Question

I would like for the project to be on Amazon

The Project to be addressed by the Paper:

You have just graduated from Keiser University’s MBA program and have secured a position as a fund manager for a well known investment banking house. You have been given $25 million to manage/invest in a single stock. The fund is a pension/retirement fund so its perspective is long term with moderate risk of loss of capital and a required return of 9% per annum. Your assignment is to determine if the fund you are managing should invest $25 million dollars in the stock of the company you have selected for your first analysis/investment decision. Select a publicly traded US based company. Do not select a bank or financial intermediary (i.e Investment Bank, Insurance Company, Brokerage House etc). Your decision to invest or not invest will be supported by the research paper and a Power Point Presentation.

NOTE: Most of the data needed for this assignment can be found in Yahoo/finance. Go to Yahoo/finance, select your company, and view the table of contents on the left side of the page.

Your analysis, based on the concepts covered in this course, will address each of the following:

1.      Business Strategy Analysis: Develop an understanding of the business and

               competitive strategies of the company. Which of the three generic competitive

               strategies does the company utilize (low cost provider, differentiation, focus)?   This should be covered in not more than three paragraphs. Do not spend time

               writing a history of the company. This is an analysis, not a history lesson.

2.      Accounting Analysis: Do the accounting practices adopted by the company

generally reflect an accurate picture of the economic performance of the

company? Did your research find any public announcements of restatement of earnings or other financial statements that would indicate that the financial statements may be of dubious value? This can be done by reviewing the company's 8K filings with the SEC (a mandatory requirement for this paper). These filings can generally be found on the company's website under Investor Relations - SEC filings.

3.      Financial Analysis: Analyze financial ratios and cash flow measures of the

company relative to its historical performance. For purposes of this research paper a 2 year look back is sufficient and required. You must use at least 10 of the ratios noted on page 119 of the text including all four of the profitability ratios. (Liquidity: Current; Quick; Total assets assets turnover; fixed assets turnover; Days sales outstanding (DSO); Inventory turnover; Debt-to-assets ratio; Times-interest-earned; profit margin on sale; Basic earning power; return on total assets

4.      Prospective Analysis: Develop forecasted performance measures and list the   

assumptions associated with your forecast. List your assumptions and reasons for your forecast. You may also cite the works of other analysts who have published forecasted earnings for the time frame you are addressing. (Hint: take a look at Yahoo/finance - analysts opinion

5.      Conclusion: Will you or will you not invest $25 million in this particular

Company? Support your conclusion? Remember a negative conclusion is just as valid and valuable as a positive conclusion.

Answer 1

Amazon is a leading player in online shopping, e-commerce and cloud computing business. It is based on Washington, USA. It was founded in 1994. It is the largest online retailer in the world by its revenues and market capitalization.

Amazon's Business Strategy Analysis- Amazon's vision statement is, "Focusing on customers' experience by offering them low cost and quality products". No doubt, Amazon has been able to provide the products at low cost. It provides the best seller and quality products. Amazon sells variety of products including clothing, footwear, accessories, electronic items, white goods, home and personal care products. Its success depends upon the concept of "selling everything that can be easily sold online". It spends money on R&D and testing of the products. Amazon asks for reviews and personalized recommendations to improve its online and delivery services. These all strategies work for his success.

Financial Analysis- I am analyzing the ratios of December, 2017 from the previous year.

Current Ratio- Its current ratio is 1.04 that is same as the previous year, it tells company's liquidity position is good because current ratio, if greater than 1, is good.

Quick Ratio- It is .70 in 2017, it has slightly came down from previous year that was .74.

Fixed assets turnover- It is 3.64 in 2017 that has come down from 2016 (4.67) and 2015 (4.90) but overall the ratio is good.

Inventory turnover- It is 6.90 in 2017 that has come down from previous year, i.e. 7.70.

Debt to Equity ratio- It is 1.59 that is higher in 2017 as compare to 2016. Higher ratio is not good, it shows heavy debt in company's capital structure. Ratio below 1, is considered good ratio.

Times interest earned ratio- This ratio is 5.48 that has come down from previous year, it shows that company is not very much able to pay its interest expenses as compare to the previous year.

Net Profit margin- Its net profit margin is 2% that is same as 2016.

Earning per share- Its EPS is 6.15, that was 4.9 in 2016 and 1.25 in 2015, so this year EPS has increased.

Return on Equity- Its after tax ROE is 11% that came down from previous year, i.e. 12%

Conclusion- Overall, company's financial position is good. It is fundamentally strong company. It will grow in the future so You should invest your money into this company, if not $25 Million then atleast less amount.

Thanks, Please provide ratings.