Use this 10K report from 2018 to calculate Amazon's Net Profit Margin Ratio. Please show your...

Use this 10K report from 2018 to calculate Amazon's Net Profit Margin Ratio. Please show your work. https://fintel.io/doc/www.sec.gov/Archives/edgar/data/1018724/000101872418000005/amzn-20171231x10k.htm

Do you think they are a well-run company after viewing their financial statements and reading through the note in the 10k?

Solutions

Expert Solution

REPORT FROM 2018 INDICATES

THE NET REVENUES OF $177866(million)

THE NET PROFIT OF $3033(million(

NET PROFIT MARGEIN =

= 3033/177866 = 0.0170

i,e = 1.70%

Report Analysis

1.Revenue has increased close to 1.5 timesin last four years .

2.The balance sheet is getting stronger indicating asound financial positions .

3. Strategic acquisitions and backward and forward integrations may result in higher margins in the coming years .

4.Net margins are under pressure due to high variable costs which the company seeks to cut down in the near future .

5.The company has invested a lot in R&D and is coming out with new and unique product portfolio every year only to expand margins .

6. The comapany's India operations which is assumed to be the largest market for e-commerce business is expanding aggresively giving tough competition to local born businesses .

7.Company's share prices has made all time new highs inm The fouth Quarter which signal that in near future the stock will be on an up move only to maximize shareholder's wealth .

Therefore considering the above pointsand the 10-k report , The company is being run well .

jeff jeffy answered 1 year ago

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