The only question is what kind of board and holistic insights can be derived fro
ID: 2590814 • Letter: T
Question
The only question is what kind of board and holistic insights can be derived from Amazons cash flow statement.
Investing Activities
Financing Activities
Fiscal year is January-December. All values USD Millions. 2016 2015 2014 2013 2012 5-year trend Net Income before Extraordinaries 2,371 596 (241) 274 (39) Net Income Growth 297.82% 347.30% -187.96% 802.56% - Depreciation, Depletion & Amortization 7,482 5,646 4,187 2,802 1,832 Depreciation and Depletion 7,195 5,376 4,006 2,634 1,669 Amortization of Intangible Assets 287 270 181 168 163 Deferred Taxes & Investment Tax Credit (246) 81 (316) (156) (265) Deferred Taxes (246) 81 (316) (156) (265) Other Funds 2,920 3,040 2,238 1,788 1,129 Funds from Operations 12,527 9,363 5,868 4,708 2,657 Changes in Working Capital 3,916 2,557 974 767 1,523 Receivables (3,367) (1,755) (1,039) (846) (861) Inventories (1,426) (2,187) (1,193) (1,410) (999) Accounts Payable 5,030 4,294 1,759 1,888 2,070 Other Accruals 1,724 913 706 736 1,038 Other Assets/Liabilities 1,955 1,292 741 399 275 Net Operating Cash Flow 16,443 11,920 6,842 5,475 4,180 Net Operating Cash Flow Growth 37.94% 74.22% 24.97% 30.98% - Net Operating Cash Flow / Sales 12.09% 11.14% 7.69% 7.35% 6.84%Explanation / Answer
1. The margins are very low. When we see the ratio of net operating cash flows to sales which is at 12.09% being the highest amongst the 5 years. At this ratio, the sales stood at $136005 mn.and the net income of $ 2371 mn means a margin of 1.74%
2. The activities are financed by constant increase in account payables. Contribution of Increase in account payables is as much as 30.6% in 2016.
3. Another pount needs to be seen that total increase in account rceivables and inventories is less than increase in account payable - year 2016
4. The trends analyzed in point no. 2 and 3 above remain more or less the same except in 2014.
5. Constant increase in depreciation indicates that placement of funds to aquire assets is being done regularly and it seems that short term funds are used for long term purposes although concrete figures are not available at this time.
6. Continuous increase in other accruals also indicate that overall health of busness is not good or rather bad because some regular liabilities are not being met in time and that's why these are increasing.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.