Compute and Interpret Capital Structure, Coverage, and Liquidity Ratios

Selected balance sheet and income statement information from Amazon follows.

Required

a$)$ Compare current and prior year profitability measures.

b$)$ Compare current and prior year coverage metrics. c$)$ Compare current and prior year liquidity ratios.

Compare current and prior year capital structure ratios.

Module

Profitability and Coverage

Liquidity and Capital structure

a$.$ Compute profitability measures return on net operating assets $($RNOA$)$ and return on equity $($ROE$)$ for both years.

In which year are the profitability measures stronger?

Current year

Which of the two ratios has improved the most over the two years?

ROE

b$.$ Compute coverage metrics Times interest earned and Cash from operating activities to total debt for both years.