Go online and research a company that is publicly traded on the US stock exchang

Question

Go online and research a company that is publicly traded on the US stock exchanges (NASDAQ, AMEX, NYSE). Find the ticker symbol, describe the industry and business the company is in, find the 10k statement and focus on the financial statements found there.

Determine the three ratios which best help you determine the financial health of this company. Do a trend analysis for the most recent three years and then summarize your findings along with a recommendation and rationale for buying, selling or holding this stock as an investment.

Suggested length of paper 2-3 pages.

Explanation / Answer

I chose Amazon Inc. It is an American company that was founded in 1994. It is into online retail business or you can say it is e-commerce company that provides many products online. This is the largest e-commerce company in the world. Its owner and CEO is Jeff Bezos. It is also the world's third largest company in information technology.

It is listed on NASDAQ, Its symbol is AMZN, its share is currently trading at $2000.

Ratio Analysis- (All data is till december 2017)

Total Asset turnover- This ratio tells how efficiently assets are being used to generate sales for the company. It is the activity measure. It is 1.35 in December 2017 that decreased from previous years.

Current Ratio- This ratio is a liquidity measure and tells the liquidity position of the company. It is 1.04 in 2017, in 2016, it was 1.04 only but has come down from last years.

Debt Equity ratio- This ratio is solvency measure and tells the relationship between equity and debt in the company. It increased in 2017 from previous years.

Net Profit margin- This is the profitability measure and tells about the after tax net profit over sales. It is 2% approx in 2017 that has come down from previous years.

Conclusion- No doubt, company is good, it has long term growth potential. It works on low margins. This year numbers are not good but fundamentally company is strong. Its business model is good.

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