Watch: Amazon Financial Report: Statements and Ratio Analysis

Run time: 10:01Covers: five years of statements, key ratios, and what the trends meanTaught by: Dr. Paul Borosky, DBA, MBA

What Is a Public Company Financial Analysis?

Answer

A public company financial analysis takes the income statement, balance sheet, and cash flow statement from a company's annual report, lines up several years side by side, and calculates ratios to judge growth, profitability, liquidity, and debt. The goal is a plain verdict: is this company getting stronger or weaker?

Professors assign real companies for one reason. Real numbers are messy. You have to find the right line, deal with odd labels, and explain a trend in your own words. That is the skill employers want, and it is the skill a clean textbook problem never tests.

Public companies are perfect practice because their annual reports are free. Every company that trades on a U.S. exchange files a 10-K with the SEC, so you can check every number Dr. Paul uses.

Which Companies Has Dr. Paul Analyzed?

Here is every company in the video library, sorted by how often students watch it. Click a year to open that video on YouTube. The table covers 23 companies across 68 videos.

CompanyYears (click to watch)What the videos coverVideos
Apple2020, 2021, 2022, 2023, 2024Five-year statements and ratio summary, beginner's guide walk-through, short lessons on COGS, cash, and liquidity ratios9
Amazon2020, 2021, 2022Five-year statements and ratio summary, beginner's guide walk-through, short lessons on COGS, cash, and liquidity ratios10
Tesla2020, 2021, 2022Five-year statements and ratio summary, beginner's guide walk-through, short lessons on COGS, cash, and liquidity ratios10
Starbucks2020, 2021, 2022Five-year statements and ratio summary, beginner's guide walk-through, short lessons on COGS, cash, and liquidity ratios7
Nike2020, 2021, 2022Five-year statements and ratio summary, beginner's guide walk-through, short lessons on COGS, cash, and liquidity ratios6
Walmart2021, 2022Five-year statements and ratio summary, beginner's guide walk-through3
Coca-Cola2020, 2021Five-year statements and ratio summary2
McDonald's2020, 2021Five-year statements and ratio summary2
Netflix2020, 2022Five-year statements and ratio summary, beginner's guide walk-through2
Disney2020, 2022Five-year statements and ratio summary, beginner's guide walk-through2
Costco2020, 2022Five-year statements and ratio summary, beginner's guide walk-through2
Intel2021, ReportFive-year statements and ratio summary, beginner's guide walk-through2
General Motors2021Beginner's guide walk-through1
Ford2021Beginner's guide walk-through1
Boeing2021Beginner's guide walk-through1
Alphabet (Google)2021Beginner's guide walk-through1
Microsoft2022Beginner's guide walk-through1
Darden Restaurants2022Beginner's guide walk-through1
FedEx2022Beginner's guide walk-through1
Meta (Facebook)2021Beginner's guide walk-through1
Walgreens2022Beginner's guide walk-through1
AT&T2021Beginner's guide walk-through1
Southwest Airlines2021Beginner's guide walk-through1

New to this? Start with a company you already buy from. Apple, Nike, and Starbucks are easy to picture, which makes the numbers easier to explain.

How Do You Analyze a Company in Five Steps?

This is the same order Dr. Paul uses in every video. Follow it and your paper writes itself.

  1. 1

    Pull the statements and line up the years

    Download the 10-K. Copy revenue, cost of goods sold, net income, total assets, liabilities, and equity for at least three years into one sheet. Not sure what each line means? Start with how to read financial statements.

  2. 2

    Read the income statement for growth and margin

    Is revenue rising? Is gross profit keeping pace? See how to read an income statement for each line in order.

  3. 3

    Read the balance sheet for strength

    Compare what the company owns to what it owes. Watch cash, inventory, and debt over time. See how to read a balance sheet.

  4. 4

    Calculate the ratios

    Liquidity first, then profitability. Use current ratio vs. quick ratio and ROA vs. ROE, and keep the financial ratios cheat sheet open.

  5. 5

    Write the verdict

    One paragraph per area: growth, profitability, liquidity, debt. Every claim gets a number. End with a single sentence: stronger, weaker, or mixed, and why.

Dr. Paul's Insight

Students lose the most points on step five, not step four. Calculating a ratio is easy. Explaining why it moved is the grade. If the current ratio dropped, say what caused it: more short-term debt, less cash, or a big inventory swing.

What Are the Most Common Company Analysis Mistakes?

  • Analyzing one year. A single year tells you nothing about direction. Use three to five years.
  • Listing ratios with no explanation. A table of numbers is not an analysis. Every ratio needs a sentence on what it means.
  • Comparing across industries. A grocery chain and a software company have very different margins. Compare a company to itself and to direct competitors.
  • Mixing fiscal years. Many companies do not end their year in December. Check the fiscal year end before you line up the columns.
  • Copying the wrong line. Net sales, total revenue, and operating revenue can sit on different lines. Read the labels, not just the position.

How a Student Uses a Company Analysis Video

Group Project

A practice dataset, solved before the real one

Your team gets a practice set first. These are example numbers, not a real company: revenue grew from $40.0 billion to $46.0 billion. Growth = ($46.0B − $40.0B) ÷ $40.0B = 15%.

Current assets are $28.0 billion, inventory is $9.8 billion, and current liabilities are $14.0 billion. Current ratio = $28.0B ÷ $14.0B = 2.0. Quick ratio = ($28.0B − $9.8B) ÷ $14.0B = 1.3.

Then each teammate watches one company video above and checks the method against Dr. Paul. Same steps, same order. When the real company arrives, nobody is guessing where to start.

More Videos in This Series

Apple Financial Analysis: COGS and Current Ratio

Dr. Paul digs into Apple cost of goods sold and liquidity across five years. (8:35)

Tesla Financial Report: Statements and Ratio Analysis

Five years of Tesla statements summarized, with the ratios that matter most. (8:56)

Walmart Financial Report: Statements and Ratio Analysis

Dr. Paul walks through how a giant retailer looks on paper over five years. (7:52)

Company Analysis Questions Students Ask

Where do I find a public company's financial statements?
Look up the company's 10-K on the SEC EDGAR website or the investor relations page of the company's own site. The 10-K holds the income statement, balance sheet, and cash flow statement for the last few years. It is free.
How many years should a financial analysis cover?
Use at least three years, and five if you can. One year shows a snapshot. Several years show direction, and direction is what your analysis is really about.
Which financial ratios should I include in a company analysis?
Cover four areas: liquidity (current and quick ratio), profitability (gross margin, net margin, ROA, ROE), efficiency (asset turnover), and debt (debt to equity). Pick one or two from each area and explain them well instead of listing twenty.
What is the difference between a financial report and a financial analysis?
A financial report organizes the numbers: statements lined up, ratios calculated. A financial analysis explains them: why margins moved, whether debt is a risk, and what it means for the company. Your professor wants both.
Can I compare two companies in different industries?
You can, but be careful. Industries run on different margins and different amounts of debt. Compare a company to its own history and to direct competitors first, then add cross-industry notes only if you explain the difference.
Beginner's Guide to Understanding Financial Statements and Financial Ratios book cover

See every ratio worked out on a real 10-K.

Dr. Paul's Beginner's Guide to Understanding Financial Statements and Financial Ratios uses Apple's actual numbers to walk through each statement and ratio in plain English, the same way he teaches it in class.

Get the Book →

Written by Dr. Paul Borosky, DBA, MBA, current college professor, business consultant, and author with 14+ years and 1,000+ businesses served.

This page is for general educational purposes only. It is not financial, investment, legal, or tax advice.