Income Statement Variance Analysis

Income Statement Variance Analysis

This is is a solution of Income Statement Variance Analysis that describes about  Developing business and create finance resources.

Income Statement Variance Analysis:

Component (Millions)YearVariance (%)
2014201320122013 – 20142012 – 2013
Sales88,98874,45261,093120%122%
Operating Expenses88,81073,70760,417120%122%
Net Income/Loss(241)274(39)-188%703%

Income Statement Variance Analysis performed here is the comparison of the year 2014 with the prior year’s i.e. 2013 and 2014. Talking about the main components of financial statement, it is obvious that Amazon has achieved an increase of 20% for the year 2014 and 22% for the year 2013 in its overall sales. Moreover the operating expenses of the company have automatically shown the same level of increase as achieved in sales. Talking about the net income/loss, Amazon got significant losses of 241 Million in the recent year i.e. 2014.

Balance Sheet Variance Analysis:

Component (Millions)YearVariance (%)
2014201320122013 – 20142012 – 2013
Total Assets54,50540,15932,555136%123%
Total Liabilities43,76430,41324,363144%125%
Total Stockholder’s Equity10,7419,7468,192110%119%

Income Statement Variance Analysis

Talking about the main components of balance sheet, it can be concluded that Amazon has achieved a good and positive increase in the overall comparison of three years. For the year 2014, Amazon has made investment of about 14 Million in the Total Assets, therefore, making an increase of about 36% from the year 2013. Moreover about 8 Million investment were made in Total assets in the year 2013 i.e. 23% as compared to the year 2012.

Secondly total liabilities have also increased which is not good sign for the company. About 13 Million have been increased i.e. 44% from the last year. Finally a low but considerable increase has also been observed from the last year. About 1 Million increased has been achieved i.e. 10% as compared to the last year.
References:

Financials. Financial Analysis of Amazon.com Inc. Audubon April. (2015),  Morning star, Inc.

Amazon. Investor Relations. Audubon April. (2015)

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