Question

Please comment on Alibaba current Revenue, Profit Margin, Earning ,EBITDA and Price/Earning ratio affect the profitability of the company

Answer 1

Alibaba is a Chinese E-Commerce player which has a market expanded to entire American market along with European Markets and other Asian subcontinent so it is having a global presence.

The revenues of Alibaba is almost consolidated 72 billion dollars and it is is one of the largest business to business platform in the world.

Profit margin of Alibaba is around 50% which is is reflecting that this company is operating at a very high profit margin and it is having a higher operating profit margin as well.

price to earning ratio of Alibaba is around 40 which is in line with the electronic commerce industry but it is way below the likes of Amazon which has a price to earning ratio of 123.

It can be overall interpreted that Alibaba has been able to generate a higher amount of sales which had led into a better management of its cost and profit margins which is reflecting upon the profitability of the company because the profitability of the company is also around 20 billion dollars which is reflecting that these sales are translating into profit and company is not incurring a lot of cost when the management of cost is very sound.

hence this company to effectively managing its operation in order to maximize its profits.