Analyzing Amazon

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Resources: Analyzing Amazon document.

Write a 700-word paper.

The incredible growth of has put fear into the hearts of traditional retailers. Amazon's stock price has soared to amazing levels. However, it is often pointed out in the financial press that it took the company several years to report its first profit.

Calculate free cash flow for Amazon for the current and prior years.

Evaluate its ability to finance expansion from internally generated cash.

Thus far, Amazon has avoided purchasing large warehouses. Instead, it has used those of others. It is possible, however, that in order to increase customer satisfaction, the company may have to build its own warehouses. If this happens:

  • Describe how your impression of its ability to finance expansion change.
  • Project any potential implications of the change in Amazon's cash provided by operations from the prior year to the current year.

Analyzing Amazon Version 12 Material Analyzing Amazon Financial Information $ in Millions Current Year Prior Year Current assets $31,327 $24, 625 Total assets 54,505 40,159 Current liabilities 28,089 22,980 Total liabilities 43,764 30,413 Cash provided by operations 6,842 5,475 Capital expeditures 4,893 3,444 Dividends paid -- -- Net income (loss) (241) 274 Sales 88,988 74,452 References Kieso, D.E., Weygandt, J.J., Warfield, T.D.(2016). Intermediate Accounting. (16th ed.). John Wiley & Sons. p. 256 1

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School: Duke University

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Analyzing Amazon




Analyzing Amazon

Free cash is defined as business financial performance measurement based on
the company's cash that is capable of producing. All the same, this after using the
money that was meant for retaining operations or increasing its assets. Amazon is one
of the companies that have displayed this concept through the growth of earnings. This
may occur as a result of capital investments that are crucial to the growth that may
surpass the present cash value that flows from the investments. The company has seen
significant growth thus overtaking traditional retailers. In fact, the stock price in the
company has risen to amazing levels. All the same, the company did just start making
profits, as it took several years before announcing its first profits (Kieso, Weygandt,
Warfield, 2016). The first four years of its operations in the income sta...

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