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.