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Amazon Case Essay Sample

Amazon Case Pages
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Amazon became a publically traded company in October 1995. In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at a price of $18.00 per share in the U.S. ($1.50 after three stock splits in the late 1990s Wikipedia). Amazon’s initial business proposal was different they it did not expect to make a profit for four to five years. This “slow” growth caused stockholders to complain about the company not reaching profitability fast enough to justify investing in, or to even survive in the long-term. When the dot-com era grew the start of the 21st century, destroying many e-companies in the process, Amazon survived, and grew on past the epic era to being one of the biggest company in online sales. Amazon made its first profit in the fourth quarter of 2001 with $5 million in shares and more than $1 billion revenue. Amazons profit was very modest but it proved to the skeptics that this unusual business plan could succeed.

Since 1994 Amazon has continue to grow and flourish as they continually add new merchandise to the site. As of December 2014 the total assets were in the millions to be exact $54,505 million. Total assets are important because it informs the stockholder about the earning and growth of the company. For example Amazon’s 2014 annual report listed its total assets as $54,505 million and the previous year it was listed at $40,159 million. This report establishes the continuous growth in the company year to year that’s a positive $14,346 million in earned revenue. The cash and cash equivalent at the end of the 2014 year end reported at $14,557 million. The previous year 2013 grossed $8,658 million another year of growth of Amazon. (The principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $17.4 billion, $12.4 billion, and $11.4 billion as of December 31, 2014, 2013, and 2012. Cash and cash equivalents also reflects net proceeds from the issuance of $6.0 billion of long-term debt as of December 31, 2014. Amazon Annual Report 2014) (An asset such as property or stock that has a realizable cash value equivalent to a specific sum of money. An asset that is so easily and quickly convertible to cash that holding it is essentially equivalent to holding cash. A Treasury bill is a cash equivalent. Copyright © 2003 by Houghton Mifflin Company).

Accounts payable in 2014 was listed at $16,459 and the previous year 2013 $15,133. Amazons net revenue or the last three annual reporting in 2014 is $88,810 million in 2013 it was $73,707 million and 2012 $60,414 million. (Net sales include product and service sales. Product sales represent revenue from the sale of products and related shipping fees and digital media content where we record revenue gross. Service sales represent third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities such as AWS, advertising services, and our co-branded credit card agreements. Amazon Prime membership fees are allocated between product sales and service sales and amortized over the life of the membership according to the estimated delivery of services. Amazon Annual Report 2014) in just a decade from 2000-2010, Amazon has created a clientele of more than 30 million people.

Amazon.com is basically a retail site with a sales revenue model. Amazon makes its money by taking a small percentage of the sale price of each item that is sold through its website. Companies pay Amazon to advertise on their site. They profit from both selling others companies items as well advertisement. Based on the information provided any potential investors would appreciate the growth that Amazon has made. The net gross over the last three years is amazing and is definitely something that potential investors could appreciate. The annual report shows that the assets are higher also that the debt is shrinking. The company is company is continuing to add merchandise and the customer service is great. Amazon has become such a successful company because the management is excelling.

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