Case 9 in your textbook * Answer the all of the questions at the end of the case study
Case Study – Amazon.com, Inc – Retailing Giant to High-Tech Player? 1. Complete a table on key ratios: * Current Ratio - Current Ratio = CA/CL
What the current ratio does measures if the firm has enough resources to pay its debts over the next 12 months. Comparing current assets to current liabilities. Current Assets | Current Liabilities | Cash $10,500 | Accrued Expenses $6,000 | Credit receivables $11,000 | Accounts payable $7,000 | Inventories $15,000 | Taxes Payable $ 12,000 | Prepaid Expenses $16,000 | Current Mortgage $30,000 | Accounts Receivables 7,000 | | Marketable Securities $3,000 | | Total $62,500 | Total $55,000 |
$62,000 – $55,000 = $7,000 * ROI% - ROI = NP after taxes/Total Assets
Return on investments indicates the returns generated on total assets, and/or the overview profit on investment in percentage form. This formula below is calculated in Du Pont form;
ROI
= $16,000 / $200,000
= 16%
Net Profit
=$16,000 / $100,000
=8%
Total Assets
=$200,000 / $100,000
= 2 times
ROI
8% * 2 times = 16% * ROE(%) - ROE = NP after taxes/Shareholder Equity
The amount of net income returned as a percentage of shareholders equity.
An example would be;
ROE = ($18,000 ÷ $100,000) x ($100,000 ÷ $45,000)
ROE = 18% x 2.22
ROE = 40% * Net Profit Margins (%) - NPM = NI/Revenue

2. Answer the following questions: * * Is Amazon becoming a High-Technology Company? * Does it make sense for Amazon to sell Kindle below its cost? * Should Amazon collect state sales tax in every state? * Should Amazon invest in same day delivery? * Should Amazon expand its streaming content? * Can Amazon compete with Samsung, Sony & Apple?

* Once could argue that