Financial Statement Analysis
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amazon_financial_analysis_v2.pptxAmazon Financial Analysis
Introduction
Pioneer of online retailing business
Business focus in Online retail, manufacture of electronic gadgets and provider of Cloud services
Operations across North America, South America, Europe and Asia regions
Current Market cap is 406.77B
Competitors by segment
Media : eBay, Netflix, Apple
Electronics & General Merchandise : Best Buy, Walmart, Sears
Cloud: Google, Microsoft
Amazon is a pioneer of online retailing who always take advantage of latest cutting edge technologies to be on the fore frontier in the industry.
They diverse into multiple areas like eCommerce, digital content (eBooks, music, movies and other television shows), cloud and electronics gadgets (eBook readers, digital assistants …etc.) manufacturing.
Their international presence make the company more sustainable in long run
Individual stakeholders & Mutual fund companies has major share in the company which indicates that quality share holders has faith in the company
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Share %
Share
Muntual fund holders Other institutions Individual stakeholders 0.3682 0.2773 0.1772
DuPont Analysis - ROE
Retail industry recorded ROE as 18%
The 2016 ROE has significant surge of (9.58% increase) from previous year, this indicates they did very well in getting returns on equity
Still they are under perform in compare with retail industry ROE 18%
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.145152897242034 0.0494093264248705 -0.0235271147556987 0.0305496710893076 -0.00489058875164587 0.162691762279232
DuPont Analysis
Retail industry bench marks:
Net Profit Margin 3.21%
Asset Turnover 2.11%
Equity multiplier contribute majority portion in ROE calculation which is not a good sign. The lower equity multiplier in DuPont ROE calculation is better
Net profit margin & Asset turnover ratios are below the Retail Industry bench marks
The higher equity multiplier indicates that they use more debt when they buy assets which is not a good sign
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.017 0.006 -0.003 0.004 -0.001 0.013 Asset Turnover
2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.0184 0.0179 0.0188 0.0205 0.0211 0.038 Equity Multiplier
2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.0453 0.0494 0.0462 0.0405 0.0363 0.0326
Asset Management Analysis
Asset Turnover
Industry benchmark is 2.21
The 2016 Asset Turnover ratio 1.84 is below the industry benchmark of 2.21
The ratio is declining (through small increase in 2016 compare to 2015) from 2011, this indicates they are not utilizing their assets efficiently
The online retail companies suppose to have higher Asset Turnover ratio as they have less assets compare to Brick and Motor stores
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 1.835813944069822 1.794619796732969 1.880081129045889 2.047803724179663 2.112738401950443 3.803861064957671
Return on Assets Analysis
Industry benchmark is 5.60%
They have significant growth of 3.42% in 2016 from 1.63% in 2015, it is getting increased over the period
The 3.42% is still underperform compare to 5.60% industry benchmark
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.0342317930025659 0.0162941912366596 -0.000568755160077057 0.0103339226574367 0.00162801412993396 0.0275338238784714
Debt to Equity Ratio Analysis
Industry bench mark is 0.10
Debt to equity ratio is well above the industry bench of .10 which is why it contributes majorly in DuPont analysis
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.398962924552761 0.615286909742976 0.7694814263104 0.327416375949107 0.37646484375 0.0328735335825706
Liquid Ratio Analysis
Cash Ratio Analysis
2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.441254336315501 0.468911381945879 0.518245576560219 0.376762402088773 0.425428902220819 0.353719119226638
Current Ratio Analysis
Industry benchmark is 1.12%
It is still below the industry benchmark of 1.12%
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 1.044846631367537 1.05364889190545 1.11527644273559 1.071583986074848 1.120724134301653 1.174140708915145
Quick Ratio Analysis
Industry benchmark is 0.32
This ratio is well above the industry bench mark of 0.32
It is still below the past 3 years (2014, 2012 and 2011) and little above to 2015
This means company has 78 cents for every dollar of company’s current liabilities
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.783275515793318 0.751379585091628 0.819822706397522 0.749086161879895 0.803336490895695 0.839017185821697
Profitability Ratio Analysis
Net Margin Analysis
Industry bench mark is 3.21%
The latest Net Margin has significant growth from previous year (2015) which is indicates that the company is doing well in generating profits
This is the highest growth from past 5 years
The profit margin is still below industry benchmark of 3.21%
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.0174354901571474 0.0055697811337682 -0.00270823032318964 0.00368022349970451 -0.000638371008135138 0.0131247790003536
Gross Profit Margin Analysis
Industry bench mark is 22.75%
The current Gross profit margin is well above the industry bench of 22.75%
There is a continuous growth from past 5 years which means that they are very good in sales
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.350930603660644 0.33040203353083 0.294826268710388 0.272269381615 0.247524266282553 0.224410840942654
Operating Margin Ratio Analysis
Industry bench mark is 5.09%
Operational margin has significant growth form past 5 years which means that the company is getting better in managing their operations
It is still below the industry bench mark of 5.09%
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 0.0307823541956216 0.0208679887109134 0.0020002696992853 0.0100064471068608 0.0110650974743424 0.0179295713126859
Market Value Ratio Analysis
Price Earning (P/E) Ratio Analysis
Price earning ratio is significantly lower than previous year of 2015
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2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 148.2099957823703 534.134546979866 -565.3898340248963 635.7317518248176 -2825.858974358974 120.3983359746434
Market to Book Value Ratio Analysis
2016.0 2015.0 2014.0 2013.0 2012.0 2011.0 18.22172154524242 23.78542961745367 12.68587189274741 17.87302483069977 13.45318603515625 9.793908727600874
Industry Analysis
Net Profit Margin Gross Profit Operating Margin ROE Asset Turnover ROA Dept-To-Equity Current Ratio Quick Ratio 0.0174354901571474 0.3509 0.0308 0.1452 0.0184 0.0342 0.4 0.0104 0.78 Industry Net Profit Margin Gross Profit Operating Margin ROE Asset Turnover ROA Dept-To-Equity Current Ratio Quick Ratio 0.0221 0.2775 0.0509 0.18 0.0221 0.056 0.1 0.056 0.32
References
Amazon.com Inc. (AMZN) | Total Asset Turnover since 2005. (n.d.). Retrieved March 12, 2017, from https://www.stock-analysis-on.net/NASDAQ/Company/Amazoncom-Inc/Long-Term-Trends/Total-Asset-Turnover
Asset Turnover Ratio Screening. (n.d.). Retrieved March 12, 2017, from http://csimarket.com/screening/index.php?s=at
Staff, I. (2015, July 06). Earnings Per Share - EPS. Retrieved March 12, 2017, from http://www.investopedia.com/terms/e/eps.asp
AMZN Key Statistics | Amazon.com, Inc. Stock - Yahoo Finance. (n.d.). Retrieved March 12, 2017, from https://finance.yahoo.com/quote/AMZN/key-statistics?p=AMZN
