Week 10: Assignment 3: Cryptocurrency Analysi
Company Analysis
Company Analysis |
||
|
|
|
|
|
|
Your Name:Bernardre Pressley
FIN534 Assignment 1
|
Company Analysis |
|
|
Industry: |
Retail; E-commerce |
|
Company 1: |
Amazon.com, Inc. |
|
Company 2: |
Walmart Inc. |
|
Company 3: |
Alibaba Group Holdings Limited |
|
Income Statement Information |
|
|
|
Total Revenue |
Company 1: |
443,298,000 |
|
|
Company 2: |
562,839,000 |
|
|
Company 3: |
769,278,000 |
|
Gross Profit |
Company 1: |
112,981,000 |
|
|
Company 2: |
141,278,000 |
|
|
Company 3: |
308,499,000 |
|
Net Income |
Company 1: |
29,438,000 |
|
|
Company 2: |
12,250,000 |
|
|
Company 3: |
148,113,000 |
|
EBITDA |
Company 1: |
64,839,000 |
|
|
Company 2: |
32,323,000 |
|
|
Company 3: |
171,372,000 |
|
Balance Sheet Information |
|
|
|
Total Assets |
Company 1: |
321,195,000 |
|
|
Company 2: |
252,496,000 |
|
|
Company 3: |
1,690,218,000 |
|
Total Liabilities |
Company 1: |
227,791,000 |
|
|
Company 2: |
164,965,000 |
|
|
Company 3: |
615,257,000 |
|
Total Stockholders’ Equity |
Company 1: |
93,404,000 |
|
|
Company 2: |
87,531,000 |
|
|
Company 3: |
1,074,961,000 |
|
Calculate the Following Ratios: |
|
Total Debt / |
Total Equity= |
Debt to Equity Ratio |
|
Debt to Equity Ratio (Total Debt/Total Equity) |
Company 1: |
84,389,000 |
93,404,000 |
0.903 |
|
|
Company 2: |
63,246,000 |
80,925,000 |
0.782 |
|
|
Company 3: |
181,439,000 |
937,470,000 |
0.192 |
|
Gross Margin (Gross Profits/Sales) |
Company 1: |
Gross Profits/ =112,981,000 |
Sales = 443,298,000 |
Gross Margin=25.49% |
|
|
Company 2: |
141,278,000 |
562,839,000 |
25.10% |
|
|
Company 3: |
308,499,000 |
769,278,000 |
40.10% |
|
Operating Margin (Operating Income/Sales) |
Company 1: |
Operating Income/ =29,634,000 |
Sales= 443,298,000 |
Operating Margin=40.10% |
|
|
Company 2: |
24,233,000 |
562,839,000 |
4.3 % |
|
|
Company 3: |
85,820,000 |
769,278,000 |
11.16% |
Finally, list three takeaways or an analysis of what you’ve learned about each company based on their financial data (at least one paragraph each):
Company 1 |
Amazon.com, Inc. has a high potential in generating revenue from sales. However, it has a very high expenditure which contributes to a significant amount of revenue going to meet the expenses.The company has a high debt in its capital structure leading to almost equal contribution between the equity stockholders and the creditors. From the relatively low gross margin, it is evident the company has not employed an effective pricing strategy on its products based on the cost of production.Based on the EBITDA reported in the income started, the company has a less effective strategy in reducing costs that can be controlled by the company. This is evident through the difference between the EBITDA and net income which shows the wider margin comes from the operational expenses of the company.
|
Company 2 |
Walmart has significant sales revenue based on the total revenue reported. There has been a growth in the sales revenue over the years as evident through the reported increase in sales from 2017. This is an indication of effective pricing strategy enhancing affordability of the products (Kim & Im, 2017).The expenses incurred in producing the products and services is very high leading to a very low gross margin and operating margin. The company has employed an efficient debt policy as evident through the relatively lower debt-to-equity ratio.The company has a lower operating margin shows the level of efficiency in which the company needs to operate on. Based on the margin, much of the revenue is spent on paying for the variable costs of production (Elly, 2018).
|
Company 3 |
The company has reported an increase in sales as evident through the consecutive increase in total revenue over the years. This has supported the expansion of assets over the years as evident in the three years of balance sheet reported.Based on the debt-to-equity ratio, it is evident that the company uses more of the equity that borrowed funds in financing projects and business processes. This has been reflected through the large tax amounts as there are less tax shields such as interests on debts. The company has a relatively moderate gross margin which is an indication of a significant amount of money left after paying for the variable costs. The company has employed effective strategies in controlling variable costs. This is an indication of efficiency in management (Kim & Im, 2017).
|
Your completed Assignment 1 Template is due by Sunday midnight of Week 5 and should be uploaded to Blackboard. Please reach out to your professor with any questions. Good luck.
Reference
Kim, J., & Im, C. (2017). Study on corporate social responsibility (CSR): Focus on tax avoidance and financial ratio analysis. Sustainability, 9(10), 1710.
Elly, D. (2018). Interpretation of Financial Statements (SEMIs).
Industry Outlook/Economic Analysis
Industry Outlook/Economic Analysis