Amazon Financial Ratio Analysis Essay Sample free essay sample

The chief intent of research is to cut down the hazard degree of a determination. The research procedure involves six determination phases. The first phase of research procedure is to find and clear up the research inquiry. The undertaking before us was – to place a publicly-traded company that is a leader in its industry. The research inquiries formed were – what industry to take? Is at that place a clear market leader in that industry? Are at that place plenty publically traded companies in that industry? Is the marker leader a publically traded company for minimal 5 old ages? Are the last 5 years’ fiscal statements of the company available in public sphere? The 2nd phase of the research procedure is making a research proposal. In this phase budget is allocated to the research undertaking. We will write a custom essay sample on Amazon Financial Ratio Analysis Essay Sample or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Our research was allocated little sum of budget and clip. So. research needed to be concluded fast. The 3rd phase is planing the research undertaking. In this phase. a design for carry throughing research aims and replying research inquiries within allocated resources is prepared. ( Cooper A ; Schindler. 2011. p. 87 ) . In our research. the industries considered for research were: Car. Computer and accoutrements. Soft drink. Sports and dresss. e-commerce. retail. package. banking and finance. These industries were chosen because there are few really large planetary participants in these industries for whom equal sum of information is available in public sphere. It makes the undertaking of informations aggregation easy. In this phase. a pilot trial is used to observe failing in design and informations aggregation procedure ( Cooper A ; Schindler. 2011. p. 89 ) . The 4th phase is data aggregation and readying. For each of the selected industries. top 5 companies were listed down for each of the last 5 old ages. Each company was marked as publically listed/ non listed. If the company is listed. find whether company is listed in USA or non. The end is to place the market leader in each industry who has been listed for minimal 5 old ages in USA and has systematically dominated the market in several industries. The 5th phase is data analysis and reading ( Cooper A ; Schindler. 2011. p. 90 ) . The information collected in phase four was analyzed and summarized in this phase. The concluding phase of research procedure is to describe the consequence. The study besides includes an executive sum-up of the job. methodological analysis used. findings. and recommendations. The recommended industry was â€Å"e-commerce† . In e-commerce industry. Amazon. com has been a market leader for several old ages. Amazon. com is a $ 57. 26 billion company. Due to its larger size. competitory industry. unchallenged market leading. handiness of informations in public sphere. and naming on NASDAQ. Amazon. com is recommended for farther research. Ratio Analysis: Amazon. com Inc is market leader in e-commerce industry. The ratio analysis helps in understanding fiscal wellness and fiscal public presentation of a company. compare the fiscal public presentation of a company with equals and industry norm. every bit good as with past public presentation. and place tendencies. The liquidness ratios tell about the liquidness place of a company. The current ratio and speedy ratio are two of import liquidness ratios. Current ratio of Amazon. com has come down from 1. 39 in 2007 to 1. 17 in 2011. Quick ratio has besides declined from 1. 07 in 2007 to 0. 84 in 2011. The current ratio of Amazon. com is less than the industry norm. but speedy ratio is better than industry norm. It shows that company has good hard currency place and company is able to pull off current assets more expeditiously. The debt direction ratios give an penetration in capital construction of the house. The entire debt ratio has improved in last 5 old ages. The entire debt ratio is much lower than the industry norm. The debt to equity ratio of Amazon has come down drastically from 1. 07 in 2007 to 0. 18 in 2011. However. D/E ratio has increased somewhat in 2011. The D/E ratio of Amazon is somewhat higher than industry norm of 0. 12 ( MSN Money. 2013 ) . The cost of debt is lower than the cost of equity. So. adding some debt in capital construction has really helped Amazon to take down its cost of capital. The plus direction ratios tell about the efficiency of a house. The stock list turnover of Amazon. com has declined from 12. 36 in 2007 to 9. 63 in 2011. which is a cause of concern. The stock list turnover ratio of Amazon has been on diminution in last 5 old ages. but it is still higher than the industry norm. The plus turnover of Amazon has besides declined systematically and now it is merely somewhat higher than the industry norm. The diminution in plus turnover indicates that the plus use of Amazon has come down. which is a cause for concern. The profitableness ratios tell about profitableness of a house. The net income border of Amazon has declined from 3. 21 % in 2007 to 1. 31 % in 2011 and it is much lower than the industry norm of 10. 48 % ( MSN Money. 2013 ) . The return on plus and return on equity has besides declined systematically in last five twelvemonth and it is lower than the industry norm. The worsening tendency in profitableness ratios is a cause of concern for Amazon. com. The P/E ratio tells how much investors are willing to pay for a company. The P/E ratio of Amazon has improved in last 4 old ages. ( though it is lower than what it was in 2007 ) . The P/E ratio of Amazon is much higher than the industry norm. which shows that investors put more assurance in Amazon than its equals. Mentions Cooper. D. R. . A ; Schindler. P. S. ( 2011 ) . Business Research Methods. New York. New york: McGraw-Hill/Irwin. MSN Money ( 2013 ) . Retrieved from: hypertext transfer protocol: //investing. money. msn. com/investments/stock-price? symbol=amzn A ; ocid=qbeb