Case Study – Amazon.Com, Inc – Retailing Giant to High-Tech Player?

1209 Words Nov 20th, 2015 5 Pages
Case 9 in your textbook * Answer the all of the questions at the end of the case study
Case Study – Amazon.com, Inc – Retailing Giant to High-Tech Player? 1. Complete a table on key ratios: * Current Ratio - Current Ratio = CA/CL
What the current ratio does measures if the firm has enough resources to pay its debts over the next 12 months. Comparing current assets to current liabilities. Current Assets | Current Liabilities | Cash $10,500 | Accrued Expenses $6,000 | Credit receivables $11,000 | Accounts payable $7,000 | Inventories $15,000 | Taxes Payable $ 12,000 | Prepaid Expenses $16,000 | Current Mortgage $30,000 | Accounts Receivables 7,000 | | Marketable Securities $3,000 | | Total $62,500 |
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Well if you take a look back when it first started back in the year of 94 it began as an online bookstore and nothing else. It started with a slow growth that even stockholder complained about not making enough profit within a certain time frame. The made a quick turnaround as dotcom bubble soared prices higher since the internet became more popular with online shopping. With this turn in events they decided to bring more into the equation by selling electronics, videos, mp3, and consumer electronics such as the kindle family and so on. By doing so they provide a more variety of items to draw more revenue. * The kindle is a series of e-book readers that is marketed by Amazon. This device is dedicated to download, shop, read e-books, newspapers, and any other digital media that permits via wirelessly. This by far is the most common and popular way to view this type of media and is also the most top-selling item amazon has to offer. So this must seem that this brings in profits to Amazon while selling the kindle at a cheap price? Not necessarily, you have to consider what goes into play while these devices are in the making. In a 2010 study by iStuppi it was estimated that the total cost of materials to make the 3G kindle was at $155.56 which is $33 dollars less then what they sell for. iStuppi didn’t include cost of software, licensing, royalties, other manufacture expenses. This might raise suspicion that the Amazon might be taking a slight of a loss. However,…

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