![]() However, while real assets are considered more stable than financial assets, and they are less susceptible to inflation and changes in currency values, there are drawbacks to having a higher ratio of real to financial assets. A company in full production is expected to have a higher real to total a s s e t s ratio, suggesting Walmart's overall financial health is greater than Amazon's in this respect. Our findings revealed that Amazon has a real to total a s s e t s ratio of 0.59, while Walmart has a real to total a s s e t s ratio of 0.92. Utilizing the data obtained from Amazon's and Walmart's 2016 annual financial statements, which we have compiled into the attached spreadsheet, we calculated the real to total a s s e t s ratio for each company. All other assets were classified as real assets. OVERVIEW OF FINDINGSĪt your request, in calculating financial assets for each company, we considered cash and cash equivalents, short-term investments, net receivables, and long-term investments as financial assets. Based on these findings, we predict that Walmart would be better prepared to weather a general market downturn than Amazon. Walmart's higher real to total a s s e t s ratio indicates the company's overall financial health is greater than Amazon's in this respect, while Amazon's minimally higher current ratio indicates Amazon is slightly better prepared to meet short-term debt obligations than Walmart. However, Walmart's debt ratio and debt-to-equity ratio suggest the company devotes a small portion of its assets to servicing debt than Amazon, whereas Amazon has aggressively financed the company's growth with potentially high-risk debt. ![]() The inventory turnover ratio did not provide a meaningful analysis of financial health in the case of Walmart and Amazon in 2016. We calculated five ratios, which provide a more nuanced understanding of the overall financial health of a company, including the real to total a s s e t s ratio, current ratio, debt ratio, debt-to-equity ratio, and inventory turnover ratio. ![]() Amazon's revenue in 2016 was $135.99 billion, while Walmart's revenue was $482.13 billion. Relevant financial data from the balance sheets for Amazon and Walmart in 2016 have been compiled for easy comparison in the attached spreadsheet.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |