“Financial Statement Analysis: Comparing Amazon and Walmart for Fiscal 2022”

Posted on | by Linus

Perform financial statement analysis on Amazon.com versus Walmart, using ratios and Excel spreadsheet for the most recent published year end date (Fiscal 2022). Prepare a one-page persuasive memo explaining the comparison and attach an Excel image showing your ratio calculations for Amazon. Combined, I believe you can submit both on a single two-page document. Ensure your Excel file is clearly labeled and easily readable and your essay is cogent.
First paragraph:
Introduce your companies (walmart and amazon)
Introduce your method (using ratio analysis and business valuation)
Preview your message
Body of your paper:
Deliver your message … for this assignment use two paragraphs… one for ratio analysis (profitability, productivity and financial leverage) and the other for your two methods of business valuation.
Conclusion:
Summarize your findings and give your advice based on your findings.

Struggling with where to start this assignment? Follow this guide to tackle your assignment easily!

Step 1: Understand the Task

You’re asked to perform a financial statement analysis comparing Amazon and Walmart using ratio analysis and business valuation methods. Your deliverable will be:

  1. A one-page memo explaining the comparison.
  2. An Excel spreadsheet showing the ratio calculations for Amazon, with clear labeling. Both of these should fit together in a two-page document.

Step 2: Introduce the Companies and Your Methods

Start by introducing Amazon and Walmart:

  • Briefly describe what each company does, highlighting their business model (e.g., e-commerce and cloud computing for Amazon; retail for Walmart).
  • Explain that you will analyze their financials using ratio analysis and business valuation methods.

Preview your message:

  • In this memo, you will compare the financial performance of Amazon and Walmart through ratio analysis and business valuation, providing insights into their profitability, productivity, financial leverage, and overall market valuation.

Step 3: Perform Ratio Analysis

Use the most recent Fiscal 2022 data for both Amazon and Walmart. Focus on three types of ratios:

  1. Profitability Ratios:
    • Gross margin, operating margin, and net margin.
  2. Productivity Ratios:
    • Asset turnover, inventory turnover.
  3. Financial Leverage Ratios:
    • Debt-to-equity ratio, interest coverage ratio.

Perform these calculations for Amazon in an Excel spreadsheet, ensuring the calculations are clearly labeled and easy to follow.

What to include in your memo for Ratio Analysis:

  • Amazon vs Walmart: Compare the profitability, productivity, and financial leverage of both companies.
  • Highlight differences or similarities in their ratios and what they tell you about each company’s financial health.

Step 4: Apply Business Valuation Methods

Use two methods for business valuation:

  1. Price-to-Earnings (P/E) Ratio: Compare the market value of Amazon and Walmart relative to their earnings.
  2. Enterprise Value to EBITDA (EV/EBITDA): This ratio helps evaluate a company’s total value, including debt, in relation to its earnings before interest, taxes, depreciation, and amortization.

What to include in your memo for Business Valuation:

  • Compare the P/E ratio and EV/EBITDA of both companies.
  • Discuss what these ratios suggest about the market’s view of each company’s potential for growth and profitability.

Step 5: Conclusion

In the conclusion:

  • Summarize your findings from the ratio analysis and business valuation.
  • Provide your advice based on the comparison. For example, if Amazon has higher growth potential but more financial leverage, and Walmart has stable profitability and lower risk, how should investors view these companies differently?

Step 6: Prepare Your Excel Spreadsheet

Create an Excel spreadsheet with the following:

  • Clearly label your Amazon ratio calculations.
  • Ensure the layout is simple, with distinct columns for each ratio and an easy-to-read format.
  • Consider including charts or graphs for visual clarity if needed.

Step 7: Review and Finalize Your Memo

Before submitting, ensure:

  • Clarity and organization: Make sure your memo flows logically, with clear introductions and conclusions.
  • Excel clarity: Your Excel sheet is easy to follow and properly labeled.
  • APA format for citations (if needed), and make sure there are no spelling or grammar issues.

By following this step-by-step guide, you will have a comprehensive and well-organized financial analysis comparing Amazon and Walmart. Best of luck with your assignment!

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount