
d. Return on Common Equity (ROE)
e. Return on Invested Capital (ROIC)
5. Market Value
a. P/E Ratio
b. Market/Book Ratio
6. Dupont Formula (disaggregated ROE)
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