In 1994 Jeff Bezos started Amazon.com, one of the first online retailer sites and in 1995 he went live on the internet. Jeff Bezos is still the CEO today and his company is growing yearly with many added subsidiaries. Amazon started selling only in American and today it is in over 11 nations and on the rise. We will glance at some of financial information to come to a conclusion of whether Amazon is a sound investment in the present and the future. Next we will look at the three techniques used to assess the financial statement data: horizontal analysis, vertical analysis, and ratio analysis. We will focus on three financial factors: Liquidity Ratios, Profitability Ratios, and Solvency Ratios of Amazon.com during the 2007 and 2008 years. …show more content…
When you calculate the days Home Depot Inventory turnover is 55.3 days and Amazon is 31.7 days.
Profitability
Return of assets= Net income Average asset
Profitability measure earning ratio to the cost incurred and one of the formulas are the profit margin which looks at the net income / net sales. Amazon numbers for 2008 645/19166=3.37% and in 2007 476/14835= 3.21% this looks how sales at Amazons are converted into profit, the bottom line. Another is asset turnover and it deals with how Amazon uses it assets to generate sales and the formula is 19166/8314+6485/2=2.60 times it makes a sales for every dollar it had invested in assets for 2008. In 2007 14835/6485+4363/2=2.74 times these are very good number of asset turnovers. Return on assets deals with how profitable the company is and its formula is: 645/8314+6485/2= 8.71% for 2008 and in 2007 476/6485+4363/2= 8.78 % very profitable numbers. Return on Common Stockholders Equity is how much income is generated for the Stockholders and 645/1197+2675/2=.33 is generated for 2008 and 476/1197+476/2= 58.5 for 2007 and it was an excellent year for Stockholders . Earning per share is the net profit earned on each share of common stock. It reveals the amount the business earned on their stock share investments: 645/428+416/2=1.52 for 2008 and for 2007 476/416+414/2=1.15, is also good. Price ratio is a glimpse into the future of the company. Price Earning
Jeff Bezo’s began Amazon in his garage in July 1995 with three Sun workstations setting on wooden doors for tables and extension cords running from everywhere (Academy of Achievement, 2010). Right from the beginning he was a visionary leaving his well paying job as a senior vice president with D. E. Shaw to begin Amazon.com (Academy of Achievement, 2010). Being the visionary that he is he saw an opportunity prompted by the huge growth rate of internet use in a single year and ran with it never looking back. Jeff realized that the internet had “no real commerce to speak of” so he began researching possible businesses (Academy of Achievement, 2010). “After reviewing 20 mail order businesses and deciding which
Amazon.com Inc. was initiated by Jeff Bezos in 1994 after realizing the rapid rate at which the internet and websites were growing in popularity among business organizations and individuals. In 1995, the company started operating its website for selling books, videos, compact discs, computer software and computer hardware before being incorporated in1996 as an e-commerce company (Reuters, 2015). Apparently, the company offers may products and services for sale; these products include merchandise for resale products offered by third parties. In this regard the
Again, we start with the income statement, where total sales is the denominator in the vertical analysis computation. The first thing you will see is that while Amazon credits three quarters of their total sales to product sales, the service sales category rose nearly eight percent as a portion of total sales over the last three years. To the credit of Amazon, they succeeded in reducing the portion of sales eaten into by expenses from 99% to just under 98%, with the cost of sales decreasing at the greatest rate (among operating expenses). Turning our attention to the balance sheet, total assets (necessarily equal to total liability plus stockholders equity) acts as our denominator for the analysis. We note that current assets make up just over half of the majority of total assets while plant property and equipment still stands out as a momentous portion of Amazon’s worth. Concurrently, while the company’s short-term liabilities have shrunk as a percentage of total assets, their long-term liabilities shot up from 7.95% to 12.58% of total assets. Given an increased reliance on long-term debt, corporate accountants must pay close attention to when the debt will mature to ensure that Amazon can anticipate that expense and address it appropriately. Thanks to vertical analysis, this
The company I have chosen to write about is Amazon. Amazon, was launched on July 16, 1995 by founder Jeff Bezos in his two-car garage in Bellevne, Washington. When Amazon first launched as a website that only sold books, but Jeff Bezos wanted Amazon to be much more than a bookstore, he wanted it to be an everything store. This paper will answer the required questions listed below:
One of America’s greatest start-up success stories is Amazon. Jeff Bezos launched the website in 1995 and he is now having revenues of $61 billion. At the start of e-commerce, Amazon was an innovator of delivering supreme customer service, which at that times was very rare. Amazon is an illustration of massive organising skills, the company sells an enormous range of products, all day, every day, for 365 days a year and is able to maintain over 80 warehousing and fulfilment centres.
Providing customers more of what they want - low prices, vast selection, and convenience - Amazon continues to grow and evolve as a world-class e-commerce platform. “When you order products from Amazon, it arrives on your doorstep in two days, but people don’t think about how.” said George Prest, CEO of a logistics trade group.
Founded in 1994 by Jeff Bezos, the company went online on the World Wide Web in July 1995.Amazon focuses on increasing its market share and revenues in the long term and maintaining competitive costs of profit margins and dividends paid to its shareholders in the short term. Amazon’s sound business fundamentals include its core business and essential revenue sector of e-commerce, a new focus on media independent of Kindle, improved profit margins from Amazon’s Web Services (AWS) as well as the management of a negative cash conversion cycle (Samonas, 2015).
Founder and CEO Jeff Bezos opened the virtual doors of Amazon.com's online store in July 1995. The company was incorporated in 1994 in the state of Washington and reincorporated in 1996 in Delaware. The Company's principal corporate offices are located in Seattle, Washington. Amazon.com completed its initial public offering in May 1997, and its common stock is listed on the NASDAQ National Market under the ticker symbol AMZN. Amazon.com's fiscal year is based on the calendar year, and the last day of the fiscal year is December 31. The closing stock selling price for February 1, 2006 was $43.98. Amazon has never declared or paid cash dividends on its common
The effectiveness of Amazon’s financial management can be seen in the performance over the last 5 years. Largely investor confidence has been very high throughout the 5 years analyzed. This can be seen in the increase of 4 times the stock price. Stock prices were at an all-time high the end of 2013 at price of $405USD each (Morningstar, 2014). Through analysis of the financial statements and history of stock prices it can be determined that the financial management team at Amazon is doing a great job.
Return on Assets ratio= Net Profit before Tax/Total Assets 34,201/74,638=0.4582 4. Net Profit Margin Net Profit Margin = Net income after taxes/revenue 6,214/65,492=0.0949 5. Accounts Receivable Turnover ratio Accounts Receivable Turnover ratio=
Beyond the highly anticipated package delivery drones and the cashier-free grocery stores of Amazon, there are numerous business segments that help Amazon remain as one of the largest online e-commerce marketplaces. Amazon has set up an empire that has enabled it to continue with highly lucrative strategies and business opportunities that continually push it forward. “Amazon is at the beginning of an investment cycle,” one of Morgan Stanley’s financial analysts remarked and also stated “unclear how long this cycle is expected to last.”
Amazon. com would be the global leader inside E-Commerce industry. The company was founded through 1994 by Jeff Bozos having a basic Public Featuring in May 1997, which can be headquartered in Seattle, WA. The company works in two pieces, North America as well as International. With 38. 8% market uncover, Amazon. com characterizes the highly sensibly competitive E-commerce sector. By being a pioneer out there and continuing to get innovative, Amazon. com has found a place among the top 500 companies for this planet according to be able to CNN.
Amazon.com, Inc. is an American multinational company that specializes in providing cloud computing and electronic commerce services to its customers who are evenly distributed all over the world. The company’s headquarters are located at Seattle, Washington in the United States of America. The company was founded in 1994 by Jeff Bezos who acts as the president, chairman and the chief executive officer (CEO) up to date. Currently, the company trades its shares publicly on the National Association of Securities Dealers Automated Quotations (NASDAQ) securities under the stock ticker name NASDAQ: AMZN. The company has under through a series of changes and organizational development over the past two decades. For instance, the company was
Amazon started with Jeff Bezos’ idea on creating a company based around selling on the internet (Int. Directory). In the 1994, Jeff left the Wall Street firm D.E. Shaw, moved to Seattle. There, he created a business plan, from which Amazon was born. Jeff projected a 2,300% of annual web growth over time from selling on the internet. He took the five most profitable products and put them on his stock. At the time, books were a strong suit for Amazon, and where most of their profit came from (Int. Directory). Their competition was Barnes and Noble, who were large retail booksellers dominating the market. By 1995,
This American company is headquartered in Seattle, Washington and was founded by Jeff Bezos in 1995 (amazon.com). Jeff Bezos is a visionary who saw the opportunity to use technology as a platform for retail purchasing, originally books, but soon expanding into nearly any item imaginable that could be shipped (Cuneo, 2000). Mr. Bezos named his company after the world’s longest river, and today, it is easy to see that Amazon’s success and market niche, appears to be flowing abundantly, and streaming excellent customer service.