The comprehensive financial reports for Amazon

The comprehensive financial reports for Amazon, Inc. would be very important to numerous individuals and companies. The main objective of financial reporting is to convey truthful and relevant information regarding a company to any that may be interested in the company. This comprehensive report is composed of four statements that combine to bridge the information gap between those that internally control the company and those who have no direct control. To understand why there are four different types of statements included in the comprehensive report, one must understand who the various stakeholders, or interested parties, are and what information is of interest to them.
All interested parties are called stakeholders; they can be almost anything from a department manager, an owner or executive management to a bank lender, product vendor or investor. Each party needs this information to make informed decisions regarding this company. The owner wants to know that the company is financially secure so future goals can be planned. A department manager might want to know if the company made a profit goal for the year; this manager may receive a bonus based on that profit margin. The executive management of the company will want this information to work with the owners in planning the future of the company; maybe it will be a new product release or an efficiency upgrade to the assembly line. The banker will want to know this information to decide whether to lend money to the company to facilitate the efficiency upgrade on the assembly line. The product vendor wants to know if the company is profitable, so he can increase their credit limit on purchasing raw products. Even the investors need to know the financial information to make their best-informed decision on how to invest in the company or if needed sell some of their investment to others.
The four statements in the financial report are the balance statement, the income statement, the statement of cash flows, and the statement of stockholder’s equity. Each of these statements provides a different look at the company’s financial status. The balance statement is a snapshot on a specific date of the “balance” between what a company owns and what they owe to creditors and to investors. Second, the income statement shows the performance of the company over a period of time by detailing the money earned and the cost of business which then reports the net income or net loss. Next, the statement of cash flows shows how cash flowed into and out of the company during a period time. The last part is the statement of owner’s equity which reflects the owners’ claims on the company during that period of time. Each of these statements complements the other by provided a different look at the same big picture.
Since Amazon is a publicly traded company, it is regulated by the Securities Act of 1933 under the jurisdiction of the Securities and Exchange Commission. (Securities and Exchange Commission, 2018) This legislation requires that Amazon complete these necessary filings to convey this information to its stakeholders. This oversight is to protect the public and the trade markets from false information that misleads investors and management. That would be like buying a house when the owner does not have to tell you the location or condition of the house!