Question: Amazon.com Inc.s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of

Amazon.com Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon and Wal-Mart, including the notes to the financial statements, are available at each company’s respective website.

Instructions

a. At December 31, 2015, what was Amazon’s largest current liability account? What were its total current liabilities? At January 31, 2016, what was Wal-Mart’s largest current liability account? What were its total current liabilities?

b. Based on information in these financial statements, compute the following 2015 values for Amazon and 2016 values for Wal-Mart:

1. Working capital.

2. Current ratio.

c. What conclusions concerning the relative liquidity of these companies can be drawn from these data?

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