Understanding a company’s financial health is necessary for making informed business decisions. By examining financial statements and ratios and
Assignment Details
Understanding a company’s financial health is necessary for making informed business decisions. By examining financial statements and ratios and comparing a company’s performance to industry averages, one can understand how well an organization manages resources, controls costs, and generates profits. Analyzing financial data reveals a company’s strengths and weaknesses and highlights potential growth and improvement areas. It is also needed to support an organization’s long-term success.
For this assignment, you will conduct a financial analysis of the same company you selected for the Unit 2 Individual Project – AMAZON. This analysis will give you a better understanding of the company’s financial health and performance. Follow the steps below to complete this assignment. Locate and download the company’s two most recent annual reports. You will use these reports to find data for your financial analysis.
Finding the Annual Report
To find the company’s annual report, start by visiting the company's official Web site. Look for a section labeled "Investor Relations" or "Investors," often located at the bottom of the home page. In this section, you should find links to financial reports, including annual reports. The reports are typically organized by year and can be downloaded in PDF format.
Another option is to search the company’s name followed by "annual report" in a search engine. This often leads you directly to the report on their Web site. For U.S. public companies, you can also access annual reports (known as 10-K filings) through the U.S. Securities and Exchange Commission's EDGAR database at this page: Search Filings. This provides free access to official filings.
Financial Ratios
You can review the following articles to help you with selecting your financial ratios:
Now, follow the outline below and address the items in each section. Download the assignment template: Unit 3 IP Template
Company Overview: Provide a brief overview of 1–2 paragraphs of your chosen company. Include what it does, its main products or services, and any other relevant background information. This context will set the stage for your analysis.
- Financial Ratios: Select one financial ratio from each of the following categories for analysis:
- Liquidity ratios (such as current ratio or quick ratio)
- Leverage ratios (such as debt–equity ratio or debt ratio)
- Profitability ratios (such as gross margin or net profit margin)
After selecting your ratios, create a table that presents the chosen ratios for the company’s last 2 years. Your table should list the company name, the year, and the specific value of each ratio.
- Ratio Analysis: Write an analysis of these three ratios. Explain what each ratio measures and why it is significant in your analysis. Discuss how the company performed in each ratio over the past 2 years. Interpret what these results mean for its financial health.
- Income Statement Analysis: Conduct an income statement analysis by reviewing the income statements from the 2 most recent years of the annual reports. Focus on gross margin, operating margin, and net margin. Compare these margins to the industry average to determine whether the company is performing above or below the standard. Explain what these comparisons reveal about the company’s profitability and operational efficiency.
You can find industry information by reviewing the annual report, searching the Internet, and using Statista.
- Financial Health: Summarize the company’s overall financial condition. Use insights from your ratio analysis and income statement findings to assess its strengths, weaknesses, and potential areas for improvement. Make sure you provide at least one area for improvement and explain why.
Unit 3 Individual Project
Student Name
College of Business and Management, Colorado Technical University
MGMT498
Professor’s Name
Date
Unit 3 Individual Project
Introduce the topics you will cover in your paper. Use 12 pt. Times New Roman font, double space, and indent each paragraph throughout your assignment. Each paragraph should include a topic sentence, at least 2 qualifier sentences, and a transition, for a total of 4 sentences. Use APA in-text citations where your references are used. Do not change the document margins. The assignment should be 3–5 pages (not including the title page and reference page).
Company Overview
Write a brief overview of your chosen company. Describe what the company does, its main products or services, and any key information to provide context for your analysis.
Type your response here.
Financial Ratios Selection
Write an introductory sentence or two. Then, fill in the table below.
Type your response here.
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Ratio |
Enter Year |
Enter Year |
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Liquidity Ratio (Enter Ratio Name) |
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Leverage Ratio (Enter Ratio Name) |
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Profitability Ratio (Enter Ratio Name) |
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Source: Enter your source for the information |
Ratio Analysis
Write an analysis of the three selected ratios. Explain what each ratio measures and why it is important. Describe how your company performed in each ratio over the past 2 years. Discuss what the results mean for the company’s financial health. Make sure you have in-text citations.
Type your response here.
Income Statement Analysis
Review the income statement from the last 2 years in the annual reports. Focus on gross margin, operating margin, and net margin. Complete the table below.
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Enter Company Name Incomplete Statement Analysis |
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Margin Type |
Company Year |
Industry Year |
Company Year |
Industry Year |
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Gross Margin |
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Operating Margin |
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Net Margin |
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Source: Enter your source for the information |
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Write a comparison between your company’s margins with the industry average for these areas by addressing the following:
· Determine whether the company is performing better or worse than the industry average.
· Explain what these comparisons reveal about the company’s profitability and efficiency
Type your response here.
Financial Health Assessment
Summarize the company's overall financial condition, using findings from the ratio and income statement analyses. Assess the company’s strengths, weaknesses, and at least one area for improvement, with a clear explanation of why this area needs attention. Make sure you have in-text citations.
Type your response here.
Conclusion
Summarize the main points of your paper. Be sure to proofread your assignment for organization, grammar, punctuation, and APA style.
References
Cite sources alphabetically in APA format. The following are some examples of references cited in APA format:
Gliddon, D. G., & Rothwell, W. J. (2018). Innovation leadership. Routledge.
https://login.proxy.cecybrary.com/sso/skillport?context=137758
Khan, M. A., Ismail, F. B., Altaf, H., & Basheer, A. (2020). The interplay of leadership styles, innovative work behavior, organizational culture, and organizational citizenship behavior. Sage Open, 10(1), http://dx.doi.org.proxy.cecybrary.com/10.1177/2158244019898264
Kmec, J. (2012, March 13). Where’s the boss? And what counts as “work”? The Society Pages. https://thesocietypages.org/socimages/2012/03/13/wheres-the-boss-and-what-counts-as-work/
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