Question

Publicly traded companies, including those specializing in e-commerce, are required to file financial data with the Securities and Exchange Commission. By analyzing this information, you can determine the profitability of an e-commerce company and the viability of its business model.

Pick on e-commerce company on the Internet, for example, Buy.com, Yahoo.com, or Priceline.com. Study the web pages that describe the company and explain its purpose and structure. Use the web to find articles that comment on the company. Then visit the Securities and Exchange Commission’s web site at www.sec.gov (Links to an external site.) and select Filings and Forms to access the company’s 10-K (annual report) form showing income statements and balance sheets. Select only the sections of the 10-K form containing the desired portions of financial statements that you need to examine, and download into your spreadsheet. Create simplified spreadsheets of the company’s balance sheets and income statements for the past two years. Create some graphs for quick reference to the data.

Is the company a dot-com success, borderline business, or failure? What information forms the basis of your decision? Why? When answering these questions, pay special attention to the company’s two-year trends in revenues, cost of sales, gross margins, operating expenses, and net margins.

Answer 1

Question: Publicly traded companies, including those specializing in e-commerce, are required to file financial data with the Securities and Exchange Commission. By analyzing this information, you can determine the profitability of an e-commerce company and the viability of its business model.

Pick on e-commerce companies on the Internet, for example, Buy.com, Yahoo.com, or Priceline.com. Study the web pages that describe the company and explain its purpose and structure. Use the web to find articles that comment on the company. Then visit the Securities and Exchange Commission’s web site at www.sec.gov (Links to an external site.) and select Filings and Forms to access the company’s 10-K (annual report) form showing income statements and balance sheets. Select only the sections of the 10-K form containing the desired portions of financial statements that you need to examine, and download into your spreadsheet. Create simplified spreadsheets of the company’s balance sheets and income statements for the past two years. Create some graphs for quick reference to the data.

Is the company a dot-com success, borderline business, or failure? What information forms the basis of your decision? Why? When answering these questions, pay special attention to the company’s two-year trends in revenues, cost of sales, gross margins, operating expenses, and net margins.

Answer:

Fiscal summaries are utilized to assess the exhibition of a business and analyze its qualities and shortcomings. The two essential fiscal reports are pay articulations and accounting reports. The pay explanation, additionally called a working articulation or benefit and misfortune proclamation, shows the pay and costs of a firm over some stretch of time, for example, a year, a quarter, or a month. Net benefit is determined by subtracting the expense of merchandise sold from incomes, or deals. The gross edge is determined by isolating gross benefit by incomes (or deals). Net benefit (or deficit) is determined by subtracting every other cost, including working costs and annual expenses from net benefit. Working costs are all business costs, (for example, consumptions for deals and advertising, general and authoritative uses, and devaluation) other than those remembered for the expense of products sold. Net edges are determined by partitioning net benefit (or deficit) by incomes (or deals).

A monetary record gives a preview of an organization's money related resources and liabilities on a given date, for the most part the end of a bookkeeping period. It records what material and impalpable resources the business claims and what cash the business owes either to its leasers (liabilities) or to its proprietors (investors' value, otherwise called total assets). At some random time a business' advantages approaches the aggregate of its liabilities in addition to its total assets. Current resources incorporate money, protections, records of sales, or different ventures that are probably going to be changed over into money inside one year. Liabilities are extraordinary commitments of the firm. Current liabilities are obligations that are expected inside one year. Long haul obligation comprises of liabilities that are not due until following a year or more. In the event that an excessive amount of obligation has been utilized to back the association's tasks, issues may emerge in meeting future intrigue installments and reimbursing extraordinary advances. By inspecting a progression of accounting reports, one can distinguish and break down patterns in the money related quality of a business.