Financial Statement Problem -
Amazom financial statement
1. Compute trend analyses for net sales and net income. Use 2007 as the base year. What is the most notable aspect of this data? Explain your answer and how you arrived at your conclusion, step by step.
2. Compute inventory turnover for 2009 and 2008. The inventory balance at December 31, 2009 was $2,171 million. Do the trend of net income from 2008 to 2009 and the change in the rate of inventory turnover tell the same story or a different story? Explain your answer and how you arrived at your conclusion in detail, step by step.
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Amazon, Inc. Consolidated Statements of Operations (in millions, except per share data)
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Yr. ended Dec.31,
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2009
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2008
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2007
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Net sales
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$24,509
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$19,166
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$14,835
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Cost of Sales
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18,978
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14,896
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11,482
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Gross profit
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5,531
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4,270
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3,353
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Operating expenses (1):
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Fulfillment
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2,052
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1,658
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1,292
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Marketing
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680
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482
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344
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Technology and content
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1,240
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1,033
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818
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General and administrative
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328
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279
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235
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Other operating expense (income), net
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102
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-24
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9
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Total operating expenses
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4,402
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3,428
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2,698
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Income from operations
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1,129
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842
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655
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Interest income
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37
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83
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90
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Interest expense
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-34
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-71
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-77
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Other income (expense), net
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29
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47
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-8
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Total non-operating income (expense)
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32
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59
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5
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Income before income taxes
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1,161
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901
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660
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Provision for income taxes
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-253
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-247
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-184
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Equity-method investment activity, net of tax
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-6
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-9
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Net income
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$902
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$645
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$476
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Amazon Inc. Consolidated Balance Sheet (in millions, except per share data)
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December 31,
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2009
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2008
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Assets
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Current assets
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Cash and cash equivalents
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$3,444
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$2,769
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Marketable securities
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2,922
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958
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Inventories
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2,171
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1,399
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Accounts receivable, net and other
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988
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827
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Deferred tax assets
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272
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204
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Total current assets
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9,797
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6,157
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Fixed assets, net
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1,290
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854
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Deferred tax assets
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18
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145
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Goodwill
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1,234
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438
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Other assets
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1,474
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720
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Total assets
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13,813
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8,314
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