Financial Analysis Report: Amazon's Statement of Cash Flows

This report analyzes Amazon's statement of cash flows, examining the major sources and uses of cash across operating, investing, and financing activities. The analysis includes a comparison between net income and cash flow from operations, highlighting key differences and their causes. The report identifies Amazon's financial strengths, such as its ability to make timely lease payments, and financial weaknesses, including increased accounts receivable and reliance on debt. The financial health of Amazon is evaluated based on the cash flow statement, providing insights into the company's ability to meet its obligations and manage its finances effectively. The report references the 10-K filings from the SEC and other sources to support the analysis. The report concludes with a discussion of whether the company will experience continued success and challenges.

ACCOUNTING FINANCIAL ANALYSIS REPORT
NAME OF THE STUDENT
NAME OF THE UNIVERSITY
STUDENT ID

1. Major sources of cash
The cash flow of Amazon
Inc. is segregated under 3
activities – operating
activities, investing
activities and financing
activities. All the 3
sections reports the details
regarding the cash
generated from and cash
used for each of the
activities. Cash is
generated from various
activities like through
sales.

2. Major uses of cash
Cash are used by the
entity for carrying out its
day-to-day business
activities like making
payments to the creditor,
purchasing equipments
and property and
repaying the amount of
different obligations.
Payment is made from the
available cash balance of
the company that is
generated through
different operating
activities.

Difference between net income and cash from operation
Net income is the entity’s profit that is earned
over the period and the cash flow from the
operating activities is the cash going out or
coming into the day to day operations of the
entity. Net income is considered as the starting
point while computing the cash flow from the
operating activities.

Major differences are –
Net income and cash from operations are
different as in most of the cases time gap is
there among actual payments and
documented sales. Situation can be
controlled if the payment is made in cash by
the customers in next period. However, if the
payments are further postponed larger
difference will be there among net income
and cash from operating

4. Financial strength
Financial strengths those can be found out from
the cash flow statements are the principal
repayments of the capital lease obligation,
principal repayments of the financial lease
obligation and purchase of the property and
equipment. Principal repayments of capital
lease as well as financial lease show that the
company has sufficient cash to make timely
payments for its lease obligation.

5. Financial weaknesses
Financial weaknesses those can be found out
from the cash flow statements are proceeds
from the long term debt and other and
increase in the amount of accounts receivable.
Proceeds from the long term debt and other
signify that the entity raised additional fund
through borrowing. On the other hand,
increase is accounts receivable signifies that
the amount of credit sales is increased or the
entity was not able to collect the old
receivables on time.

Bibliography
Sec.gov. (2019). Retrieved 16 July 2019, from https://
www.sec.gov/Archives/edgar/data/1018724/000101872419000004/amzn-201
81231x10k.htm#sAC0FBE1D4F8A59A9BC0B4A81A52467C7
Ir.aboutamazon.com (2019). . Retrieved 16 July 2019, from https://
ir.aboutamazon.com/static-files/0f9e36b1-7e1e-4b52-be17-145dc9d8b5ec