The financial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc.

Question:

The financial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E.

Instructions

(a) Based on the information contained in these financial statements, compute the current ratio for the most recent fiscal year for each company. What conclusions concerning the companies' liquidity can be drawn from these ratios?

(b) Based on the information contained in these financial statements, compute the following ratios for each company's most recent fiscal year.

(1) Debt to assets ratio.

(2) Times interest earned.

What conclusions about the companies' long-run solvency can be drawn from the ratios?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...