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MANAGEMENT ACCOUNTING

CIA-1

TOPIC: COMPARATIVE STATEMENT


ANALYSIS OF AMAZON CO. LTD
COMPARATIVE INCOME STATEMENT OF AMAZON COMPANY LTD
FOR THE YEAR 2014-2015

PARTICULARS 2014 2015 ABSOLUTE CHANGE PERCENTAGE CHANGE


Revenue from operations 88988000 107006000 18018000 20.25
Less: Cost of revenue 627,52,000 71651000 8899000 14.18
Total revenue from operation 26236000 35355000 9119000 34.76
Less: Expenses
Other expenses 88810000 104773000 15963000 17.97
Profit Before Tax 178000 2233000 2055000 1154.5
Less: Income Tax 167000 950000 783000 468.9
Profit After Tax -241000 596000 355000 147.3

INTERPRETATION:
1. The Gross Profit has been increased by 34.76% from the year 2014- Rs. 26236000 to
Rs. 35355000 in 2015. This shows that the company increased its sales during the
year 2014-2015.
2. There is an increase in the Research and Development with a percentage change of
35.20%from 2014 to 2015 i.e. Rs 9,275,000 to Rs 12,540,000 showing that the
company has focused more on its Research in expanding its operations and
technology and lump sum of money was spent on it.

3. There is an increase also in the Selling, Distribution and Administrative Expenses


from Rs 16,650,000 in 2014 to Rs 20,411,000 in 2015 i.e. 22.59% showing that the
company has expanded its selling and distribution circle and the revenue is being used
to finance the activities
4. The Operating Income has increased by 1154.5 % from 2014 to 2015 i.e. Rs 178,000
to Rs. 2,233,000. This shows the company has increased its Sales with nearly double
the portion even after investing a lump sum in o This shows the company has
increased its Sales with nearly double the portion even after investing a lump sum in
operating expenses.
COMPARATIVE STATEMENT OF BALANCE SHEET FOR THE YEAR 2014 - 2015
ABSOLUTE
PARTICULARS 2014 2015 CHANGE %CHANGE
EQUITIES AND LIABILITIES
Stockholders' Equity
Misc. Stocks Options Warrants - -
Redeemable Preferred Stock - -
Preferred Stock - -
Common Stock 5,000 5,000 0 0
Retained Earnings 19,49,000 25,45,000 5,96,000 30.579785
Treasury Stock -23,48,000 -25,60,000 -2,12,000 9.0289608
Capital Surplus 1,11,35,000 1,33,94,000 22,59,000 20.287382
Other Stockholder Equity -5,11,000 -7,23,000 -2,12,000 41.48728
Total Stockholder Equity 1,07,41,000 1,33,84,000 26,43,000 24.606647
Non current liabilities
Long Term Debt 82,65,000 82,27,000 -38,000 -0.45977
Other Liabilities 31,86,000 33,01,000 1,15,000 3.6095417
Deferred Long Term Liability
Charges - -
Minority Interest - -
Total non current liabilities 1,14,51,000 1,15,28,000 77,000 0.6724304
Current Liabilities
Accounts Payable 1,64,59,000 2,03,97,000 39,38,000 23.926119
Short/Current Long Term Debt 15,20,000 2,38,000 -12,82,000 -84.34211
Other Current Liabilities 35,23,000 51,18,000 15,95,000 45.273914
Total Current Liabilities 2,80,89,000 3,38,87,000 57,98,000 20.641532
TOTAL EQUITIES AND LIABILITIES 5,45,05,000 6,47,47,000 1,02,42,000 19
ASSESTS
Non currentAssests
Long Term Investments - 16,000
Property Plant and Equipment 1,69,67,000 2,18,38,000 48,71,000 28.70867
Goodwill 33,19,000 37,59,000 4,40,000 13.257005
Intangible Assets 7,64,000 9,92,000 2,28,000 29.842932
Accumulated Amortization - -
Other Assets 21,28,000 24,37,000 3,09,000 14.520677
Deferred Long Term Asset Charges - -
Total non current assets 2,31,78,000 2,90,42,000 58,64,000 25.299853
Current assests
Cash And Cash Equivalents 1,45,57,000 1,58,90,000 13,33,000 9.1571065
Short Term Investments 28,59,000 39,18,000 10,59,000 37.040923
Net Receivables 56,12,000 56,54,000 42,000 0.7483963
Inventory 82,99,000 1,02,43,000 19,44,000 23.424509
Other Current Assets - -
Total Current Assets 3,13,27,000 3,57,05,000 43,78,000 13.975165
TOTAL ASSESTS 5,45,05,000 6,47,47,000 1,02,42,000 19

INTERPRETATIONS:
1. The stockholder’s equity has been increased by 26,43,00 i.e., by 24.6%.
2. The reduction in the short-term debt by 84.34% and the increase in the equity by
24.6% is a very good sign as it increases the financial strength of the company.
3. Fixed assets have been increased by 25.29% as compared to last year. This has been
made possible because of increase in stockholders’ equity.
4. The cash and cash equivalents have been increased by 9.15% which shows the
liquidity flow of the company.
5. Overall the performance of the company as compared to the previous year has
improved and is doing good.

COMPARATIVE INCOME STATEMENT OF AMAZON COMPANY LTD


FOR THE YEAR 2015-2016
PARTICULARS 2015($000) 2016($000) +/-($000) %
Change
Revenue from 100, 006,000 135,987,000 35,981,000 35.98
operation
Less: Cost of 71,651,000 88,265,000 16,614,000 23.19
revenue
Revenue from 47,722,000 35,355,000 12,367,000 34.98
Operations
Less Expenses

Other Expenses 104,773,000 131,801,000 27,028,000 26.82

Profitbefore Tax 2,233,000 4,186,000 1,973,000 87.46

Less Income Tax 950,000 1,425,000 475,000 50

Profit After Tax 596,000 2,371,000 1,775,000 297.82


INTERPRETATION OF AMAZON INCOME STATEMENT 2015-2016

5. The Gross Profit increased by 34.98% from the year 2015-Rs 35,35,000 to Rs
47,72,000 in 2016. This shows the company increased its sales during the year 2015-
2016
6. There is an increase in the Research and Development with a percentage change of
28.27% from 2015 to 2016 i.e. Rs 125,40,000 to Rs 160,85,000 showing that the
company has focused more on its Research in expanding its operations and
technology and lump sum of money was spent on it.
7. There is an increase also in the Selling, Distribution and Administrative Expenses
from Rs 204,11,000 in 2015 to Rs 272,84,000 in 2016 i.e. 33.67% showing that the
company has expanded its selling and distribution circle and the revenue is being used
to finance the activities
8. The Operating Income has increased by 87.46% from 2015 to 2016 i.e. Rs 22,33,000
to Rs 41,86,000. This shows the company has increased its Sales with nearly double
the portion even after investing a lump sum in operating expenses.
9. Profit After Tax has increased by 297.8% from 2015 to 2016 i.e. Rs 5,96,000 to Rs
23,71,000. This shows how the company performance has improved tremendously
regardless of the huge expenditures undertaken.
Overall the company performance is good and the company managed to make
almost 300% gain i.e. 3 times the previous year profit in 2016.

COMPARATIVE STATEMENT OF BALANCE SHEET FOR THE YEAR 2014 - 2015

Equity and Increase or Decrease


Liabilities 2015 2016 Absolute change(+/-) %
Shareholders funds
Common Stock 5000 5000 0 0
Retained Earning 2545000 4916000 2371000 93.16306483
Treasury Stock -2560000 -2822000 -262000 10.234375
Capital Surplus 13394000 17186000 3792000 28.31118411
Other Stockholder
Equity -723000 985000 1708000 -236.2378976
Total Stockholder 13384000 19285000 5901000 44.08995816
Equity
Non current
liabilities
long term debts 8227000 7694000 -533000 -6.478667801
other liabilities 3301000 5088000 1787000 54.13511057
current liabilities
accounts payable 20397000 25309000 4912000 24.08197284
Current long term
debts 238000 1056000 818000 343.697479
Other current
liabilities 5118000 7168000 2050000 40.05470887
TOTAL EQUITY &
LIABILITIES 37728000 48448000 4421000 11.71808736

Assets
Non current Assets
Fixed assets
Tangible assets
Property plant and
equipment 21838000 29114000 7276000 33.31806942
Intangible assets 992000 854000 -138000 -13.91129032
Goodwill 3759000 3784000 25000 0.665070497
Long term
Investments 16000 223000 207000 1293.75
Current assets
Other Assets 2437000 3646000 1209000 49.61017645
Inventory 10243000 11461000 1218000 11.89104754
Net receivables 5654000 8339000 2685000 47.48850371
Short term
investments 3918000 6647000 2729000 69.65288412
Cash and cash
equivalents 15890000 19334000 3444000 21.67400881
TOTAL ASSETS 3772800 48448000 10720000 54.99207823
INTERPRETTATIONS:

1. Assets and liabilities of the company has increased by 54.99% from 2015 to 2016.
2. The reduction in debt by 6.47% and improvement of equity by 44.40% is a good work
as it shows the improvement of the financial strength of the company.
3. Fixed assets have increased from last year by 33.1% as compared to last year. This
has been made possible because of increase in shareholders funds.
4. Overall the performance of the company for the year 2016 has increased as compared
to 2015. The performance of Amazon for 2016 as compared to 2015 is good.

COMPARATIVE INCOME STATEMENT FOR THE YEAR 2016 - 2017

absolute percentage
Particulars 2016 2017 change change
1.Income:sales,general and
admin 43536000 61826000 18290000 42.01120911
add:A.operating income 4186000 4106000 -80000 -1.911132346
B. income/expense item 190000 548000 358000 188.4210526
earnings before interest and
tax(A+B):(1.1) 4376000 4654000 278000 6.352833638
2.expenses
interest expense 484000 848000 364000 75.20661157
total expense(2.1) 484000 848000 364000 75.20661157
earnings before tax(1.1-
2.1)(earnings) 3892000 3806000 -86000 -2.209660843
less:income tax 1425000 769000 -656000 -46.03508772
equity earnings/loss
unconsolidated subsidiary 96000 4000 -92000 -95.83333333
total (tax) 1521000 773000 -748000 -49.17817226
earnings after tax(earnings-tax) 2371000 3033000 662000 27.92070856

Interpretation
1. There is an 42.01% increase in the sales.
2. The total expenses have increased by 75.21%
3. Earnings before tax have reduced drastically from by 2.21% which is not good for the
company.
4. Earnings after tax shows a decent increase to 27.92%.

COMPARATIVE STATEMENT OF BALANCE SHEET FOR THE YEAR 2016 - 2017


absolute
Particulars 2016 2017 change % change
equities and liabilities
stock holders equity
common stock 5000 5000 0 0
capital surplus 17186000 21389000 4203000 24.45595252
retained earnings 4916000 8636000 3720000 75.67127746
treasury stock -1837000 -1837000 0 0
other equities -985000 484000 1469000 -149.1370558
total equity 19285000 27709000 8424000 43.68161784
non current liabilities
long term debt 7694000 24743000 17049000 221.5882506
deferred liabilities 0 0 0 0
misc. stock 0 0 0 0
other liabilities 12607000 20975000 8368000 66.37582296
total non current liabilities 20301000 45718000 25417000 125.200729
current liabilities
account payables 39048000 52786000 13738000 35.18233968
short term debt/current portion
of long term debt 0 0 0 0
other current liabilities 4768000 5097000 329000 6.900167785
total current liabilities 43816000 57883000 14067000 32.10471061
TOTAL EQUITIES AND LIABILITIES 83402000 131310000 47908000 57.44226757
ASSESTS
non current assets
long term investment 0 0 0 0
fixed assets 29114000 48866000 19752000 67.8436491
intangible assets
goodwill 3784000 13350000 9566000 252.8012685
other assets 4723000 8897000 4174000 88.37603218
deerred asset charges 0 0 0 0
total non current assets 37621000 71113000 33492000 89.02474682
current assets
cash and cash equivalents 19334000 20522000 1188000 6.144615703
short term investments 6647000 10464000 3817000 57.42440199
net receivables 8339000 13164000 4825000 57.86065475
inventory 11461000 16047000 4586000 40.01396039
other current assets 0 0 0 0
total current assets 45781000 60197000 14416000 31.48904567
TOTAL ASSETS 83402000 131310000 47908000 57.44226757

Interpretation
1.the comparative balance sheet of the company reveals that during 2016-17 there has been
an increase in fixed asset by 19752000, percentage change:67.84%. while long term debt
increased by 17049000 and the capital surplus has increased by 4203000 and retained
earnings by 3720000. This fact depicts that the policy of the company is to purchase fixed
assets from long term sources of finance thereby affecting the working capital.
2. common stock remains unchanged.
3.the current assets have increased by 14416000 and the cash has increased by 1188000. On
the other hand there has been increased in inventory amounting to 4586000. The current
liability have increased by 14067000 i.e., 32.10%. this further confirms that the company has
raised long term finance even for current assets resulting in an improvement in the liquidity
position of the company.
4. capital surplus has increased by 4203000 i.e., 24.46% which shows that the company’s
surplus has not been properly utilized for the payment of dividends to shareholders either in
cash or by issue of owner’s share.
5. the overall financial position of the company is satisfactory.

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