Embedded Files
STEP 2: Guided Group Work - Live Static Liquidity Calculator
STEP 2: Guided Group Work - Live Static Liquidity Calculator
Open your company's 2025 Annual Report PDF, extract the 7 balance sheet items ([CA] Current Assets, [INV] Inventories, [CASH] Cash, [CL] Current Liabilities), and calculate the 6 liquidity ratios in whole percentages.
📋 WORKFLOW FOR TEAMS 1–5: Paper First, Screen Second!
Use your printed paper worksheet as a scratchpad to extract the Y2025 figures from the PDF report and calculate your ratios. Once you have written down and rounded your answers on paper (whole numbers only, no decimals!), transfer them into the interactive online form below and click Check until every box turns 100% Green! Keep your paper worksheet ready for our live classroom comparison!
Guided Exercise (Team 4 - AMAZON): Static Financial Liquidity Ratios
Guided Exercise (Team 4 - AMAZON): Static Financial Liquidity Ratios
Goal: Check Amazon's short-term static financial liquidity (Current Ratio [CR], Quick Ratio [QR], and Cash Ratio [CashR]), navigate the US GAAP "upside-down" Balance Sheet, examine the Inventory Share [INV / CA], and calculate its long-term solvency using the Golden [E / NCA] and Silver [PC / NCA] Balance Sheet Rules.
Worked Example: Step-by-Step for 2024 (Page 50 of PDF / Page 39 of 10-K)(⚠️ US GAAP Warning: In American reports, Current Assets [CA] and Cash [CASH] are at the very TOP of the Balance Sheet!)
STEP 0: OBTAIN THE ANNUAL REPORT HERE
STEP 1: Extract 7 Balance Sheet Items in 2024 (in USD million, Dec 31, 2024 column):
STEP 1A: Short-Term Working Capital Items (4 Items):
[CA] TOTAL CURRENT ASSETS (Page 50 PDF, top section subtotal: Total current assets): 190,867
[INV] INVENTORIES (Page 50 PDF, under Current assets: Inventories): 34,214
[CASH] CASH AND CASH EQUIVALENTS (Page 50 PDF, very first top line: Cash and cash equivalents): 78,779
[CL] TOTAL CURRENT LIABILITIES (Page 50 PDF, middle section subtotal: Total current liabilities): 179,431
STEP 1B: Long-Term Balance Sheet Items (3 Items):
[NCA] NON-CURRENT ASSETS (Page 50 PDF: Total assets 624,894 minus Total current assets 190,867): 434,027
[E] SHAREHOLDERS' EQUITY (Page 50 PDF, lower section: Total stockholders' equity): 285,970
[LTD] NON-CURRENT LIABILITIES (Page 50 PDF, sum of 3 lines below Total current liabilities: 78,277 + 52,623 + 28,593): 159,493
STEP 2: How All 6 Static Liquidity Ratios are calculated (2024 Example):
STEP 2A: 4 Short-Term Liquidity Ratios (2024):
Current Liquidity Ratio -- CR (Norm: 120% to 200%, or 1.2x to 2.0x): ([CA] / [CL]) * 100% = (190,867 / 179,431) * 100% = 106.4% -> 106% (1.06x) -> SLIGHTLY BELOW 120% (Fast E-Commerce Turnover)
Quick Liquidity Ratio / Acid-Test -- QR (Norm >= 100%, or >= 1.0x): (([CA] - [INV]) / [CL]) * 100% = ((190,867 - 34,214) / 179,431) * 100% = 87.3% -> 87% (0.87x) -> SLIGHTLY LOW (< 100%)
Cash Liquidity Ratio -- CashR (Norm >= 20%, or >= 0.2x): ([CASH] / [CL]) * 100% = (78,779 / 179,431) * 100% = 43.9% -> 44% (0.44x) -> SAFE (>= 20%)!
Inventory Share in Current Assets -- INV / CA (%): ([INV] / [CA]) * 100% = (34,214 / 190,867) * 100% = 17.9% -> 18% (Quick Assets Share = 82% -- algorithmic warehouse automation!).
STEP 2B: 2 Long-Term Balance Sheet Rules (2024): 5. Golden Balance Sheet Rule -- E / NCA (Norm >= 100%, or >= 1.0x): ([E] / [NCA]) * 100% = (285,970 / 434,027) * 100% = 65.9% -> 66% (0.66x) -> LOW (< 100%) (AWS data centers and logistics hubs are co-financed with long-term bonds and leases). 6. Silver Balance Sheet Rule / Maturity Matching -- PC / NCA (Norm >= 100%, where Permanent Capital [PC] = [E] + [LTD]): (([E] + [LTD]) / [NCA]) * 100% = ((285,970 + 159,493) / 434,027) * 100% = 102.6% -> 103% (1.03x) -> PASS! (Permanent Capital covers 100% of Non-Current Assets; positive Net Working Capital NWC = [CA] - [CL] > 0).
Your Turn: Task for Team 4 (Calculate 2025 -- 13 Tasks!) Look at the December 31, 2025 column on Page 50 of the PDF and complete the exact same steps for 2025 (enter whole numbers and round percentages to whole numbers, no decimals):
STEP 1A: Find the 4 Short-Term Working Capital Items for 2025 (in USD million):
[CA] TOTAL CURRENT ASSETS (Page 50 PDF, top section: Total current assets) = ....................
[INV] INVENTORIES (Page 50 PDF, under Current assets: Inventories) = ....................
[CASH] CASH AND CASH EQUIVALENTS (Page 50 PDF, very first top line) = ....................
[CL] TOTAL CURRENT LIABILITIES (Page 50 PDF, middle section: Total current liabilities) = ....................
STEP 1B: Find the 3 Long-Term Balance Sheet Items for 2025 (in USD million):
[NCA] NON-CURRENT ASSETS (Page 50 PDF: Total assets 818,045 minus Total current assets 229,083) = ....................
[E] SHAREHOLDERS' EQUITY (Page 50 PDF, lower section: Total stockholders' equity) = ....................
[LTD] NON-CURRENT LIABILITIES (Page 50 PDF, sum of 3 lines below Total current liabilities: 88,185 + 65,618 + 35,172) = ....................
STEP 2A: Calculate the 4 Short-Term Liquidity Ratios for 2025 (whole %, no decimals):
Current Ratio -- CR (%) = ([CA]_2025 / [CL]_2025) * 100% = .......... % (Low <120%, Optimal 120%-200%, or Over-liquid >200%?)
Quick Ratio -- QR (%) = (([CA]_2025 - [INV]_2025) / [CL]_2025) * 100% = .......... % (Pass >= 100% or Low?)
Cash Ratio -- CashR (%) = ([CASH]_2025 / [CL]_2025) * 100% = .......... % (Safe >= 20% or Low?)
Inventory Share -- INV / CA (%) = ([INV]_2025 / [CA]_2025) * 100% = .......... % (Quick Assets = 100% - #4)
STEP 2B: Calculate the 2 Long-Term Balance Sheet Rules for 2025 (whole %, no decimals): 5. Golden Balance Sheet Rule -- E / NCA (%) = ([E]_2025 / [NCA]_2025) * 100% = .......... % (Pass >= 100% or Low < 100%?) 6. Silver Balance Sheet Rule -- PC / NCA (%) = (([E]_2025 + [LTD]_2025) / [NCA]_2025) * 100% = .......... % (Pass >= 100% / Positive NWC > 0 or Low?)
Page updated
Report abuse