Net Flix and Amazon’s Balance sheets Record – keeping trends

    Net Flix and Amazon’s Balance sheets Record – keeping trends

    Order Description
    Are any of the accounts increasing or decreasing?
    If so, what indicators explain this trend?

    Which of these accounts are distinctive to each
    business? Why?

    Based on the presented financial ratios, can you
    determine if the firm is improving or deteriorating? Why or why not?

    © 2015 Laureate Education, Inc. Page 1 of 3
    Course Project Overview
    When looking at a business, it is important to be able to analyze all of its financial components.
    Annual reports tell a specific story to a range of audiences: management, investors,
    employees, and consumers. This story can explain the state of the business as well as
    determine a course of action. Think about a large-scale business that might conduct business
    online, in the office, or via phone. What are some of the risks the company must consider?
    What type of information would play an important role in telling the story of the health of the
    company’s business to these different audiences?
    For the Course Project, you will be analyzing Netflix, Inc., and Amazon.com, Inc. You will be
    using these two companies for this entire project, including the most recent annual reports and
    financial statements.
    Directions for finding an Annual Report from the Securities and Exchange Commission (SEC):
    1. http://www.sec.gov/
    2. “Search EDGAR for Government Filings” –
    http://www.sec.gov/edgar/searchedgar/companysearch.html
    3. Search Company Name –
    a. “Amazon”
    i. Choose “0001018724 – AMAZON COM INC”
    ii. Choose “10-K Documents” then “FORM 10-K”
    b. “Netflix Inc.”
    i. Choose “10-K Documents” then “FORM 10-K”
    Example Annual Reports:
    ? Amazon.com, Inc., Form 10-K, YE 12/31/2014. Retrieved from
    http://www.sec.gov/Archives/edgar/data/1018724/000101872415000006/amzn-
    20141231x10k.htm
    ? Netflix, Inc., Form 10-K, YE 12/31/2014. Retrieved from
    http://www.sec.gov/Archives/edgar/data/1065280/000106528015000006/nflx201410k.ht
    m
    Your Final Case Study Analysis is to be completed in five parts, worth 60 points each,
    with the total Course Project worth 300 points.
    Course Project Timeline
    Week 3
    – Part 1
    Focus:
    ? Item 7:
    Management
    Discussion and
    Deliverable: 2- to 3-page paper
    ? Prepare an Executive Summary (2–3 pages) comparing
    the two companies. The summary must include:
    o What accounts does each company have that you
    © 2015 Laureate Education, Inc. Page 2 of 3
    Analysis (MD&A)
    ? Footnotes of the
    financial
    statements for
    insight on assets,
    liabilities, and
    stockholder’s
    equity
    think are distinctive to each company?
    o Summarize the risk factors mentioned within the
    MD&A (Item 7 in the 10-K) of the footnotes.
    o What do you think are the most important balance
    sheet or income statement accounts that are
    common to the industry of the two selected
    companies? Explain.
    Submit your Assignment by Day 7 of Week 3.
    Week 4
    – Part 2
    Focus:
    ? Income statements
    ? Revenues and
    expenses
    Deliverable: 3- to 4-page paper
    ? Do Netflix, Inc., and Amazon.com, Inc., have any
    accounts in common?
    ? Are the company’s revenues and expenses increasing
    or decreasing?
    ? Do the income statements provide any evidence as to
    why revenues and expenses are increasing or
    decreasing? Provide a rationale to support your
    reasoning.
    ? What revenue(s) or expense(s) are unique to the
    company?
    ? Based on the presented financial ratios, do you think
    each company is improving or deteriorating? Provide a
    rationale to support your reasoning.
    Submit your Assignment by Day 7 of Week 4.
    Week 5
    – Part 3
    Focus:
    ? Statement of cash
    flows
    ? Growth and trends
    Deliverable: 3- to 4-page paper
    ? Which method did each company use when calculating
    the net cash provided by operating activities? Explain.
    ? What was the most significant (i.e., monetarily largest)
    item reported by each company in its investing section
    and in its financing section?
    ? What were these two companies’ trends in terms of net
    cash provided by operating activities during this period
    of time? What do you think it means for these
    companies’ sustainability?
    Submit your Assignment by Day 7 of Week 5.
    © 2015 Laureate Education, Inc. Page 3 of 3
    Week 6
    – Part 4
    Focus:
    ? Balance sheets
    ? Record-keeping
    trends
    Deliverable: 3- to 4-page paper
    ? Are any of the accounts increasing or decreasing? If so,
    what indicators explain this trend?
    ? Which of these accounts are distinctive to each
    business? Why?
    ? Based on the presented financial ratios, can you
    determine if the firm is improving or deteriorating? Why
    or why not?
    Submit your Assignment by Day 7 of Week 6.
    Week 7
    – Part 5
    Focus:
    ? Case study
    analysis on both
    Netflix, Inc., and
    Amazon.com, Inc.
    ? Including
    respective
    profitability and
    expected staying
    power within the
    industry
    Deliverable: 5- to 6-page paper
    1. Overview of Netflix, Inc., and Amazon.com, Inc. (1
    page)
    2. Industry Competitors (1 page)
    3. Narrative Analysis of Key Accounting Policies (2–3
    pages)
    a. If you were a supplier, would you extend open
    account credit to either or both of these companies?
    Why or why not?
    b. If you were a banker, would you make a substantial
    long-term loan to either or both of these companies?
    Why or why not?
    c. If you were an investment banker, would you buy or
    merge with either or both of these companies? Why
    or why not?
    d. As an investor, would you buy stock in either or both
    of these companies? Why or why not?
    4. Current Issues Facing Netflix and Amazon (1 page)
    a. What sustainability issues, if any, face each
    company? Explain.
    Submit your Assignment by Day 7 of Week 7.

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