University Finance Module: Amazon.com Inc. Financial Statement Review

This report provides a detailed financial statement review of Amazon.com Inc., focusing on its 2018 annual report. The analysis assesses the company's financial health, highlighting its strong financial base with a current ratio of 1.10 and increased net profit compared to the previous year, despite lower financial ratios compared to industry averages. The report identifies key risks, including interest rate risk, foreign exchange risk, and investment risk. It also explores the company's significant opportunities, particularly in the expanding online retail market and the growth of its cloud computing and AI-driven businesses. The report concludes that Amazon exhibits a robust financial position with considerable growth potential. The financial statement review uses information from the annual report, and the SEC filing to support the analysis. The report is a valuable resource for students studying finance and business.

Running head: AMAZON.COM INC – FINANCIAL STATEMENT REVIEW
AMAZON.COM INC – FINANCIAL STATEMENT REVIEW
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1AMAZON.COM INC – FINANCIAL STATEMENT REVIEW
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Amazon.com Inc....................................................................................................................2
Financial Health.....................................................................................................................3
Biggest Risk...........................................................................................................................3
Biggest Opportunities.............................................................................................................4
Conclusion..................................................................................................................................4
References..................................................................................................................................5

2AMAZON.COM INC – FINANCIAL STATEMENT REVIEW
Introduction
The objective of the paper is to review the financial statement of Amazon.com Inc.
this report consider the annual report of 2018 of the firm to perform the review of the
financial statement of the Amazon.com Inc. The reason to review the financial statement of
the firm is to assess the financial health of the firm and to ascertain the biggest risk and
opportunities of the firm.
Discussion
Amazon.com Inc.
Amazon.com Inc., is an America based multinational online retail company. The head
office of the firm is situated in Washington. The main business of the company includes e –
commerce, digital streaming, cloud computing and artificial intelligence (Amazon 2019).
This one of the four biggest companies of world. In this report the financial statement of 2018
which is published by the firm in the Form K – 10 is taken into consideration (Sec.gov 2019).
The following link is for the stated statement: -
https://www.sec.gov/Archives/edgar/data/1018724/000101872419000004/amzn-
20181231x10k.htm

3AMAZON.COM INC – FINANCIAL STATEMENT REVIEW
Financial Health
Amazon.com Inc. is one of the four top IT based company of the world along with the
Apple, Google and Facebook. The financial report of the company for the year 2018 shows
that the company have the strong financial base that the firm have the current ratio of 1.10 as
well as the net profit of the firm also increased in 2018 compare to 2017. Although, the firm
have the low financial ratios compare to the last 5 years of the industry’s average ratios but
the firm reported the tremendous growth in its financial performance.
Biggest Risk
The financial report of Amazon.com shows mainly three big risk associated with the
firm. Those are Interest Rate Risk, Foreign Exchange Risk and Investment Risk
(Annualreports.com 2019). There reason behind the foreign exchange risk is that the
company operates in various countries. Investment risk is associated with it because it is a
private limited company in which the availability of the data is low as well as the market of
the company is highly volatile. The firm also have the interest rate risk due to the high long
term debt and fluctuating interest rates.

4AMAZON.COM INC – FINANCIAL STATEMENT REVIEW
Biggest Opportunities
The firm has the several opportunities as the maximum retail market is moving
towards the online market in which Amazon.com operates. The internet revolution also
increases the customer base of the firm and the firm also always be attentive to grab this
opportunity. The entire world is the market for the firm as this operates globally. Apart from
that the other business of the firm also have a good growth opportunity as they all are based
on the internet and AI and the user of this is rapidly increasing every day.
Conclusion
The paper concludes that the financial position as well as performance of the firm is
strong as per the financial report of 2018. The biggest risk of the firm is Interest rate Risk,
Investment Risk and Foreign Exchange Risk. While, the firm has the various growth
opportunity in the future.

5AMAZON.COM INC – FINANCIAL STATEMENT REVIEW
References
Amazon 2019. About Amazon. [online] US About Amazon. Available at:
https://www.aboutamazon.com/ [Accessed 23 Aug. 2019].
Annualreports.com 2019. Amazon.com Inc. - AnnualReports.com. [online]
Annualreports.com. Available at: http://www.annualreports.com/Company/amazoncom-inc
[Accessed 23 Aug. 2019].
Sec.gov 2019. Document. [online] Sec.gov. Available at:
https://www.sec.gov/Archives/edgar/data/1018724/000101872419000004/amzn-
20181231x10k.htm [Accessed 23 Aug. 2019].