Project One

Financial Management
FIN-515
Keller Graduate School of Management

Prepared for: Professor Cynthia Taylor
Prepared by: Abu N Rahman

In current online business marketing competition there are two companies competing each eBay and Amazon. That’s why I choose those companies for financial analysis. Considering availability of information analyzing year 2013
Profitability Ratios
Gross Margin eBay Amazon. $3081, 000/$4530, 000 $6781, 000/$25587, 000
= 0.68 or 68% 0.2650 or 26.50%
Because it shows company retains after incurring the direct costs associated with producing the goods and services sold by a company. Considering that eBay’s gross margin shows they are more efficient than the Amazon. Amazon have larger the cost than the eBay. They sale more than eBay but because of cost their gross profit is less than eBay. If we consider gross margin for an investment it shows eBay is safer than the Amazon for an investment.
Operating Margin eBay Amazon. $1022, 000/$4530, 000 $510, 000/$25587, 000
= .2256 or 22.56% 0.0199 or 1.9%
After operating margin analysis we can say that eBay has a large proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. in this case company is going to left some portion of revenue after pay for debt, interest or other payments
Net Profit Margin eBay Amazon. $850, 000/$4530, 000 $240, 000/$25587, 000
= .01875 or 18.75% .0093 or .93%
Without a doubt every investor will consider Net profit margin before investing in a company or project. In this case after a large number of sales Amazons net profitability ratio is less