# Financial Ratio Analysis

I’m studying and need help with a Business question to help me learn.

###### Purpose of Assignment

The purpose of this assignment is to help students gain a better understanding of the financial statements used for corporate financial reporting and the key ratios used to make business decisions.

###### VERY IMPORTANT – ONE SUBMISSION IS REQUIRED FOR THIS ASSIGNMENT

STEP 1 – (Add as an APPENDIX after the references page within the WORD document in STEP 2 below) – The APPENDIX is simply an additional page after your references page where you show your work.

Review the balance sheet and income statement in the Amazon’s 2018 Annual Report (see link below). Calculate the ratios below for 2018 only, using the formulas given. Make sure you show your work. Showing your work is a requirement for credit. For example, each calculation should be presented as follows: Return on Equity = Net Income/Total Equity = 10073/43549 = .23. That is all you need to meet the “show your work” requirement.

· Current Ratio = (Current Assets/Current Liabilities)

· Quick Ratio = (Current Assets-Inventory)/Current Liabilities

· Debt Equity Ratio = (Total Assets – Total Equity)/Total Equity

· Inventory Turnover Ratio = Cost of Goods Sold/Inventory

· Receivables Turnover Ratio = Total Net Sales/Accounts Receivable

· Total Assets Turnover Ratio = Total Net Sales/Total Assets

· Profit Margin (Net Margin) Ratio = Net Income/Total Net Sales

· Return on Assets Ratio = Net Income/Total Assets

STEP 2 – (Submit as a WORD document in APA format)

Define the ratio and explain why each is important for financial decision making for Amazon. Final answers must be incorporated within the discussion. The discussion portion should only include your final answers. The calculations should be added as an appendix per Step 1. Your outline for your paper should look similar to the following:

· Intro

· Current Ratio

· Quick Ratio

· Debt Equity Ratio

· Inventory Turnover Ratio

· Receivables Turnover Ratio

· Total Assets Turnover Ratio

· Profit Margin (Net Margin) Ratio

· Return on Assets Ratio

· Conclusion

· References

· Appendix (this is your Step 1 from above)

Each point above should be a paragraph containing 4-5 sentences, with the exception of the references and appendix pages. There are required references for each assignment. Those are given to you below. So, all you need to do is copy, paste and then proceed to double-space, alphabetize and format into a hanging indent. You should not need to use other references. But if you do, format those using the Reference and Citation Generator Tool (see link below).

Minimum required references include your textbook and Amazon’s 2018 annual report (see below). 