Question

analysis line 17 to 21

RATIOS ANALYSIS

Management Effectiveness (%)	E. commerce	Amazon	EBay
17) Return On Assets	7.16%	7.34%	8.61%
18) Return On Investment	9.71%	11.66%	10.41%
19) Return On Equity	15.72%	21.12%	34.55%
Dividends
20) Dividend Yield	17.20%	0	1.39%
21) Payout Ratio	0.02%	0	12.60%

Answer 1

Return on asset shows how efficiently, a company is able to use its assets to produce the earnings. It can be seen that both Amazon and e-bay return on assets are higher than the e-commerce industry which means the assets of these company's are managed better than the industry. Also, since ROA of Ebay is higher than the ROA of Amazon, therefore Ebay is more efficient in utilizing the assets of the company.

The return on investment tells about the profitability of total investment. Amazon return on investment is better than the Ebay shows Amazon is generating more profit per unit of investment than E-bay.

Return on equity for E-bay is higher than the Amazon, it means E-bay is generating a better return for its shareholder's than Amazon.

Dividend payout and dividend yield for the Amazon is zero which shows amazon is not paying any dividend and reinvesting its earnings in its growth. Thus the amazon have profitable projects in future than e-bay.