The financial statements selected for this analysis will highlight the income statement, balance sheet, and cash flow statements for Amazon Inc., Apple Inc., and Google Inc. Analysis of the financial statements will cover company operations between the financial years 2018 and 2016. The income statement will contribute to an understanding of the selected company’s profit/loss statement or statement of income. The balance sheet will display each organization’s position regarding financial position. Finally, the cash flow statement will highlight information regarding the performance of the company in retained earnings over the three-year duration.
Analysis and Performance Trends in the Accounting Statements
Income Statement
The comprehensive income statement for Amazon indicates that the net income was $10,073 in 2018, $3,033 in 2017, and $2,371 in 2016 (Macrotrends, 2019). For the three financial years, Amazon has displayed a significant growth in net income between 2016 and 2016. Apple Inc.’s net income was $59,531 in 2018, $48,351 in 2017, and $45,687 in 2016. Net Income for Google Inc. was $30,737 in 2018, $12,662 in 2017, and $19,478 in 2016.
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Balance Sheet
For the three financial years, Amazon has indicated a significant increase in the balance sheet metrics including the shareholders’ equity, and total shareholders’ equity and total liabilities (Macrotrends, 2019). Specifically, the shareholders’ equity and total liabilities were $162,648 in financial year 2018, $131,310 in financial 2017, and $83,402 in fiscal year 2016. The balance sheet for Apple Inc. was $363,725 in 2018, $375,319 in 2017, and $321,686 in 2016. Google’s balance sheet indicates that the shareholders’ equity and total liabilities was $232,792 in 2018, $197,295 in 2017, and $167,497 in 2016.
Cash Flow Statement
The net cash flow from monetary activities for Amazon Inc. were $10,317 in 2018 financial year, $9,9928 in 2017, and $-3,716 in 2016 (Macrotrends, 2019). For Apple the reports indicated $5,624 in 2018 fiscal year, $-195 in 2017, and $-636 in 2016. Regarding Google, the performance for shareholder’s equity and total liabilities was $232,792 in 2018, 4197,295 in 2017, and $167,497 in 2016.
Weaknesses in the Company’s Financial Statements
Some of the evident weaknesses in the presented financial statements including cash flow statement, income statement, and balance for the three companies regard the human errors in recording inaccurate calculations. Often, employees in the accounting department input incorrect information that creates marginal errors in the long run. Financial statements comprise some errors of omission that should be accounted for in the final financial report delivered annually top the stakeholders. Mistakes in the financial statements, cash flow statements, and statements of comprehensive financial income or income statement lead to compromised decisions that are proliferated further by tax complications. Accounting concerning revenue systems in every financial statement should enforce every business organization to reconsider their approaches to financial reporting because accountants are only allowed to access specific financial accounts.
Regarding the overall performance of the three companies analyzed in this report, positive reports have emerged over the three years of conducting business. However, the statements have not indicated the specific areas that improved performance should focus, such as investment opportunities. Overall, all the companies have displayed robustness in all the performance metrics, with little changes emerging because of undocumented accounting concerns.
References
Macrotrends. (2019). Amazon cash flow statement 2005-2019. Retrieved from https://www.macrotrends.net/stocks/charts/AMZN/amazon/cash-flow-statement
Macrotrends. (2019). Apple Inc. income statement 2005-2019. Retrieved from https://www.macrotrends.net/stocks/charts/AAPL/apple/income-statement?freq=A
Macrotrends. (2019). Google Inc. Alphabet balance sheet 2005-2019 – GOOGL. retrieved from https://www.macrotrends.net/stocks/charts/GOOGL/alphabet/balance-sheet
