Evaluation of Corporate Performance

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Evaluation of Corporate Performance

In 1994, Jeff Bezos was a 30-year-old hedge fund analyst with a degree in computer science and electrical engineering from Princeton University. It was at this time Bezos decided to put his business plan in play. Jeff pulled up a file that had the business model he intended to use, which had been write in early that year in the passenger seat of a 1988 Chevy Blazer (A Retail Revolution Turns 10, 2005). Amazon.com opened its virtual doors on the World Wide Web in July 1995 and offers Earth’s Biggest Selection. The company seeks to be Earth’s most customer-centric company. Amazon.com is now a digital strip mall branching beyond books into music, DVDs, electronics and toys (Penenberg, 2000). Many people
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Amazon common stock is traded on the Nasdaq Global Select Market under the symbol “AMZN.” The below table shows the high and low per share sale prices for its common stock for the periods indicated:

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*Retrieved from Amazon.com Annual Report

Amazon measures compensation cost for stock awards at fair value and recognizes it as compensation expense over the service period for awards expected to vest. The fair value of restricted stock units (RSU) is determined by the number of shares granted and the quoted price of Amazon common stock. In addition, Amazon utilizes the accelerated method rather than the straight-line method for recognizing compensation expense.

Amazon has also seen amazing operational results. The company organizes its operations into two principal segments: North America and International. Below is a table that represents the net sales in each one of these segments (in millions). The organization’s net sales include product and services sales:

[pic]*Retrieved from Amazon.com Annual Report

Amazon product sales represent revenue from the sale of products and related shipping fees and digital content where Amazon is the seller of record. Services sales represent third-part seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activates. The above net sales information is important to understand before
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