CURRENT ASSETS

Name of company chosen:

Refer to the notes to the financial statements. The first note, Summary of Significant Ac- counting Policies, provides information about the companys inventory costing and other ac- counting methods. You will also need to refer to the other notes to the financial statements and to the financial statements themselves in order to answer the following questions.

IMPORTANT: For each answer given, indicate the page number on which the information was found.

THE BASICS

1. Accounts Receivable

1. What is the amount of the companys accounts receivable? Page

Before subtracting the allowance for doubtful accounts (gross accounts receivable):

This year Last year

After subtracting the allowance for doubtful accounts (net accounts receivable):

This year Last year

2. What is the amount of the allowance for doubtful accounts? Page

This year Last year

What percentage of the gross accounts receivables are considered bad debts?

The credit risk ratio: Allowance for doubtful accounts

Gross accounts receivable

This year Last year

1. Inventories and Cost of Goods Sold

1. What is the amount of inventory? Page

This year Last year

2. What is the amount of cost of goods sold? Page

This year

Last year

2 years ago

3. What inventory costing method has the company chosen? Page

4. What other information does the company provide in the note about

its inventory? Page

Analysis of Current Assets

2. Calculate the following ratios: Show your computations.

1. Receivables turnover = Sales = =

Average net receivables

2. Average collection period = 365 = =

Turnover

3. Inventory turnover = Cost of goods sold = =

Average inventory

4. Average days inventories held = 365 = =

Turnover

3. Explain what information each of these ratios provides.

(a)

(b)

AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31, 2019 2020 36,092 $ 18,929 20,497 20,816 96,334 72,705 25,141 14,754 16,314 225,248 S 42,122 42,274 23,795 24,542 132,733 113,114 37,553 15,017 22,778 321,195 ASSETS Current assets: Cash and cash equivalents S Marketable securities Inventories Accounts receivable, net and other Total current assets Property and equipment, net Operating leases Goodwill Other assets Total assets S LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable S Accrued expenses and other Unearned revenue Total current liabilities Long-term lease liabilities Long-term debt Other long-term liabilities Commitments and contingencies (Note 7) Stockholders' equity: Preferred stock, $0.01 par value: Authorized shares 500 Issued and outstanding shares none Common stock, $0.01 par value: Authorized shares - 5,000 Issued shares 521 and 527 Outstanding shares - 498 and 503 Treasury stock, at cost Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Total stockholders' cquity Total liabilities and stockholders' equity See accompanying notes to consolidated financial statements. 47,183 $ 32,439 8,190 87,812 39,791 23,414 12,171 72,539 44,138 9,708 126,385 52,573 31,816 17,017 5 5 (1,837) 33,658 (986) 31,220 62,060 225,248 S (1,837) 42,865 (180) 52,551 93,404 321,195 AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2019 2018 2020 Net income $ 10,073 S 11,588 $ 21,331 Other comprehensive income (loss): Net change in foreign currency translation adjustments: Foreign currency translation adjustments, net of tax of $6, $(5), and $(36) (538) 78 561 Reclassification adjustment for foreign currency translation included in "Other operating expense (income), net, net of tax of $0, $29, and $0 (108) (30) 561 83 273 Net foreign currency translation adjustments (538) Net change in unrealized gains (losses) on available-for-sale debt securities: Unrealized gains (losses), net of tax of $0, $(12), and $(83) (17) Reclassification adjustment for losses (gains) included in "Other income (expense), net," net of tax of $0, so, and $8 8 Net unrealized gains (losses) on available-for-sale debt securities (9) Total other comprehensive income (loss) (547) Comprehensive income $ 9,526 S See accompanying notes to consolidated financial statements. (4) (28) 79 245 806 49 11,637 $ 22,137 AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Year Ended December 31, 2019 2018 2020 $ 141,915 $ 90,972 232,887 160,408 $ 120,114 280,522 215,915 170,149 386,064 165,536 40,232 35,931 18,878 5,203 201 Net product sales Net service sales Total net sales Operating expenses: Cost of sales Fulfillment Technology and content Marketing General and administrative Other operating expense (income), net Total operating expenses Operating income Interest income Interest expense Other income (expense), net Total non-operating income (expense) Income before income taxes Provision for income taxes Equity-method investment activity, net of tax Net income Basic earnings per share Diluted earnings per share Weighted average shares used in computation of earnings per share: Basic Diluted 139,156 34,027 28,837 13,814 4,336 296 220,466 12,421 440 (1,417) (183) (1,160) 11,261 (1,197) 9 10,073 $ 20.68 $ 265,981 14,541 832 (1,600) 203 233,307 58,517 42,740 22,008 6,668 (75) 363,165 22,899 555 (1,647) 2,371 1,279 24,178 (2,863) 16 21,331 42.64 (565) 13,976 (2,374) (14) 11,588 $ 23.46 $ 23.01$ $ $ $ 20.14 $ 41.83 487 494 500 510 500 504 See accompanying notes to consolidated financial statements. 2020 36,410 21,331 25,251 9,208 (71) (2,582) (554) AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2018 2019 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 21,856 $ 32,173 $ OPERATING ACTIVITIES: Net income 10,073 11,588 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other 15,341 21,789 Stock-based compensation 5,418 6,864 Other operating expense (income), net 274 164 Other expense (income), net 219 (249) Deferred income taxes 441 796 Changes in operating assets and liabilities: Inventories (1,314) (3.278) Accounts receivable, net and other (4,615) (7.681) Accounts payable 3,261 8,193 Accrued expenses and other 472 (1,383) Uneamed revenue 1,151 1,711 Net cash provided by (used in) operating activities 30,723 38,514 INVESTING ACTIVITIES: Purchases of property and equipment (13,427) (16,861) Proceeds from property and equipment sales and incentives 2,104 4,172 Acquisitions, net of cash acquired, and other (2,186) (2,461) Sales and maturities of marketable securities 8,240 22,681 Purchases of marketable securities 17,100) (31,812) Net cash provided by (used in) investing activities (12,369) (24,281) FINANCING ACTIVITIES: Proceeds from short-term debt, and other 886 1,402 Repayments of short-term debt, and other (813) (1,518) Proceeds from long-term debt 182 871 Repayments of long-term debt (155) (1,166) Principal repayments of finance leases (7,449) (9,628) Principal repayments of financing obligations (27) Net cash provided by (used in) financing activities (7,686) (10,066) Foreign currency effect on cash, cash equivalents, and restricted cash (351) 70 Net increase (decrease) in cash, cash equivalents, and restricted cash 10,317 4,237 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD s 32,173 S 36.410 See accompanying notes to consolidated financial statements. (2,849) (8,169) 17,480 5,754 1,265 66,064 (40,140) 5,096 (2,325) 50,237 (72,479) (59,611) 6,796 (6,177) 10,525 (1,553) (10,642) (53) (1,104) 5,967 42,377 38