Discussion Response

Q1. Select two retailing companies in the same industry and go online to their annual report. Calculate inventory turnover, gross profit percentage, Current Ratio, Debt Ratio, for both and conclude to the class which company you feel is the stronger overall of the two and why.

Q.2 Discuss three areas where accountants and auditors need to be aware of fraud and suggest ways how they can detect fraud and what they could suggest to management to implement in the form of internal controls to lessen the occurrence of fraud and to be able to detect it early on if it does happen.

Q.3 Go to Amazon.com financial statements. Why are capital stock and retained earnings shown separately in the shareholders equity section of the balance sheet? How much of Amazon’s preferred stock was outstanding in their latest annual report? How can you tell? Examine Amazon’s balance sheet. Which stockholders equity account increased the most during its latest year and what caused that increase? Lastly, would it be meaningful to compute Amazon’s return on equity? Explain your answer.