A Comparative Analysis of Overstock and Amazon

9580 Words Nov 14th, 2012 39 Pages
Financial Reporting, Analysis and Ethics:
A Comparative Analysis of Overstock.com and Amazon

Robert Baird
BU7545
Fall 2011
Financial Reporting, Analysis and Ethics:
A Comparative Analysis of Overstock.com and Amazon

Robert Baird
BU7545
Fall 2011

Table of Contents | | | Executive Summary | 2 | | | Company and Industry Information | 3 | | | Accounting Issues | 6 | | | Accounting Policies and Disclosure Practices | 9 | | | Financial Statement Analysis | 10 | | | Corporate Governance | 13 | | | Conclusion | 15 | | | References | 18 | | | Appendices | 21 |

Executive Summary This paper covers the accounting errors related to freight costs that led Overstock.com in 2006
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Overstock does ship goods to suppliers on consignment, and includes car and real estate listings, insurance quotes and an online auction service on its website. Amazon was originally incorporated in Washington in 1994 and later reincorporated in the state of Delaware in 1996. Amazon.com (Amazon), like Overstock is an online retailer that sells all sorts of different products and merchandise on its website. According to Mergent Online, the products on Amazon’s website “primarily include merchandise and content purchased for resale from vendors and those provided by party sellers, and it also manufactures and sells the Kindle e-reader” and they also provide “services such as Amazon Web Services (AWS), fulfillment, miscellaneous marketing and promotional agreements, such as online advertising and co-branded credit cards. Amazon consists of two separate business segments, North America and International. North America consists of “amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused websites such as www.amazon.com and www.amazon.ca and include amounts earned from AWS” and includes the export sales from the above mentioned websites (Mergent Online, 2011). The International business segment consists of “amounts earned from retail sales of consumer products (including from sellers) and subscriptions
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