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Amazon.com, Inc. Financial Analysis
Amazon.com is a Fortune 500 company specializing in e-commerce. Amazon was one of
the first companies of its type to sell goods over the Internet. Jeff Bezos founded the
company in 1994 and then launched in 1995 as an online bookstore. Amazon quickly
gained followers and expanded by adding many new items including software, electronics,
clothing, furniture, and toys. Bezos was named Person of the Year in Time Magazine in
1999 due to the success of Amazon in promoting online shopping. Thoroughly reviewing
the financial statements of Amazon shows a decrease in profitability over the past three
years. While the total revenue and gross profit have increased greatly over the three year
period, the operating and interest expenses have also increased leading to a large decrease
in net income. In the most recent year of 2012 Amazon experienced a negative net income
of $39 million. The most important components required for a detailed financial analysis
can be acquired by looking at the income statement, balance sheet and statement of cash
flow.
For the year 2012 Amazon reported a negative net income of $39 million. It is critical to
note that the net income had seen a steady increase from $645 million to $1,525 million
during the years 2008 to 2010 followed by a sharp decrease from $1,525 million to
negative $39 million during the years 2010 to 2012. The large decrease in net income
during the years 2011 and 2012 were mainly due to the sizeable increase in operating
