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Amazon.com, Inc. Ratio Analysis Report
<Name>
University of Maryland Global Campus (UMGC)
FINC 330 Business Finance
Professor: <Name>
<Date>
, <Name> Amazon.com, Inc. Ratio Analysis Report
2
Introduction
The purpose of this report is to analyze Amazon’s annual financial statements from the
Securities and Exchange Commission. The years covered will be from 2021 to 2023, which will
be used to compute various ratios to get an overall picture of the health of the company. The
statements that have the information to be used will be Consolidated Operations, Cash Flows,
Retained Earnings, and Balance Sheet. These statements can provide insight into the overall
health of the company and be used as a guide toward the future success of the company
(Dahlquist, 2022, p. 165).
Operating Efficiency
Operating efficiency will be the first area to review how the accounts receivable, assets,
inventory, and sales are being managed to generate revenue. The ratios to be used are accounts
receivable turnover, days’ sales in inventory, inventory turnover, and total asset turnover
(Dahlquist, 2022, p. 167).
The accounts receivable turnover gives us an indication of how efficiently the company is
keeping up with the collections of credit sales (Dahlquist, 2022, p. 167). The accounts receivable
turnover ratio is 10.60 with an industry average of 22.26. The ratio has dropped over the last
couple of years from 15.10 in 2021 to 12.23 in 2022 (Amazon.com, Inc., 2023). This indicates
that the company is taking too long to collect the receivables (Dahlquist, 2022, p. 167).
The days of sales in inventory will tell how long it takes to sell everything within the
inventory (Dahlquist, 2022, p. 171). The days of sales in inventory are currently at 39.91, and the
average for the industry is 45 days. This has improved over the last couple of years from 43.48 in
2022, and 43.74 in 2021 (Amazon.com, Inc., 2023). Overall, this ratio shows an improvement in
the right direction (Dahlquist, 2022, p. 171).
Amazon.com, Inc. Ratio Analysis Report
<Name>
University of Maryland Global Campus (UMGC)
FINC 330 Business Finance
Professor: <Name>
<Date>
, <Name> Amazon.com, Inc. Ratio Analysis Report
2
Introduction
The purpose of this report is to analyze Amazon’s annual financial statements from the
Securities and Exchange Commission. The years covered will be from 2021 to 2023, which will
be used to compute various ratios to get an overall picture of the health of the company. The
statements that have the information to be used will be Consolidated Operations, Cash Flows,
Retained Earnings, and Balance Sheet. These statements can provide insight into the overall
health of the company and be used as a guide toward the future success of the company
(Dahlquist, 2022, p. 165).
Operating Efficiency
Operating efficiency will be the first area to review how the accounts receivable, assets,
inventory, and sales are being managed to generate revenue. The ratios to be used are accounts
receivable turnover, days’ sales in inventory, inventory turnover, and total asset turnover
(Dahlquist, 2022, p. 167).
The accounts receivable turnover gives us an indication of how efficiently the company is
keeping up with the collections of credit sales (Dahlquist, 2022, p. 167). The accounts receivable
turnover ratio is 10.60 with an industry average of 22.26. The ratio has dropped over the last
couple of years from 15.10 in 2021 to 12.23 in 2022 (Amazon.com, Inc., 2023). This indicates
that the company is taking too long to collect the receivables (Dahlquist, 2022, p. 167).
The days of sales in inventory will tell how long it takes to sell everything within the
inventory (Dahlquist, 2022, p. 171). The days of sales in inventory are currently at 39.91, and the
average for the industry is 45 days. This has improved over the last couple of years from 43.48 in
2022, and 43.74 in 2021 (Amazon.com, Inc., 2023). Overall, this ratio shows an improvement in
the right direction (Dahlquist, 2022, p. 171).
