Question

Selected balance sheet and income statement information from Amazon for 2016 through 2018 follows. $ millions 2018 2017 2016 Net operating profit after tax (NOPAT) $11,307 $3,319 $2,633 Net income 10,375 3,124 2,442 Operating profit 12,794 4,229 4,312 Interest expense 1,332 797 455 Cash from operating activities 31,645 18,916 17,719 Current assets 77,354 62,003 47,154 Current liabilities 64,288 54,410 41,187 Cash and cash equivalents 32,703 21,138 19,914 Marketable securities 9,785 10,778 6,846 Total debt 22,085 23,258 7,232 Assets 167,527 135,249 85,904 Liabilities 111,953 97,385 60,270 40,936 26,046 18,128 Net operating assets (NOA) 24,246 20,178 938 Equity a. Compute profitability measures RNOA and ROE for 2018 and 2017. In which year are the measures stronger? Round answers to one decimal place (ex: 0.2345 = 23.5%). 2018 RNOA % % ROE % % 2017 b. Compute coverage metrics Times interest earned and Cash from operating activities to total debt for 2018 and 2017. Round answers to two decimal places. 2018 2017 Times interest earned Cash from operating activities to total debt

Answer 1

Answer in the pic
Net operating profit After Tace Compute Profitability measure O RNOA = Average Net operating Assets Year 2018 50.90%. 11,307 22 212 3319 Year 2017= 14.9% 22,213 ROE Net Income Share Holder Equity 10.375 40,936 year 2018 -Xtoo 25:37 year 2017 = 3,124 -X160 = 12%. 26046 b. Compute Coverage Metrics Ratios Time Interest Eermed operating Income Interest Inpenses year 2018 12,794 9.61 year 2017 1,332 4.229 5.31 Cash from operating Activities to Debt Cash from operating Activities Total Debt year 2018 1.43 31,645 २२,085 18,916 23,258 year 2017 0.81

c. Determine liquidity for Company Cument Ratio Cument Assets Current liabilities Year 2018 77354 1.2001 64,288 year 2017 62003 54.410 = 1.14:1 Quick Ratio = Quick Assets Cument liabilities year 2018 32,70 3+9785 0.6721 64 288 year 2017= 21.138+ 10778 0.59:1 54,410 Working Notets cuick Assets = Cash & Gecavalents + Marketable seat D. Compute other Ratios 0 Total liability to Egleity Ratio = Total Ciabilities Equity year 2018 - = 9.73 2 1,11953 4o. 936 year 2017 97,385 26,046 Debt - Equity Patio Year 2018 22,085 40,936 year 2017 23,258 26.046 3.74 Debt Equity = 0.54 = 0.89