Analysis Of Amazon

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Objective This financial analysis on (“Amazon”) was conducted in order to determine if we should invest in the company. In our analysis, Amazon’s financial statements (income statement, balance sheet and statement of cash flows) were reviewed for the past three years (2008 – 2010), stock performance for the past 10 years (2001 – 2010) as well as key financial ratios compared to its industry. This analysis provides us with a basis to compare Amazon’s historical performance with representative data in order to make our decision. Background Information, a Fortune 500 company, commenced operations in July 1995 with its virtual online store, leveraging the World Wide Web. Founded by Jeff Bezos, Amazon’s first goal was to be the “Earth's most customer-centric company” (Jeff Bezos: Founder and CEO,, with a strong focus on selection, price and convenience. Bezos, who studied computer science and electrical engineering and graduated at the top of his class from Princeton University in 1986, came across a statistic that the Internet was growing at 2,300 percent and was tempted to jump into the world of E-commerce (Jeff Bezos: Founder and CEO, Bezos elected books to be Amazon’s first product category as they offered a large selection (Jeff Bezos: Founder and CEO, As customers began asking for more than just books, Amazon began expanding into other product categories. Today, Amazon offers categories such as electronics, jewelry, business services, and operates fulfillment centers around the globe. In 2010, Amazon generated $34.2 billion in net sales, with a net income of $1.15 billion. Amazon employs approximately 33,700 full time and part time employees ( 2010 Annual Report, pg 4). Amazon, with its corporate office located in Seattle, Washington, was initially incorporated in 1994 in

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