Financial Statement Analysis of Amazon.Com
Financial Statement Analysis of Amazon.com, Inc.
Introduction
The purpose of this essay is to perform financial statement analysis on Amazon.com, Inc. (NASDAQ: AMZN ). We start with an introduction of Amazon and its industry. We then evaluate the company’s financial position, liquidity, operating capability and financial flexibility using different ratios. To evaluate the financial performance of Amazon.com, Inc we disclose recurring NICO and do full ROE disaggregation.
Amazon.com’s stock price increased from $44.29 per share at the end of fiscal year 2004 to $134.52 per share at the end of fiscal year 2009. Earnings per share increased from $0.63 to $2.06. The stock closed at $118.87 on 02/01/2010.
Recommendation
Amazon.com is a fast growing E-Commerce company. Although facing the recent U.S. and global economic down turn and intense competitions from various industries, its sales increased 28% in 2009, diluted earnings per share increased 31%. Based on our analysis, we project the company to continue maintain the high growth rate. We project the two year target price range of Amazon’s stock to be $193 to $209. The stock is currently undervalued. Consequently, our recommendation of Amazon.com is BUY.
Industry Analysis
Amazon.com, Inc. is an American-based multinational electronic commerce company. Headquartered in Seattle, Washington, Amazon was founded in 1994.
As one of the largest online retailers in the world, Amazon claims to offer “Earth’s Biggest Selection”. In addition to online retailing, Amazon also offers programs that enables seller to sell their products on Amazon.com and to fulfill orders through Amazon. It earns fixed fees and revenue share fees etc. though those transactions.
Amazon turned its first profit in the fourth quarter of 2001 and maintained high growth rate since then. We believe that the below are the key factors important to the future success of Amazon.com: * Successful in efforts to expand into international
Introduction
The purpose of this essay is to perform financial statement analysis on Amazon.com, Inc. (NASDAQ: AMZN ). We start with an introduction of Amazon and its industry. We then evaluate the company’s financial position, liquidity, operating capability and financial flexibility using different ratios. To evaluate the financial performance of Amazon.com, Inc we disclose recurring NICO and do full ROE disaggregation.
Amazon.com’s stock price increased from $44.29 per share at the end of fiscal year 2004 to $134.52 per share at the end of fiscal year 2009. Earnings per share increased from $0.63 to $2.06. The stock closed at $118.87 on 02/01/2010.
Recommendation
Amazon.com is a fast growing E-Commerce company. Although facing the recent U.S. and global economic down turn and intense competitions from various industries, its sales increased 28% in 2009, diluted earnings per share increased 31%. Based on our analysis, we project the company to continue maintain the high growth rate. We project the two year target price range of Amazon’s stock to be $193 to $209. The stock is currently undervalued. Consequently, our recommendation of Amazon.com is BUY.
Industry Analysis
Amazon.com, Inc. is an American-based multinational electronic commerce company. Headquartered in Seattle, Washington, Amazon was founded in 1994.
As one of the largest online retailers in the world, Amazon claims to offer “Earth’s Biggest Selection”. In addition to online retailing, Amazon also offers programs that enables seller to sell their products on Amazon.com and to fulfill orders through Amazon. It earns fixed fees and revenue share fees etc. though those transactions.
Amazon turned its first profit in the fourth quarter of 2001 and maintained high growth rate since then. We believe that the below are the key factors important to the future success of Amazon.com: * Successful in efforts to expand into international