Editing Amazon.com, Inc.
The edit can be undone. Please check the comparison below to verify that this is what you want to do, and then publish the changes below to finish undoing the edit.
Latest revision | Your text | ||
Line 44: | Line 44: | ||
}} | }} | ||
Amazon's mission is to be the most customer-centric company, the best employer, and the safest workplace on Earth. | |||
The company prioritises customer satisfaction and employee well-being, guided by principles such as customer obsession, passion for invention, operational excellence, and long-term thinking. Amazon operates in various segments, including e-commerce, cloud computing services (Amazon Web Services), digital content, logistics and delivery, smart home devices, grocery and food delivery, healthcare, entertainment and media, advertising, and consumer electronics. | The company prioritises customer satisfaction and employee well-being, guided by principles such as customer obsession, passion for invention, operational excellence, and long-term thinking. Amazon operates in various segments, including e-commerce, cloud computing services (Amazon Web Services), digital content, logistics and delivery, smart home devices, grocery and food delivery, healthcare, entertainment and media, advertising, and consumer electronics. | ||
Line 51: | Line 52: | ||
Amazon faces competition in different segments from players such as Walmart, Apple, Google, and Alibaba. Amazon is also involved in initiatives related to renewable energy, satellite network (Project Kuiper), industrial innovation, lending, and has a strong leadership team guiding its operations. Despite some financial challenges, Amazon continues to invest in its infrastructure, logistics capabilities, physical assets, and strategic acquisitions to maintain its market leadership and drive innovation. | Amazon faces competition in different segments from players such as Walmart, Apple, Google, and Alibaba. Amazon is also involved in initiatives related to renewable energy, satellite network (Project Kuiper), industrial innovation, lending, and has a strong leadership team guiding its operations. Despite some financial challenges, Amazon continues to invest in its infrastructure, logistics capabilities, physical assets, and strategic acquisitions to maintain its market leadership and drive innovation. | ||
<!-- Add information to this summary section about the company's valuation and risks. Also, add references to each paragraph/sentence. --> | <!-- Add information to this summary section about the company's valuation and risks. Also, add references to each paragraph/sentence. --> | ||
== Mission Statement == | == Mission Statement == | ||
Amazon's | Amazon positions itself with three primary objectives: to be the Earth's most customer-centric company, its best employer, and its safest workplace. These ambitions are informed by four governing principles that shape the company's actions and policies. These principles are: prioritizing customer needs above competitor focus; fostering a passion for invention; committing to operational excellence; and endorsing long-term thinking. | ||
The emphasis of these principles is the well-being and satisfaction of its stakeholders, including customers and employees. Amazon's business strategies are structured around these objectives, aiming to sustain a competitive advantage in the marketplace through a continuous focus on these principles. | |||
== Segments covered by Amazon == | == Segments covered by Amazon == | ||
Line 77: | Line 66: | ||
Through its dedicated cloud computing platform, Amazon Web Services (AWS), Amazon offers a range of services to businesses and individuals, including: | Through its dedicated cloud computing platform, Amazon Web Services (AWS), Amazon offers a range of services to businesses and individuals, including: | ||
# | # Infrastructure as a Service (IaaS): This service allows users to access virtual servers, storage, and networking capabilities, eliminating the need for physical hardware. | ||
# | # Platform as a Service (PaaS): This service provides users with the ability to develop applications using pre-configured platform templates. | ||
# | # Software as a Service (SaaS): This service enables users to utilize specific applications without the need for outright purchase or installation. | ||
=== Digital Content === | === Digital Content === | ||
Amazon provides an extensive array of digital content platforms tailored to cater to a range of interests: | Amazon provides an extensive array of digital content platforms tailored to cater to a range of interests: | ||
# | # Amazon Prime Video: A streaming service featuring an expansive library of movies and TV shows, offering both popular hits and Amazon's original productions. | ||
# | # Amazon Music: A platform catering to music enthusiasts, streaming a diverse selection of songs across various genres. | ||
# | # Kindle: A dedicated platform for book lovers, delivering a vast collection of e-books spanning numerous categories, from contemporary fiction to academic texts. | ||
=== Logistics and Delivery === | === Logistics and Delivery === | ||
Line 105: | Line 94: | ||
=== Advertising === | === Advertising === | ||
Amazon | Amazon has a growing advertising business, offering advertising solutions for brands to reach customers on its platforms through Amazon Advertising. | ||
=== Hardware and Consumer Electronics === | === Hardware and Consumer Electronics === | ||
In addition to its smart home devices, Amazon manufactures and sells hardware products like Fire tablets, Kindle e-readers, and Fire TV streaming devices. | |||
=== Others === | === Others === | ||
Others include Robotics (amazon scout etc), space exploration (blue origin), AI and machine learning. | |||
== Breakdown of sector revenues<ref><nowiki>https://fourweekmba.com/amazon-revenue-breakdown/</nowiki> </ref><!-- Add the sources to the individual paragraphs/sentences. That said, I think the source here is a poor one, so I suggest using another, more reliable one -->== | == Breakdown of sector revenues<ref><nowiki>https://fourweekmba.com/amazon-revenue-breakdown/</nowiki> </ref><!-- Add the sources to the individual paragraphs/sentences. That said, I think the source here is a poor one, so I suggest using another, more reliable one -->== | ||
=== E-commerce Retail === | === E-commerce Retail === | ||
Amazon's | Amazon's primary sector is e-commerce retail, which includes the sales of various consumer goods, through its online namesake platform. This category covers a wide range of products, including electronics, books, clothing, home goods. In 2022, Amazon's online stores raked in a $220 billion in revenue. <!-- The word 'impressive' is a relative term. Impressive how? --> | ||
=== Physical stores === | === Physical stores === | ||
Line 136: | Line 125: | ||
This category includes various sources of revenue for Amazon that do not fall into the aforementioned sectors. It may include revenue from physical stores (such as Whole Foods Market, acquired by Amazon), digital content sales, and other miscellaneous sources. For the year 2022, Amazon generated $4.25B billion from Other Revenue. | This category includes various sources of revenue for Amazon that do not fall into the aforementioned sectors. It may include revenue from physical stores (such as Whole Foods Market, acquired by Amazon), digital content sales, and other miscellaneous sources. For the year 2022, Amazon generated $4.25B billion from Other Revenue. | ||
== Amazon market shares across key segments | == Amazon market shares across key segments<ref>[https://www.t4.ai/companies/amazon-market-share#:~:text=Amazon%27s%20Market%20Share%20in%20E,Streaming%20%2D%2013%25%20in%202019. https://www.t4.ai/companies/amazon-market-share#:~:text=Amazon%27s%20Market%20Share%20in%20E,Streaming%20%2D%2013%25%20in%202019.]</ref> == | ||
The previous section showcases Amazon’s breakdown of revenue and the most important segments to Amazon from the perspective of revenues are: e-commerce, third party seller services, AWS and subscription services. Below figures will illustrate the market share of Amazon in some of those segments. | |||
=== US e-commerce market share (June 2022) | === US e-commerce market share (June 2022)<ref>[https://aag-it.com/the-latest-cloud-computing-statistics/#:~:text=AWS%20remains%20the%20most%20popular,%2C%20with%20revenue%20up%2024%25. https://aag-it.com/the-latest-cloud-computing-statistics/#:~:text=AWS%20remains%20the%20most%20popular,%2C%20with%20revenue%20up%2024%25.]</ref> === | ||
The US e-commerce is clearly dominated by Amazon followed by Walmart, Apple and eBay. Other players hold maximum of 2% of the market. Some related statistics about Amazon are as follows: | |||
[[File:Us_e_commerce_market.png]] | [[File:Us_e_commerce_market.png]] | ||
The US e-commerce is clearly dominated by Amazon followed by Walmart, Apple and eBay. Other players hold maximum of 2% of the market. Some related statistics about Amazon are as follows: | |||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+ | ||
|2021 e-commerce Amazon revenue: | |||
|2021 | |||
|USD 220 billion | |USD 220 billion | ||
|- | |- | ||
|Number of active sellers (2022) | |Number of active sellers (2022): | ||
|9.7 million | |9.7 million | ||
|- | |- | ||
|Number of shipments in 2021 | |Number of shipments in 2021: | ||
|7.7 billion | |7.7 billion | ||
|- | |- | ||
|Global number of users (2022) | |Global number of users (2022): | ||
|310 million | |310 million | ||
|- | |- | ||
|Number of fulfilment centres (2023) | |Number of fulfilment centres (2023): | ||
|185 | |185 | ||
|- | |- | ||
|Total area of fulfilment centres (2019) | |Total area of fulfilment centres (2019): | ||
|150 mln sq ft | |150 mln sq ft | ||
|} | |} | ||
=== Smart speaker market share (2020) === | === Smart speaker market share (2020) === | ||
[[File:Smart_speaker_market.png]] | [[File:Smart_speaker_market.png]] | ||
Similarly, to e-commerce, Amazon dominates the market of smart speakers with the help of Alexa | |||
In general, the most demanded products from Amazon can be shown in the below diagram. Amazon is most popular with electronics goods followed by clothing with shoes and then home and furniture. The least frequent orders are pet supplies.<ref name=":0">https://financesonline.com/amazon-statistics/</ref> | |||
[[File:Stats1.png]] | [[File:Stats1.png]] | ||
Popularity of Amazon’s as an e-commerce does not end here. Amazon is also the place where more than half of online purchasers start their search.<ref name=":0" /> | |||
[[File:Stats2.png]] | [[File:Stats2.png]] | ||
Line 201: | Line 172: | ||
=== [[File:Stats3.png]] === | === [[File:Stats3.png]] === | ||
In 2019, Amazon | In 2019, Amazon outperformed its major competitors across the entire cloud computing market with a total market share of 18%. Out of the cloud computing, Amazon is most popular among Infrastructure as a service segment with a eye watering 45% of market share. In q1 2022, AWS is still the preferred provider of cloud computing services with Azure (cloud computing provided by Microsoft) catching up but still below. | ||
Some of the cloud computing market trends that AWS could take advantage of are: | |||
# | # The cloud becomes more popular with SMEs | ||
# | # Businesses look towards multi-cloud solutions | ||
# | # The cloud gaming market is expanding | ||
Overall, the competition for Amazon across its key segments can be summarised in the below table: | |||
{| class="wikitable" | {| class="wikitable" | ||
!Segment of competition | !Segment of competition | ||
Line 288: | Line 259: | ||
[[File:Image3333.png]] | [[File:Image3333.png]] | ||
=== Amazon industrial innovation fund<ref><nowiki>https://www.aboutamazon.com/news/innovation-at-amazon/introducing-the-1-billion-amazon-industrial-innovation-fund</nowiki></ref> === | === Amazon industrial innovation fund<ref><nowiki>https://www.aboutamazon.com/news/innovation-at-amazon/introducing-the-1-billion-amazon-industrial-innovation-fund</nowiki></ref> === | ||
In April 2022, Amazon | In April of 2022, Amazon committed to create a USD 1 billion “venture capital” like platform called Amazon industrial innovation fund. The aim of such fund is to ultimately improve its operations, logistics, speed of parcel deliveries and simply take Amazon to a new level. The “fund” will invest in companies (not owned by Amazon) that incrementally enhance delivery speed and further improve the experience of employees working in warehousing and logistics fields. | ||
The | The first round of investments of the round involves tech and safety wearing ventures which are summarised below: | ||
{| class="wikitable" | {| class="wikitable" | ||
!Investee | !Investee | ||
Line 320: | Line 290: | ||
=== Amazon lending === | === Amazon lending === | ||
Amazon | Complementary to Amazon lending there are plans to further enhance the lending busieness in a partnership with Goldman Sachs. Frankly the lending operations of Amazon, started back in 2016, but have not been very popular, though were increasing over the years. As of December 2022, Amazon has over USD863m of outstanding loans on its books, where the interests are chanrged anywhere between 6% and 17% on the outstanding balance. | ||
Amazon, | The possibility of such a venture became possible after the “Open Banking” rule (new set of EU banking rules in power since 2019), which allows banks to share financial information such as the credit history with tech companies. Until now, although Amazon has lots of information about the clients, it does not have any access to the credit history of clients, making it hard for Amazon to properly analyse the credit risk. This partneship will clearly reduce this gap and will help Amazon to reach another high. | ||
The impact of such a venture for SMEs is favourable. The reason is that the market has already seen instances when e-commerce platforms partnered with financial services platforms to provide access to capital to SMEs. Increased competition is likely to enhance the services for small sellers. | |||
== Team<ref>https://ir.aboutamazon.com/officers-and-directors/default.aspx</ref> == | == Team<ref>https://ir.aboutamazon.com/officers-and-directors/default.aspx</ref> == | ||
Line 333: | Line 301: | ||
==== Executive Chairman ==== | ==== Executive Chairman ==== | ||
[[File:Image11111111111333333333.png|left|thumb]]Jeff Bezos | [[File:Image11111111111333333333.png|left|thumb]]Jeff Bezos, the visionary founder of Amazon.com, aims to be Earth's most customer-centric company. With competitive prices, fast delivery, and a vast product range, Amazon delivers exceptional value. It also offers Prime Video for streaming movies and TV shows and popular devices like Kindle, Fire, Echo, and Alexa. Additionally, Amazon Web Services provides cloud computing infrastructure in over 190 countries. | ||
Bezos is also the founder of Blue Origin, focusing on reducing space travel costs and enhancing safety. He owns The Washington Post and is known for his philanthropy. The Bezos Earth Fund supports conservation efforts, while The Bezos Day One Fund helps homeless families and establishes preschools in underserved communities. | Bezos is also the founder of Blue Origin, focusing on reducing space travel costs and enhancing safety. He owns The Washington Post and is known for his philanthropy. The Bezos Earth Fund supports conservation efforts, while The Bezos Day One Fund helps homeless families and establishes preschools in underserved communities. | ||
Educated at Princeton University, Bezos graduated with | Educated at Princeton University, Bezos graduated with honors in electrical engineering and computer science. He was named TIME Magazine's Person of the Year in 1999. | ||
==== Chief Executive Officer ==== | ==== Chief Executive Officer ==== | ||
[[File:Image111111111111.png|left|thumb]]Andy Jassy, the CEO of Amazon, is a visionary leader whose exceptional expertise and strategic acumen have played a pivotal role in shaping the company's success. With an impressive tenure at Amazon, Jassy has demonstrated unwavering commitment to innovation and customer-centricity, driving Amazon's transformation into a global tech giant. Known for his sharp intellect, Jassy possesses a deep understanding of the evolving technology landscape and has been instrumental in the growth of Amazon Web Services (AWS), Amazon's cloud computing division. His visionary leadership and ability to navigate complex challenges have garnered admiration, as he consistently fosters a culture of relentless innovation and high standards. Under Jassy's guidance, Amazon continues to expand its reach and redefine the boundaries of what is possible, making him a respected and influential figure in the tech industry. | [[File:Image111111111111.png|left|thumb]]Andy Jassy, the CEO of Amazon, is a visionary leader whose exceptional expertise and strategic acumen have played a pivotal role in shaping the company's success. With an impressive tenure at Amazon, Jassy has demonstrated unwavering commitment to innovation and customer-centricity, driving Amazon's transformation into a global tech giant. Known for his sharp intellect, Jassy possesses a deep understanding of the evolving technology landscape and has been instrumental in the growth of Amazon Web Services (AWS), Amazon's cloud computing division. His visionary leadership and ability to navigate complex challenges have garnered admiration, as he consistently fosters a culture of relentless innovation and high standards. Under Jassy's guidance, Amazon continues to expand its reach and redefine the boundaries of what is possible, making him a respected and influential figure in the tech industry. | ||
==== Senior Vice President and Chief Financial Officer ==== | ==== Senior Vice President and Chief Financial Officer ==== | ||
[[File:Image12213.png|left|thumb]]Brian T. Olsavsky joined Amazon.com in April 2002. As CFO of Amazon.com, he oversees the company's overall financial activities, including controllership, tax, treasury, analysis, investor relations, internal audit and financial operations. Prior to becoming Senior Vice President and CFO in June 2015, he served as Vice President, Finance and CFO for the Global Consumer Business. In his role as Vice President, Finance and CFO for the Global Consumer Business, Mr. Olsavsky had oversight and responsibility for the finance team supporting Amazon.com websites, merchant services, and fulfillment operations and subsidiaries. From 2007 to 2010, Mr. Olsavsky was Vice President, Finance for Amazon's North America retail business unit and acquisitions, and from 2002 to 2007 Mr. Olsavsky led the finance departments for Amazon's Worldwide Operations organization. Prior to joining Amazon.com, Mr. Olsavsky spent seven years at Fisher Scientific, where he held a variety of financial and business management roles, and a total of eight years at BF Goodrich and Union Carbide, where he held a variety of financial and operational roles. Mr. Olsavsky received a BS in Mechanical Engineering from Penn State and an MBA in Finance from Carnegie Mellon University. | [[File:Image12213.png|left|thumb]]Brian T. Olsavsky joined Amazon.com in April 2002. As CFO of Amazon.com, he oversees the company's overall financial activities, including controllership, tax, treasury, analysis, investor relations, internal audit and financial operations. Prior to becoming Senior Vice President and CFO in June 2015, he served as Vice President, Finance and CFO for the Global Consumer Business. In his role as Vice President, Finance and CFO for the Global Consumer Business, Mr. Olsavsky had oversight and responsibility for the finance team supporting Amazon.com websites, merchant services, and fulfillment operations and subsidiaries. From 2007 to 2010, Mr. Olsavsky was Vice President, Finance for Amazon's North America retail business unit and acquisitions, and from 2002 to 2007 Mr. Olsavsky led the finance departments for Amazon's Worldwide Operations organization. Prior to joining Amazon.com, Mr. Olsavsky spent seven years at Fisher Scientific, where he held a variety of financial and business management roles, and a total of eight years at BF Goodrich and Union Carbide, where he held a variety of financial and operational roles. Mr. Olsavsky received a BS in Mechanical Engineering from Penn State and an MBA in Finance from Carnegie Mellon University. | ||
==== Chief Executive Officer, Worldwide Amazon Stores ==== | ==== Chief Executive Officer, Worldwide Amazon Stores ==== | ||
[[File:Image34.png|left|thumb]] | [[File:Image34.png|left|thumb]] | ||
Line 350: | Line 321: | ||
Shelley L. Reynolds joined Amazon in February 2006 as Vice President of Finance and Controller. In April 2007, she was promoted to Vice President, Worldwide Controller and Principal Accounting Officer. In her role, she oversees Amazon’s accounting function, leading the team that touches every geography in which the company operates. Prior to joining Amazon, Ms. Reynolds spent 19 years at Deloitte & Touche LLP, serving as partner from 1998 to 2006. At Deloitte, Ms. Reynolds specialized in matters related to mergers & acquisitions and the Securities and Exchange Commission, serving multiple publicly traded multi-national corporations from a broad range of industries. Ms. Reynolds received her undergraduate degree from the University of Washington Foster School of Business, where she currently serves on the advisory board. | Shelley L. Reynolds joined Amazon in February 2006 as Vice President of Finance and Controller. In April 2007, she was promoted to Vice President, Worldwide Controller and Principal Accounting Officer. In her role, she oversees Amazon’s accounting function, leading the team that touches every geography in which the company operates. Prior to joining Amazon, Ms. Reynolds spent 19 years at Deloitte & Touche LLP, serving as partner from 1998 to 2006. At Deloitte, Ms. Reynolds specialized in matters related to mergers & acquisitions and the Securities and Exchange Commission, serving multiple publicly traded multi-national corporations from a broad range of industries. Ms. Reynolds received her undergraduate degree from the University of Washington Foster School of Business, where she currently serves on the advisory board. | ||
==== Chief Executive Officer, Amazon Web Services ==== | ==== Chief Executive Officer, Amazon Web Services ==== | ||
[[File:Image5555.png|left|thumb]]Adam N. Selipsky is the CEO of Amazon Web Services (AWS), the world’s most comprehensive and broadly adopted cloud. He also leads Worldwide Sustainability for Amazon, overseeing efforts to scale and drive Amazon’s adoption of renewable energy, path to net-zero carbon emissions, and other company-wide initiatives. Having previously led AWS Marketing, Sales, and Support from its infancy, Selipsky was instrumental in launching and growing AWS from a startup into a multi-billion-dollar business. In 2016, Selipsky left to become president and CEO of data visualization pioneer Tableau Software, where he led the company through its acquisition by Salesforce in what was the third-largest software industry acquisition at the time, before returning to AWS in 2021. Selipsky is a member of the World Economic Forum Information, Technology, and Communications governors, and serves on the Harvard Business School Dean’s Advisory Board. He has an AB in government from Harvard University and an MBA from Harvard Business School. | [[File:Image5555.png|left|thumb]]Adam N. Selipsky is the CEO of Amazon Web Services (AWS), the world’s most comprehensive and broadly adopted cloud. He also leads Worldwide Sustainability for Amazon, overseeing efforts to scale and drive Amazon’s adoption of renewable energy, path to net-zero carbon emissions, and other company-wide initiatives. Having previously led AWS Marketing, Sales, and Support from its infancy, Selipsky was instrumental in launching and growing AWS from a startup into a multi-billion-dollar business. In 2016, Selipsky left to become president and CEO of data visualization pioneer Tableau Software, where he led the company through its acquisition by Salesforce in what was the third-largest software industry acquisition at the time, before returning to AWS in 2021. Selipsky is a member of the World Economic Forum Information, Technology, and Communications governors, and serves on the Harvard Business School Dean’s Advisory Board. He has an AB in government from Harvard University and an MBA from Harvard Business School. | ||
==== Senior Vice President, Global Public Policy & General Counsel ==== | ==== Senior Vice President, Global Public Policy & General Counsel ==== | ||
[[File:Image67.png|left|thumb]] | [[File:Image67.png|left|thumb]] | ||
Line 363: | Line 336: | ||
'''Beneficial owners''' | '''Beneficial owners''' | ||
As of the 2023 Proxy Statement<ref>https://s2.q4cdn.com/299287126/files/doc_financials/2023/ar/Amazon-2023-Proxy-Statement.pdf</ref>, individuals who serve as directors and/or executive officers, the | As of the 2023 Proxy Statement<ref>https://s2.q4cdn.com/299287126/files/doc_financials/2023/ar/Amazon-2023-Proxy-Statement.pdf</ref>, sole voting and investment power is granted to individuals who serve as directors and/or executive officers, the directors and executive officers as a group, and individuals and organisations that own 5% or more of the total common stock. The beneficial owners list was released as following: | ||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+ | ||
Line 774: | Line 747: | ||
[[File:NetProfitForecacst.png|1200x1200px]] | [[File:NetProfitForecacst.png|1200x1200px]] | ||
== | == Valuation == | ||
DCF (Discounted Cash Flow) model was used to reach an intrinsic valuation for Amazon. Additionally, trading comparable analysis derived a relative valuation. | |||
=== | === DCF === | ||
Revenue figures from 2018 to 2022 are used to obtain an average year-on-year growth which can be utilised to project the revenues from 2023 to 2027. Similarly, average growth in taxes as a percentage of EBIT is used to project the taxes. For all other lines of the financial statements, growth is evaluated as a percentage of revenue. | |||
{| class="wikitable" | |||
|+ | |||
! ''$ million'' | |||
! colspan="5" |''Historical'' | |||
! colspan="5" |''Projected'' | |||
|- | |||
!'''Income Statement''' | |||
!'''2018''' | |||
!'''2019''' | |||
!'''2020''' | |||
!'''2021''' | |||
!'''2022''' | |||
!'''2023''' | |||
!'''2024''' | |||
!'''2025''' | |||
!'''2026''' | |||
!'''2027''' | |||
{| class="wikitable" | |||
|+ | |||
! ''$ million'' | |||
! colspan="5" |''Historical'' | |||
! colspan="5" |''Projected'' | |||
|- | |- | ||
|Revenue | |||
|Revenue | |||
|232,887 | |232,887 | ||
|280,522 | |280,522 | ||
Line 834: | Line 776: | ||
|469,822 | |469,822 | ||
|513,983 | |513,983 | ||
| | |628,566 | ||
| | |768,693 | ||
| | |940,058 | ||
| | |1,149,626 | ||
| | |1,405,914 | ||
|- | |- | ||
|''% growth'' | |''% growth'' | ||
Line 846: | Line 788: | ||
|21.70% | |21.70% | ||
|9.40% | |9.40% | ||
| | |22.29% | ||
| | |22.29% | ||
| | |22.29% | ||
| | |22.29% | ||
| | |22.29% | ||
|- | |- | ||
| | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|- | |- | ||
|EBIT | |EBIT | ||
| | |12,717 | ||
| | |14,742 | ||
| | |22,824 | ||
| | |24,941 | ||
| | |13,511 | ||
| | |14,156 | ||
| | |14,832 | ||
| | |15,541 | ||
| | |16,283 | ||
| | |17,061 | ||
|- | |- | ||
|''% | |''% sales'' | ||
| | |5.46% | ||
| | |5.26% | ||
| | |5.91% | ||
| | |5.31% | ||
| | |2.63% | ||
| | |4.78% | ||
| | |4.78% | ||
| | |4.78% | ||
| | |4.78% | ||
| | |4.78% | ||
|- | |- | ||
| | | | ||
Line 890: | Line 842: | ||
| | | | ||
|- | |- | ||
| | |Taxes | ||
| | |1,197 | ||
| | |2,374 | ||
| | |2,863 | ||
| | |4,791 | ||
|style="color: red;" | | |style="color: red;" |(3,217) | ||
|style="color: red;" | | |style="color: red;" |(3,410) | ||
| | |style="color: red;" |(3,615) | ||
| | |style="color: red;" |(3,833) | ||
| | |style="color: red;" |(4,063) | ||
| | |style="color: red;" |(4,307) | ||
|- | |- | ||
|''% | |''% EBIT'' | ||
| | |9.41% | ||
| | |16.10% | ||
| | |12.54% | ||
| | |19.21% | ||
|style="color: red;" | | |style="color: red;" |(23.81)% | ||
| | |6.01% | ||
| | |6.01% | ||
| | |6.01% | ||
| | |6.01% | ||
| | |6.01% | ||
|- | |- | ||
| | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|- | |- | ||
!'''Cash Flow items''' | !'''Cash Flow items''' | ||
! | ! | ||
! | ! | ||
Line 929: | Line 891: | ||
|- | |- | ||
|D&A | |D&A | ||
| | |15,341 | ||
| | |21,789 | ||
| | |25,251 | ||
| | |34,296 | ||
| | |41,921 | ||
| | |45,040 | ||
| | |48,392 | ||
| | |51,993 | ||
| | |55,861 | ||
| | |60,018 | ||
|- | |- | ||
|% of | |''% of sales'' | ||
| | |6.59% | ||
| | |7.77% | ||
| | |6.54% | ||
| | |7.30% | ||
| | |8.16% | ||
| | |7.44% | ||
| | |7.44% | ||
| | |7.44% | ||
| | |7.44% | ||
| | |7.44% | ||
|- | |- | ||
| | |''% of Capex'' | ||
|style="color: red;" |(114.25)% | |||
|style="color: red;" |-129.23% | |||
|style="color: red;" |-62.91% | |||
|style="color: red;" |-56.17% | |||
|style="color: red;" |-65.87% | |||
|style="color: red;" |-78.54% | |||
|style="color: red;" |-78.54% | |||
|style="color: red;" |-78.54% | |||
|style="color: red;" |-78.54% | |||
|style="color: red;" |-78.54% | |||
|style="color: red;" | | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|style="color: red;" | - | |||
|- | |- | ||
| | | | ||
Line 994: | Line 930: | ||
| | | | ||
| | | | ||
| | |||
| | |||
| | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|- | |||
|Capex | |||
|style="color: red;" |-13,427 | |||
|style="color: red;" |-16,861 | |||
|style="color: red;" |-40,140 | |||
|style="color: red;" |-61,053 | |||
|style="color: red;" |-63,645 | |||
|style="color: red;" |(56,996) | |||
|style="color: red;" |(51,042) | |||
|style="color: red;" |(45,710) | |||
|style="color: red;" |(40,935) | |||
|style="color: red;" |(36,659) | |||
|- | |||
|% of sales | |||
|style="color: red;" |-5.77% | |||
|style="color: red;" |-6.01% | |||
|style="color: red;" |-10.40% | |||
|style="color: red;" |-12.99% | |||
|style="color: red;" |-12.38% | |||
|style="color: red;" |-10.45% | |||
|style="color: red;" |-10.45% | |||
|style="color: red;" |-10.45% | |||
|style="color: red;" |-10.45% | |||
|style="color: red;" |-10.45% | |||
|- | |||
| | | | ||
| | | | ||
Line 1,001: | Line 969: | ||
| | | | ||
| | | | ||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|- | |- | ||
| | |Changes in NWC | ||
| | |style="color: red;" |(1,043) | ||
| | |style="color: red;" |(2,438) | ||
| | |13,481 | ||
| | |style="color: red;" |(19,611) | ||
| | |style="color: red;" |(20,886) | ||
| | |style="color: red;" |(20,593) | ||
| | |style="color: red;" |(20,304) | ||
| | |style="color: red;" |(20,019) | ||
| | |style="color: red;" |(19,738) | ||
| | |style="color: red;" |(19,461) | ||
|- | |- | ||
| | |''% of sales'' | ||
| | |style="color: red;" |-0.45% | ||
| | |style="color: red;" |-0.87% | ||
| | |3.49% | ||
|style="color: red;" | - | |style="color: red;" |-4.17% | ||
| | |style="color: red;" |-4.06% | ||
|style="color: red;" | - | |style="color: red;" |-1.40% | ||
| | |style="color: red;" |-1.40% | ||
| | |style="color: red;" |-1.40% | ||
| | |style="color: red;" |-1.40% | ||
| | |style="color: red;" |-1.40% | ||
|- | |- | ||
| | |''% of change in sales'' | ||
| | | | ||
| | |style="color: red;" |-5.12% | ||
| | |12.77% | ||
| | |style="color: red;" |-23.41% | ||
| | |style="color: red;" |-47.30% | ||
| | |style="color: red;" |-15.76% | ||
| | |style="color: red;" |-15.76% | ||
| | |style="color: red;" |-15.76% | ||
| | |style="color: red;" |-15.76% | ||
| | |style="color: red;" |-15.76% | ||
|- | |- | ||
| | | | ||
Line 1,050: | Line 1,022: | ||
| | | | ||
|- | |- | ||
!'''DCF''' | |||
! | |||
! | |||
! | |||
! | |||
! | |||
! | |||
! | |||
! | |||
! | |||
! | |||
|- | |- | ||
| | |Revenue | ||
| | |232,887 | ||
|280,522 | |||
|386,064 | |||
|469,822 | |||
|513,983 | |||
|628,566 | |||
|768,693 | |||
|940,058 | |||
|1,149,626 | |||
|1,405,914 | |||
|- | |- | ||
| | |''% growth'' | ||
| | | - | ||
| | |20.45% | ||
| | |37.62% | ||
| | |21.70% | ||
| | |9.40% | ||
| | |22.29% | ||
|22.29% | |||
|22.29% | |||
|22.29% | |||
|22.29% | |||
|- | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|- | |- | ||
| | |EBIT | ||
| | |12,717 | ||
| | |14,742 | ||
|22,824 | |||
|24,941 | |||
|13,511 | |||
|14,156 | |||
|14,832 | |||
|15,541 | |||
|16,283 | |||
|17,061 | |||
|- | |- | ||
| | |''% margin'' | ||
| | |5.46% | ||
| | |5.26% | ||
|5.91% | |||
|5.31% | |||
|2.63% | |||
|4.78% | |||
|4.78% | |||
|4.78% | |||
|4.78% | |||
|4.78% | |||
|- | |- | ||
| | | | ||
| | | | ||
| | | | ||
| | |||
| | |||
| | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|- | |- | ||
| | |Taxes | ||
| | |1,197 | ||
| | |2,374 | ||
|2,863 | |||
|4,791 | |||
|style="color: red;" |(3,217) | |||
|style="color: red;" |(3,410) | |||
|style="color: red;" |(3,615) | |||
|style="color: red;" |(3,833) | |||
|style="color: red;" |(4,063) | |||
|style="color: red;" |(4,307) | |||
|- | |- | ||
| | |''% of EBIT'' | ||
| | |9.41% | ||
| | |16.10% | ||
| | |12.54% | ||
|19.21% | |||
|style="color: red;" |(23.81)% | |||
|6.01% | |||
|6.01% | |||
|6.01% | |||
|6.01% | |||
|6.01% | |||
|- | |- | ||
| | | | ||
| | | | ||
| | |||
| | |||
| | |||
| | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|- | |- | ||
!EBIAT | |||
!11,520 | |||
!12,368 | |||
!19,961 | |||
!20,150 | |||
!16,728 | |||
!17,567 | |||
!18,448 | |||
!19,374 | |||
!20,346 | |||
!21,368 | |||
|- | |- | ||
| | | | ||
| | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|- | |- | ||
| | |D&A | ||
| | |15,341 | ||
|21,789 | |||
|25,251 | |||
|34,296 | |||
|41,921 | |||
|45,040 | |||
|48,392 | |||
|51,993 | |||
|55,861 | |||
|60,018 | |||
|- | |- | ||
| | |''% of sales'' | ||
| | |6.59% | ||
|7.77% | |||
|6.54% | |||
|7.30% | |||
|8.16% | |||
|7.44% | |||
|7.44% | |||
|7.44% | |||
|7.44% | |||
|7.44% | |||
|- | |- | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|- | |- | ||
| | |Capex | ||
| | |style="color: red;" |(13,427) | ||
|style="color: red;" |(16,861) | |||
|style="color: red;" |(40,140) | |||
|style="color: red;" |(61,053) | |||
|style="color: red;" |(63,645) | |||
|style="color: red;" |(56,996) | |||
|style="color: red;" |(51,042) | |||
|style="color: red;" |(45,710) | |||
|style="color: red;" |(40,935) | |||
|style="color: red;" |(36,659) | |||
|- | |- | ||
| | |''% of slaes'' | ||
| | |style="color: red;" |(5.77)% | ||
|style="color: red;" |(6.01)% | |||
|style="color: red;" |(10.40)% | |||
|style="color: red;" |(12.99)% | |||
|style="color: red;" |(12.38)% | |||
|style="color: red;" |(10.45)% | |||
|style="color: red;" |(10.45)% | |||
|style="color: red;" |(10.45)% | |||
|style="color: red;" |(10.45)% | |||
|style="color: red;" |(10.45)% | |||
|- | |- | ||
| | | | ||
| | | | ||
| | |||
| | |||
| | |||
| | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|0 | |||
|- | |- | ||
| | |Changes in NWC | ||
| | |style="color: red;" |(1,043) | ||
|style="color: red;" |(2,438) | |||
|13,481 | |||
|style="color: red;" |(19,611) | |||
|style="color: red;" |(20,886) | |||
|style="color: red;" |(20,593) | |||
|style="color: red;" |(20,304) | |||
|style="color: red;" |(20,019) | |||
|style="color: red;" |(19,738) | |||
|style="color: red;" |(19,461) | |||
|- | |- | ||
| | |''% of sales'' | ||
| | |style="color: red;" |(0.45)% | ||
|style="color: red;" |(0.87)% | |||
|3.49% | |||
|style="color: red;" |(4.17)% | |||
|style="color: red;" |(4.06)% | |||
|style="color: red;" |(1.40)% | |||
|style="color: red;" |(1.40)% | |||
|style="color: red;" |(1.40)% | |||
|style="color: red;" |(1.40)% | |||
|style="color: red;" |(1.40)% | |||
|- | |- | ||
| | | | ||
| | | | ||
| | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | | | ||
|- | |- | ||
|Unlevered FCF | |||
|14,477 | |||
| | |19,734 | ||
| | |style="color: red;" |(8,409) | ||
| | |13,004 | ||
| | |15,890 | ||
| | |26,203 | ||
| | |36,101 | ||
| | |45,675 | ||
|55,010 | |||
|64,188 | |||
|- | |- | ||
| | |||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | |||
| | |||
| | |||
|- | |- | ||
|Year count | |||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | |0.52 | ||
| | |1.52 | ||
|2.52 | |||
|3.52 | |||
|4.52 | |||
|- | |- | ||
|Discount factor | |||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | |0.96 | ||
| | |0.89 | ||
| | |0.83 | ||
|0.77 | |||
| | |0.71 | ||
| | |- | ||
| | !Present value of FCF | ||
! | |||
! | |||
! | |||
! | |||
! | |||
! | !25207 | ||
!32233 | |||
!37850 | |||
!42311 | |||
!45823 | |||
|} | |} | ||
Sources suggest a terminal growth rate within the 3-5% range. The DCF model employs an average estimate of 4%, but the full range is accommodated in the sensitivity analysis. This figure is used in calculating the terminal value, which, when discounted, results in a present terminal value of approximately $1.273 trillion. | |||
In calculating the DCF that forecasts the financial trajectory of a US-based company over the next five years, the risk-free rate is pegged at the US 5-year Treasury rate of 3.87%. This figure represents the monthly average rate spanning from January to July 2023. | |||
The | The summarised estimates from the DCF analysis can be found in the table below. | ||
{| class="wikitable" | {| class="wikitable" | ||
! | !Input name | ||
!Input value | |||
!Input value reason | |||
! | |||
! | |||
|- | |- | ||
| | |Risk free rate | ||
|3.87% | |||
|Here, the five-year US bond is used. | |||
| | |||
| - | |||
|- | |- | ||
| | |Market risk premium | ||
| | |4.70% | ||
| | |||
| | |||
|- | |- | ||
| | |Levered beta | ||
| | |0.88 | ||
| | | | ||
|- | |- | ||
| | |Cost of equity | ||
| | |8.01% | ||
| | |||
| | |||
|- | |- | ||
| | |Cost of debt | ||
| | |5.25% | ||
| | |||
| | |||
|- | |- | ||
| | |Internally calculated WACC | ||
| | |7.74% | ||
| | |||
| | |||
|- | |- | ||
| | |Terminal growth rate | ||
| | |4% | ||
| | |||
| | |||
|} | |} | ||
The market risk premium fluctuates between 4.2% and 5.2%, thus we employ an average of 4.7% for our calculations. The volatility of Amazon's stock price is viewed as being lower relative to the general market. This is reflected in its beta, which varies from 0.64 to 1.12, yielding an average of 0.88. Consequently, we derive a cost of equity of 8.01%. When this is combined with the cost of debt, which stands at 5.25%, we arrive at a weighted average cost of capital (WACC) of 7.74%. | |||
In the process of discounting the future Free Cash Flow to its present value, the WACC serves as the discount factor. The count of years commences from 0.52. This calculation leads to a share price of $135.57, a summary of which is presented in the table below. | |||
{| class="wikitable" | {| class="wikitable" | ||
|Enterprise value ($): | |||
|1,457,196 | |||
|- | |- | ||
| | |(+) Cash ($): | ||
| | |69,674 | ||
|- | |- | ||
| | |(-) Debt ($): | ||
| | |141,000 | ||
|- | |- | ||
| | |Equity Value ($): | ||
| | |1,385,520 | ||
|- | |- | ||
| | |Shares (millions): | ||
|10 | |10,220 | ||
|- | |- | ||
| | |Share Price ($): | ||
|9. | |135.57 | ||
| | |} | ||
| | The closing share price for Amazon stocks on 6th July 2023 stood at $128.36. | ||
| | |||
| | We conducted a sensitivity analysis using a WACC range of 6.5% to 9.0%, and a terminal growth rate span of 2.5% to 5.0%. | ||
{| class="wikitable" | |||
! | |||
! | |||
! colspan="7" |WACC | |||
|- | |||
! | |||
| | |||
|6.50% | |||
|7.00% | |||
|7.50% | |||
|7.74% | |||
|8.00% | |||
|8.50% | |||
|9.00% | |||
|- | |- | ||
| | ! rowspan="6" |Terminal growth rate | ||
| | |2.5% | ||
|132. | |$132.60 | ||
| | |$116.65 | ||
| | |$103.90 | ||
| | |$98.62 | ||
|$93.47 | |||
|$84.79 | |||
|$77.45 | |||
|- | |- | ||
| | |3.0% | ||
| | |$150.57 | ||
| | |$130.40 | ||
| | |$114.72 | ||
| | |$108.34 | ||
| | |$102.18 | ||
|$91.93 | |||
|$83.40 | |||
|- | |- | ||
| | |3.5% | ||
| | |$174.53 | ||
| | |$148.08 | ||
| | |$128.24 | ||
| | |$120.35 | ||
| | |$112.83 | ||
|$100.50 | |||
|$90.42 | |||
|- | |- | ||
| | |4.0% | ||
| | |$208.08 | ||
| | |$171.65 | ||
| | |$145.63 | ||
| | |$135.57 | ||
| | |$126.13 | ||
|} | |$110.97 | ||
|$98.85 | |||
|- | |||
|4.5% | |||
|$258.40 | |||
== Appendix == | |$204.64 | ||
|$168.82 | |||
=== Financial Statements === | |$155.49 | ||
{| class="wikitable" | |$143.24 | ||
|+Balance sheet | |$124.07 | ||
!Year end date | |$109.16 | ||
!31/12/2018 | |- | ||
!31/12/2019 | |5.0% | ||
!31/12/2020 | |$342.26 | ||
!31/12/2021 | |$254.14 | ||
!31/12/2022 | |$201.28 | ||
|- | |$182.67 | ||
|'''Current Assets''' | |$166.05 | ||
| | |$140.90 | ||
| | |$122.04 | ||
| | |} | ||
| | |||
| | === Relative Valuation === | ||
|- | A comparable trade analysis is conducted to establish a relative valuation for Amazon, supplementing the aforementioned absolute DCF valuation. The analysis takes into account key competitors, such as Alibaba and Ebay. | ||
|Cash and Cash Equivalents ($million) | {| class="wikitable" | ||
|$31,750 | !Name | ||
|$36,092 | !Mkt Cap ($ millions) | ||
|$42,122 | !EV/EBITDA | ||
|$36,220 | !P/E | ||
|$53,888 | |- | ||
|- | |AMAZON.COM INC | ||
|Marketable securities ($million) | |1337744.91 | ||
|21.36 | |||
|140.55 | |||
|- | |||
|ALIBABA GROUP HOLDING-SP ADR | |||
|217919.81 | |||
|6.96 | |||
|13.71 | |||
|- | |||
|EBAY INC | |||
|24068.68 | |||
|10.02 | |||
|14.64 | |||
|- | |||
|ALLEGRO.EU SA | |||
|8131.03 | |||
|17.73 | |||
|#N/A N/A | |||
|- | |||
|ETSY INC | |||
|10503.42 | |||
|24.81 | |||
|34.45 | |||
|- | |||
|VIPSHOP HOLDINGS LTD - ADR | |||
|9115.95 | |||
| - | |||
|10.15 | |||
|- | |||
|VERKKOKAUPPA.COM OYJ | |||
|128.12 | |||
|14.63 | |||
| - | |||
|- | |||
|MERCADOLIBRE INC | |||
|62626.96 | |||
|34.66 | |||
|101.25 | |||
|- | |||
|CHEWY INC - CLASS A | |||
|16156.76 | |||
|62.47 | |||
|302.76 | |||
|- | |||
|JD.COM INC-ADR | |||
|55401.57 | |||
|10.04 | |||
|17.86 | |||
|- | |||
|NEXT PLC | |||
|10942.15 | |||
|10.67 | |||
|11.73 | |||
|- | |||
|REVOLVE GROUP INC | |||
|1216.23 | |||
|14.35 | |||
|22.3 | |||
|- | |||
|1-800-FLOWERS.COM INC-CL A | |||
|495.54 | |||
|7.2 | |||
|55.52 | |||
|- | |||
|PDD HOLDINGS INC | |||
|90833.47 | |||
| - | |||
|43.91 | |||
|- | |||
|ZALANDO SE | |||
|7090.3 | |||
|14.32 | |||
|178.73 | |||
|- | |||
|ZOZO INC | |||
|6250 | |||
|14.34 | |||
|21.88 | |||
|- | |||
! | |||
! | |||
! | |||
! | |||
|- | |||
|Minimum | |||
|128.12 | |||
|6.96 | |||
|10.15 | |||
|- | |||
|Lower Quartile | |||
|6670.15 | |||
|10.1975 | |||
|15.445 | |||
|- | |||
|Median | |||
|10503.42 | |||
|14.345 | |||
|28.375 | |||
|- | |||
|Upper Quartile | |||
|39735.125 | |||
|20.4525 | |||
|89.8175 | |||
|- | |||
|Maximum | |||
|217919.81 | |||
|62.47 | |||
|302.76 | |||
|- | |||
|Mean | |||
|34725.33267 | |||
|18.82571429 | |||
|69.2457143 | |||
|} | |||
The EV/EBITDA ratio, a commonly used valuation metric, takes into account both debt and liabilities relative to the actual earnings. On the other hand, the P/E ratio serves as an effective tool to determine whether a stock is undervalued or overvalued compared to its industry peers. | |||
The table provides a brief analysis of the ratios and market cap of the 15 companies in the analysis including their minimum/maximum, median, quartile and mean values. | |||
The mean EV/EBITDA obtained for the set of 15 companies in the analysis is 18.83, which results in a relatively valued share price of $100.30. The mean P/E ratio in the industry is 69.25 which results in a relatively valued share price of $108.02. | |||
== Risks related to growing business == | |||
=== Intense Competition === | |||
Amazon has competitors across geographies and industries- retail (physical, e-commerce, omni-channel), computing services (both web and infrastructure), electronic devices, digital content, grocery etc. | |||
=== Expansion into newer market segments === | |||
There could be a possibility of failure to recoup investments in new technologies, products, or services. This is because of the limited or no experience in these areas. | |||
== Risks related to operations == | |||
=== International Expansion === | |||
There are several factors like government restrictions/ regulations, physical and technological infrastructure, income levels, geopolitical events etc. which pose a threat to significant revenues and profits from the international market. Amazon has no first-to-market advantage in some geographies and little operating experience in others. For example, regulations in the two biggest Asian markets- India and China are quite restrictive to Amazon’s business activities. Violation of these regulations may result in heavy penalties or revocation of licences. They also face threats from more established local companies and brands. | |||
=== Fluctuation in Demand === | |||
Variability in Amazon’s retail business because of seasonality, promotions, unforeseen economic, climate and geopolitical events place increased strain on operations. The risks related to fulfilment network optimisation and inventory are magnified during periods of high demand. This results in high fluctuations in operating results and growth rate. | |||
=== Technological Risks (data loss, security breaches, system interruption, lack of redundancy) === | |||
Because a lot of sensitive and confidential information is collected, processed, stored and transmitted by Amazon, failure to prevent data loss, theft, and misuse could lead to litigation liability, and regulatory action, discouraging its customers and vendors to use the platform, and could harm the business reputation. | |||
Furthermore, any event that could prevent Amazon from accepting and fulfilling customer orders and providing services, due to system interruption, delays etc. Can make its product and service offerings less attractive and subject to liability. | |||
=== Strategic Alliances, Commercial Agreements, Supplier and other Business Relationships === | |||
Violations by suppliers or other vendors of applicable laws, regulations, contractual terms, intellectual property rights of others, or Supply Chain Standards, as well as products or practices regarded as unethical, unsafe, or hazardous, could expose Amazon to claims, damage their reputation, limit our growth, and negatively affect our operating results. A point to be noted is that there are limited or single sources of supply in some cases. | |||
Additionally, these arrangements are complex and require substantial infrastructure capacity, personnel, and other resource commitments, which may limit the amount of business Amazon can service. They may not be able to implement, maintain, and develop the components of these commercial relationships, which creates additional risk. | |||
=== Risks related to inventory and payments === | |||
There are several inventory risk factors that may adversely affect the operating results . Some of these are rapid changes in product cycles and pricing, defective merchandise, changes in customer demand and consumer spending patterns, changes in consumer tastes with respect to products offered, spoilage, new product launches. Additionally, certain goods or components require significant lead time and prepayment which may not be returnable. They also carry significant inventory levels of certain products, like consumer electronics, and are sometimes unable to sell products in sufficient quantity or to meet demand during relevant selling seasons. | |||
For existing and future payment options they offer to their customers, Amazon currently is subject to, and may become subject to additional, regulations and compliance requirements (including obligations to implement enhanced authentication processes that could result in significant costs and reduce the ease of use of their payments products), as well as fraud. For certain payment methods, including credit and debit cards, they pay interchange and other fees, which may increase over time and raise their operating costs and lower profitability. | |||
== Appendix == | |||
=== Financial Statements === | |||
{| class="wikitable" | |||
|+Balance sheet | |||
!Year end date | |||
!31/12/2018 | |||
!31/12/2019 | |||
!31/12/2020 | |||
!31/12/2021 | |||
!31/12/2022 | |||
|- | |||
|'''Current Assets''' | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|- | |||
|Cash and Cash Equivalents ($million) | |||
|$31,750 | |||
|$36,092 | |||
|$42,122 | |||
|$36,220 | |||
|$53,888 | |||
|- | |||
|Marketable securities ($million) | |||
|$9,500 | |$9,500 | ||
|$18,929 | |$18,929 | ||
Line 1,922: | Line 2,150: | ||
!31/12/2022 | !31/12/2022 | ||
|- | |- | ||
| colspan="6" |'''Liquidity Ratios''' | |||
|- | |- | ||
|Current Ratio | |Current Ratio | ||
Line 1,945: | Line 2,173: | ||
|35% | |35% | ||
|- | |- | ||
| colspan="2" |'''Profitability Ratios''' | |||
| | |||
| | |||
| | |||
| | |||
|- | |- | ||
|Gross Margin | |Gross Margin |