Question
Overview: Liquidity Ratios This week we evaluate the companys liquidity and asset utilization ratios and compare them to the industry average. On liquidity ratios, lenders,
Overview: Liquidity Ratios
This week we evaluate the companys liquidity and asset utilization ratios and compare them to the industry average. On liquidity ratios, lenders, creditors, and suppliers find liquidity ratios quite useful in deciding whether or not to grant credit. On the asset utilization ratios, this category of ratios evaluates how effectively the company is using its investment in assets to generate sales. Be sure to review the Financial Ratios Guidelines document in the Week 5 Content area that will guide Discussions 5-8.
If you wish to change companies, go to the discussion thread for Discussion 1 to reserve your new company making sure no one else has already reserved it. If you decide to stay with the same company you used for Discussion 1, there is no need to re-reserve it.
Your task is to prepare a report with the required information provided below. Use the same heading names (in bold) before presenting the information as requested.
Report Headings
Name of Company and Ticker Symbol: Company name, ticker symbol
10-K Report: Paste the direct URL to the companys most recent 10-K Report
Company Website: Paste the URL to the companys website
Industry name and NAICS Code: Provide the name and NAICS code associated with the Industry Average data. (1 point)
Liquidity Ratios: Follow the formatting in the example below to present the data. See the sample eStatement Studies document posted under the Activities tab for help in finding the industry average data needed for this assignment.
| 20XX | 20XX | 20XX | Industry Average* | |
| Current Ratio (CA/CL) | -- | -- | -- | -- |
| -- | ||||
| -- | ||||
| Quick Ratio [(CA-Inventory)/CL] | -- | -- | -- | -- |
| -- | ||||
| -- |
* list all 3 industry average figures for each ratio
Asset Utilization Ratios: Follow the formatting in the example below to present the data. See this sample eStatement Studies document for help in finding the industry average data needed for this assignment.
| 20XX | 20XX | 20XX | Industry Average** | |
| Inventory Turnover (CGS*/Inv.) ) | -- | -- | -- | -- |
| -- | ||||
| -- | ||||
| Fixed Asset Turnover (Sales/Net PPE) | -- | -- | -- | -- |
| -- | ||||
| -- | ||||
| Total Asset Turnover (Sales/Total Assets) | -- | -- | -- | -- |
| -- | ||||
| -- |
*use Cost of Goods sold to make the comparison to the industry average more accurate. ** list all 3 industry average figures for each ratio
Evaluation: Share what we learn from the data and information collected for this discussion. Interpret each of the ratios and review the Financial Ratios Guidelines document for direction. Do you see any red flags? Does it appear as though the company may have difficulty paying its bills on time? Does it appear as though the company is making efficient use of its assets to generate sales? Sufficiently examining the data and information collected will likely require at least 250 words.
Company is Amazon Inc.
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