PDF Financial Management - Assignment Sample
Added on 2021-06-18
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Running head: FINANCIAL MANAGEMENTFinancial ManagementName of the Student:Name of the University:Author’s Note:
FINANCIAL MANAGEMENT1Executive SummaryThe main purpose of this assignment is to analyze the financial statement of Amazon.com andalso comment on the performance of the company. The assignment will also be including ratioanalysis of key financial ratios of the business. The assignment will also be including impact ofthe political environment on the business. In addition to this, the assignment will be consideringthe possibility of any merger or acquisitions which can be expected.
FINANCIAL MANAGEMENT2Table of ContentsFinancial Statement Analysis..........................................................................................................3Identification and Analysis of Key Financial Ratios.......................................................................4Success Factors of the Business......................................................................................................7Impact of Political Competitive Environment.................................................................................8Ethical Consideration in case of Insolvency....................................................................................9External Factors which affect Merger and Acquisition.................................................................10Recommendations..........................................................................................................................12Reference.......................................................................................................................................14
FINANCIAL MANAGEMENT3Financial Statement AnalysisAs per the case study which is provided for Amazon.com, the net sales of the companyhas increased from the figures of 1999. The net sales of the business in the year 2000 is shown as$ 2,761,983 which is much more than previous years figure $ 1,639,839. The sales has increasedfor the company as the company has taken necessary steps to re-design the business model of thebusiness. The gross profit of the company is shown as $ 655,777 which in comparison toprevious year was $ 290,645. There has been sufficient increase in the gross profit margin of thecompany which is a positive sign for the business. The operating expenses of the company whichis shown in the financial statements of the company for the year 2000 reveals that the companyhas incurred lot of expenses during the year. The operating expenses of the company is shown inthe profit and loss statement as $ 1,519,657 for the year 2000. This is one of the major causesdue to which the company has earned an operating loss of $ 1,106,677. The company hasincurred a loss of $ 1,411,273 for the year 2000 which is more than the loss which was incurredduring the previous year (Palepu, Healy and Peek 2013). The main reason for the increase in thelevel of losses of the company is due to the increased cost of operations of the business.The current assets of the company which shows the liquidity position of the business andis considered to very important for the business (Mathuva 2015). Even though the current assetsof the business have increased from previous year’s comparison, however the value of the totalassets have fallen from the previous year which is not a good sign for the business. In addition tothis, the financial statements of the company for the year 2000 shows that the level of totalcurrent liabilities have also increased. In order to overcome the losses of the business and to alsoimprove the profitability of the business the company had to take a series of loans from banks.This has resulted in increase in the overall borrowings of the company as per the annual reports
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