Ebay Case Analysis
EBay Case Analysis
Step One: Read.
Step 2: Dupont Ratio and Financial Analysis o Two year Financial Ratio o Short Term o Current Ratio
2002: 1,468,458/386,224= 3.8
2001= 4.9 o Long Term o Total Debt Ratio
Total ass. Total equity/ Total ass.
2002= .1377
2001= .1485771 o Asset Utilization, or turnover ratios o Total Asset Turnover
Sales/ total assets
2002= .29
2001= o Profitability o Return on assets= net income/ total assets o 2002= .0117 o 2001= .053885 o Market Value o Price earnings ratio= price per share/ earnings per share
o Du Pont Ratio o ROE= (Net Profit/ Sales) X (Sales/ Assets) X (Assets/ Equity) o 2002 ROE= (48,294/1213000) X (1,213,000/ 4,124,444) X (4,124,444/ 3,556,473) .03918 X .2941 X 1.160 o ROE= .013
Step 3: External Environment
Opportunities
1. The changing lifestyles of people can help eBay penetrate the market even further and broaden their Customer base
2. Look for acquisitions or partnerships of other online auction sites
3. Keep expanding internationally
4. Expand Community Services
5. Increasing use of the internet
Threats
1. Continual growth of Amazon.com
2. Thievery within their own site
3. 1/3 of internet users already registered on eBay
Comments
1. EBay should keep a close eye on threats to their company and do what they can to make them opportunities for change.
2. Move forward to create more Internet users.
Step 4: Porter's 5 forces Analysis
1. Potential Entrants
Specialized auction sites could slowly dwindle down EBay's market share
Already established auction sites could expand into other segments of online auction market
2. Suppliers
EBay will always have suppliers because the consumer is the supplier. EBay needs to protect itself against thievery, so the consumer has a good experience and creates a relationship with EBay.
Suppliers could go to other auction site if they have bad experience
3.
Step One: Read.
Step 2: Dupont Ratio and Financial Analysis o Two year Financial Ratio o Short Term o Current Ratio
2002: 1,468,458/386,224= 3.8
2001= 4.9 o Long Term o Total Debt Ratio
Total ass. Total equity/ Total ass.
2002= .1377
2001= .1485771 o Asset Utilization, or turnover ratios o Total Asset Turnover
Sales/ total assets
2002= .29
2001= o Profitability o Return on assets= net income/ total assets o 2002= .0117 o 2001= .053885 o Market Value o Price earnings ratio= price per share/ earnings per share
o Du Pont Ratio o ROE= (Net Profit/ Sales) X (Sales/ Assets) X (Assets/ Equity) o 2002 ROE= (48,294/1213000) X (1,213,000/ 4,124,444) X (4,124,444/ 3,556,473) .03918 X .2941 X 1.160 o ROE= .013
Step 3: External Environment
Opportunities
1. The changing lifestyles of people can help eBay penetrate the market even further and broaden their Customer base
2. Look for acquisitions or partnerships of other online auction sites
3. Keep expanding internationally
4. Expand Community Services
5. Increasing use of the internet
Threats
1. Continual growth of Amazon.com
2. Thievery within their own site
3. 1/3 of internet users already registered on eBay
Comments
1. EBay should keep a close eye on threats to their company and do what they can to make them opportunities for change.
2. Move forward to create more Internet users.
Step 4: Porter's 5 forces Analysis
1. Potential Entrants
Specialized auction sites could slowly dwindle down EBay's market share
Already established auction sites could expand into other segments of online auction market
2. Suppliers
EBay will always have suppliers because the consumer is the supplier. EBay needs to protect itself against thievery, so the consumer has a good experience and creates a relationship with EBay.
Suppliers could go to other auction site if they have bad experience
3.