Putting the brakes on teenage driving speech analysis

Page 2 of 46

Madison Conradis

Amazon

Page 2 of 46

Madison Conradis

Amazon

Annual Report Workbook

Getting under the hood of an Annuimage1.pngal Report

and knowing what’s inside

by Donald Bittar

Introduction

You can use this workbook for analyzing many companies and saving your analysis for each one, like many professionals. Just like them, over time, you can compare a company’s actual performance to your analysis and predictions. Saving your analysis sheets can help sharpen you analytical skills.

The questions in the workbook are numbered the same way as they are in the book, ‘Getting Under the Hood of an Annual Report’. As there are no questions in the first chapter of the book, the workbook starts with Chapter 2. It will make it easier for you to relate the questions in the workbook to those in the book.

Your input to the workbook will appear in a dark green font while the questions appear in blue. The different font colors can make it easier for you to see your work.

You’ll need to do some number crunching to complete your annual report analysis. The Big Calculating Tool, located on your CD, can save you a great deal of time and make the number crunching nearly painless. Every ratio and calculation for the book is included in the Big Calculating Tool. You’ll have more time for analysis if you use the Big Calculating Tool.

Table of Contents

5Chapter 2

Question 2.0 – What do you want to learn about company and why? 5

Question 2.1 - Fundamental Information Set For Your Company 5

Question 2.2 - The Marketplace Context 7

Question 2.3 - Challenges and Success for Your Company 8

Chapter 3 10

Question 3.1 – What is Management saying about your company? 10

Question 3.2 – What did the Chairman say? 11

Question 3.3 – Internal Controls and Auditors 12

Chapter 4 13

Question 4.0 – What is your company’s fiscal year 13

Question 4.1 – Current Assets 13

Question 4.2 – Property, Plant and Equipment 13

Question 4.3 – How good is the Goodwill 14

Question 4.4 – Current Liabilities 14

Question 4.5 – How much stock is there and who owns it? 15

Question 4.6 – Who owns the stock? 15

Question 4.7 – First look at the company’s strength 16

Question 4.8 – Significant changes in the balance sheet 17

Question 4.9 – Significant changes in the cash account 17

Question 4.10 – Debt to equity and the competition 17

Question 4.11 – ‘Income statement’. What’s in a name? 18

Question 4.12 – How does your company report the core business? 18

Question 4.13 – How does your company describe its business income? 18

Question 4.14 – Irregular items. Good or Bad? 19

Question 4.15 – The big questions. Are they makin’ money? Are they lookin’ good? 20

Question 4.16 – Which trend is important and why? 21

Question 4.17 – How strong is your company’s cash position? 21

Question 4.18 – How well can your company pay its bills? 22

Question 4.19 – How leveraged is your company? 22

Question 4.20 – How well does your company invest in its future? 24

Question 4.21 – Capital and Treasury Stock 24

Question 4.21 –Basic information about your company not found on the financial statement? 25

Question 4.22 –Other significant information about your company not found on the financial statement? 25

Chapter 5 27

Question 5.1 – Working Capital Balance 27

Question 5.2 – Acid Test or Quick Ratio 27

Question 5.3 – Current Ratio 28

Question 5.4 – Cash Ratio 29

Question 5.5 – Return on Sales Ratio 30

Question 5.6 – Return on Equity Ratio 30

Question 5.7 – Return on Assets Ratio 31

Question 5.8 – Asset Turn Ratio 32

Question 5.9 – Gross Profit Margin Ratio 32

Question 5.10 – Inventory Turnover Ratio 33

Question 5.11 – Days in Inventory Ratio 34

Question 5.12 – Accounts Receivable Turnover Ratio 34

Question 5.13 – Average Collection Period 35

Question 5.14 – Accounts Payable Turnover Ratio 36

Question 5.15 – Net Working Capital Turnover Ratio 37

Question 5.16 – Debt to Equity Ratio 38

Question 5.17 – Debt to Asset Ratio 38

Question 5.18 – Gearing Ratio or Long Term Debt to Shareholders’ Equity Ratio 39

Question 5.19 – Interest Coverage Ratio or Debt Service Ratio 40

Question 5.20 –Earnings per Share 41

Question 5.21 – Price/Earnings Ratio 41

Question 5.22 –Dividend per Share 42

Question 5.23 – Dividend Payout Ratio 43

Chapter 6 45

Question 6.0 – Calculate the Altman Z-Score 45

Question 6.1 - What did you learn about your company 45

Question 6.2 - Would you buy, sell, hold or stay away 45

Chapter 2

Question 2.0 – What do you want to learn about company and why?

2.0 - What You Want To Learn About the Company and Why?

Priority

What do you want to learn?

Why do you want to learn it?

A

If Amazon is financially stable.

This can help if I plan on investing in the future.

B

If Amazon can pay their Debts.

If I sell my old textbooks online I want to make sure I will get paid for them.

C

If Amazon is being effected by Apple store.

Mostly curiosity. Also if they are being affected how bad and will this potentially be detrimental to the company.

D

What Amazon is doing to separate themselves from their competitors such as Apple and the Apple Store.

This will show how they are taking the competition and how well the company can come past competition.

Question 2.1 - Fundamental Information Set For Your Company

The answer to the following questions may be found in either the Annual Report to Stockholders or on the SEC Form 10-K. It may also be necessary for you to use other sources. To fully answer the questions, you must identify the source for your information and also include the answer. If the question is not applicable to your company, place “NA” as the answer. To identify the source use “AR” for Annual Report to Stockholders and “10K” for the SEC Form 10-K. If something else, use “Other” and include the identification at the end of your answer.

2.1 - Fundamental Information Set For Your Company

Question

Source

Answer

A

What is the official company name?

10K

Amazon.com Inc

B

What is Company headquarters address?

10K

410 Terry Avenue North

Seattle, Washington 98109-5210

C

What is the Executive Office telephone number?

10K

206-266-1000

D

What is the Investor Relations telephone number?

Other

206-266-2171 which I found on the Amazon Investor Relations website after not being able to find it in the 10-K or Annual Report.

E

What is the official company website?

10K

The official website is www.Amazon.com.

F

What is the fiscal year ending date?

10K

Amazon’s Fiscal year ending date ends on December 31st of each year.

G

State of incorporation

10K

Delaware

H

What government agency, other than the SEC, has a significant impact on your Company?

Other

N/A

I

What is the trading symbol for your Company’s common stock?

10K

AMZN

J

Which stock exchange lists the common stock for your Company?

10K

Nasdaq Global Select Market (since May 1997)

K

What is the name of the stock transfer agent for your Company?

Other

BNY Mellon Share owner Service handles the stock transfer for Amazon. They also handle companies such as eBay, Burger King, Pepsi, Costco, American Express and much more. I found this information on Kabukencafe.com.

L

What is the Par Value for the common shares of your Company?

10K

$.01 par value per share

M

What is the number of common shares outstanding?

10K

As of January 19,2012, the number of common shares outstanding are 455,068,465.

N

In the past 3 years what is the highest trading price for the common stock for your company.

10K

246.71 in the 4th quarter of the year ending December 31, 2012

O

In the past 3 years what is the lowest trading price for the common stock for your company?

10K

105.80 in the third quarter of the year ending December 31,2010

P

How many members are on the Board of Directors?

10K

There are 9 people currently on the Board of Directors.

Q

How many Board Members are present or past employees of the Company?

10K

Jeffrey P. Bezos is currently the CEO and president of Amazon. He is also the only member of the board of director that is working or has worked for Amazon.com Inc.

R

How many are Board Members are from outside your Company?

10K

The other 8 board members of Amazon.com Inc are from outside of the company.

S

Which companies or institutions do the outside Board Members represent?

10K

Below is the list of names of the board members and who they represent:

Tom A. Alberg- Madrona Venture Group

John Seely Brown- University of Southern California

William B. Gordon- Kleiner Perkins Caufield & Beyers

Blake G. Krikorian- id8 Group Productions, Inc.

Alain Monie- Ingram Micro Inc.

Jonathan J. Rubinstein- Palm. Inc.

Thomas O. Ryder- Reader’s Digest Association

Patricia Q Stonesifer- Smithsonian Institution

T

How many subsidiaries are directly or indirectly controlled by your Company?

10K

Amazon.com Inc controls 9 subsidiaries.

U

How many subsidiaries have jurisdictions outside the United States?

10K

There are 2 subsidiaries that have jurisdiction outside of the United States. They are both over Luxembourg.

Question 2.2 - The Marketplace Context

If analyzing a company’s performance were only about the numbers, predicting the performance of a company would be easy. Performance, success and failure are outcomes that are affected by the marketplace. Your company does not exist inside a vacuum. It lives alongside other companies actively struggling to protect existing customer relationships and working to create new customers. Often companies will compete for the same customers. For some companies the competitors are easily identifiable. Your company’s SIC code can help you identify its competitors. They will have the same SIC code. Other companies compete indirectly with alternative products or technologies making it difficult to identify competitors. Consider FedEx with both direct and indirect competitors.

The answer to the following questions may be found in either the Annual Report to Stockholders or on the SEC Form 10-K. It may also be necessary for you to use other sources. To fully answer the questions, you must identify the source for your information and also include the answer. If the question is not applicable to your company, place “NA” as the answer. To identify the source use “AR” for Annual Report to Stockholders and “10K” for the SEC Form 10-K. If something else, use “Other” and include the identification at the end of your answer.