Prompt

Using the Project Two Financial Formulas spreadsheet and the balance sheet, income statement, and cash flow statement from Mergent Online for your chosen company (Amazon), calculate the financial ratios for the most recent fiscal quarter. Then, compare those ratios with the same ratios for the same fiscal quarter from one year prior in Mergent Online, and analyze your results.

Specifically, you must address the following rubric criteria:

• Financial Calculations: Calculate accurate financial ratios to assess the businesss current financial health. Specifically, calculate the following ratios:
  • Working capital
  • Current ratio
  • Debt ratio
  • Earnings per share
  • Price/earnings ratio
  • Total asset turnover ratio
  • Financial leverage
  • Net profit margin
  • Return on assets
  • Return on equity

• Fiscal Quarter Comparison: Using Mergent Online, summarize the differences between the results from your financial calculations of the most recent fiscal quarter and the results of the same financial calculations of the same fiscal quarter from a year before for your chosen business.
  • For example, if the most recent fiscal quarter available is the 3rd quarter in 2020, then you will compare those results to the same financial calculations from the 3rd quarter in 2019.

• Comparison Analysis: Explain what the results of your calculations and your comparison indicate about the businesss current financial health, providing examples to support your explanation. You might consider the following questions:
  • Do the results indicate the business is financially healthy or financially unhealthy? Which results indicate this?
  • What might be the cause(s) of the businesss financial success or failure?
  • Is more information needed to determine the businesss financial health? If so, which pieces of information might still be needed?

• Short-Term Financing: Explain how potential short-term financing sources could help the business raise needed funds to improve its financial health. Base your response on the businesss current financial information.

ACCOUNTING & FINANCIAL RATIOS CURRENT RATIO (Current Assets / Current Liabilities) TOTAL ASSET TURNOVER RATIO (Total Revenue / Total Assets) Total Revenue Current Assets Current Liabilities #DIV/0! Total Assets #DIV/0! WORKING CAPITAL (Current Assets - Current Liabilities) FINANCIAL LEVERAGE (Total Assets / Shareholder's Equity) Current Assets Total Assets Shareholder's Equity Current Liabilities #DIV/0! DEBT RATIO (Total Debt / Total Assets) NET PROFIT MARGIN (Net Income / Total Revenue) 7 Total Debt Net Income Total Assets #DIV/0! Total Revenue #DIV/0! 9 EARNINGS PER SHARE (Net Income / Weighted Average Common Shares Outstanding) RETURN ON ASSETS (Net Income / Total Assets) Net Income Shares Outstanding Net Income Total Assets #DIV/0! #DIV/0! PRICE EARNINGS RATIO (Share Price (end of quarter / EPS) RETURN ON EQUITY (Net Income - Preferred Dividends / Shareholder's Equity) Stock Price EPS #DIV/0! NI - Pref. Div Shareholder's Equity #DIV/0! *Note to students: Be mindful of the scale being used in Mergent Online when filling this out. If a number is written as 12.53, that does not mean the total for that item is $12.53. There could be numerous zeros written after it, depending on the scale labeled above. In this example, 12.53 is actually $12,530,000. (To delete this comment, right-click on the "WORKING CAPITAL" box, then select 8 ACCOUNTING & FINANCIAL RATIOS CURRENT RATIO (Current Assets / Current Liabilities) TOTAL ASSET TURNOVER RATIO (Total Revenue / Total Assets) Total Revenue Current Assets Current Liabilities #DIV/0! Total Assets #DIV/0! WORKING CAPITAL (Current Assets - Current Liabilities) FINANCIAL LEVERAGE (Total Assets / Shareholder's Equity) Current Assets Total Assets Shareholder's Equity Current Liabilities #DIV/0! DEBT RATIO (Total Debt / Total Assets) NET PROFIT MARGIN (Net Income / Total Revenue) 7 Total Debt Net Income Total Assets #DIV/0! Total Revenue #DIV/0! 9 EARNINGS PER SHARE (Net Income / Weighted Average Common Shares Outstanding) RETURN ON ASSETS (Net Income / Total Assets) Net Income Shares Outstanding Net Income Total Assets #DIV/0! #DIV/0! PRICE EARNINGS RATIO (Share Price (end of quarter / EPS) RETURN ON EQUITY (Net Income - Preferred Dividends / Shareholder's Equity) Stock Price EPS #DIV/0! NI - Pref. Div Shareholder's Equity #DIV/0! *Note to students: Be mindful of the scale being used in Mergent Online when filling this out. If a number is written as 12.53, that does not mean the total for that item is $12.53. There could be numerous zeros written after it, depending on the scale labeled above. In this example, 12.53 is actually $12,530,000. (To delete this comment, right-click on the "WORKING CAPITAL" box, then select 8