Compute the debt-to-equity ratios for amazon.com

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Reference no: EM13910205

I need help with the following questions. I have already collected the necessary data for Amazon.com.

1. Review the data below and decide give your recommendations as to whether or not you consider these ratios to be too small or too large. Should Amazon increase its debt or take steps to pay off its debt?

Amazon.com Data:

Debt Ratio (total liabilities divided by the total liabilities plus equity)
Total Liabilities = $24,363,000
Total Equity = $8,192,000
$24,363,000 / ($8,192,000 + $24,363,000) = .748 or 75% (High Percentage of Leverage)

Debt to Equity Ratio (total liabilities divided by total equity)
$24,363,000 / $8,192,000 = 2.97

Debt to Short Term Liabilities Ratio (short term liabilities divided by total equity)
Short Term Liabilities = $19,002,000
$19,002,000 / $8,192,000 = 2.319

Debt to Long Term Liabilities Ratio (long term liabilities divided by total equity)
Long Term Liabilities = $3,084,000
$3,084,000 / $8,192,000 = .376

2. Compute the debt-to-equity ratios for Amazon.com, Ebay and Overstock.com. Which of these three companies has the highest debt-to-equity ratio, and why do you think it chose to have a relatively high ratio? Which of these three companies has the lowest debt-to-equity ratio, and why do you think it chose to have a relatively lower ratio?

Attachment:- final.xlsx

Reference no: EM13910205

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