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.