CHAPTER 1
Chapter 5
MANAGING OPERATIONS and FINANCE
Discussion
Liquidity Analysis
Amazon's ability to cover its obligations was estimated using the liquidity ratios. The
computation was done by calculating current liabilities and liquid assets. The liquidity ratio
assesses a company's business probability and willingness to repay short-term debts. It can be
observed that the company has a substantially strong liquidity in its operations. For instance, a
desirable current ratio is 2:1, and here in both the years, the company has achieved an aggregated
current ratio of 1.5:1, which is quite favourable. The company’s improved liquid ratios in the
2020 financial year as compared to 2019 shows, the company can pay off its debt with relevant
operations intensity.
Profitability Analysis
These calculations were used by the investigator to measure a corporation's income versus its
expenses. The report suggests that the profitability ratios of the company has increased in the
financial year 2020 as compared to the financial year 2019. Except the returns of equity which
has reduced in the succeeding year. However, the company still has a favorable profitability ratio
in both the years.
Turnover Analysis
The Turnover Rates of Amazon were used to measure the company's revenue versus its assets.
The business employs a variety of different turnover rates. As a result, the report includes a few
turnover ratios. Here, it can be observed that the turnover has deteriorated in the financial year
2020, the probable reasons are the impact of the outbreak of the coronavirus pandemic which
impacted many global companies. However, the recovery from the 3rd quarter of the previous
financial year has been substantially favorable for the company.
Conclusion
In conclusion, it can be stated that the current financial situation of Amazon is at a substantially
strong position. The report includes a brief overview of Amazon Inc, including that of the
company's key distinctive characteristics and a brief outline of its operations and the sector
through which it works. It will be accompanied by a measurement of the required financial ratios
based on Amazon's financial statements and financial statements of two fiscal years. This could
also be used to display the company's financial performance. The whole financial analysis of
Amazon's operating system and application is focused on industry trends. Ratios from finance
repositories were used as a medium of comparative performance. It is being used, and the
company may have made use of specific information about the company that is accessible. In
some cases it has been observed that the company has performed better in 2020 than in 2019, and
vice versa in other few. Hence, it can be stated that the company has managed to enhance its
managerial and financial performance in the recent years as compared to the previous years,
despite the current global distress in the corporate sector caused by the outbreak of pandemic.
The company is on a mode of higher financial accomplishments and has managed to secure a
global market dominance in the e-commerce industry.
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