IV- Financial measure of performance: (Mouad Ougazzou)

By using the
profit and loss EBIT In Millions of USD except Per
account and Share
different ratios
we will be able
to investigate 19,905.0
the financial
14,541.0
situation of the 12,421.0
amazon
company by
4,106.0
looking into its
different results 2017 2018 2019 2020
and margins
EBIT earnings before interest:
EBIT earnings before interest: In terms of the earnings before interest and taxes, in 2018 amazon
their sales were increased, its performance was high, and their management was great, because they
were able to triple its EBIT compared to the last year. Furthermore in 2019 they achieved 17% of
increasement, in addition to that in 2020 and despite the health crisis which all companies were
affected by it negatively, the amazon managed the crisis very well and they were able to increase
their gains up to 36%, and that only shows how good that company.

Days Sales Outstanding

24.39

23.38

22.06

2017 2018 2019

Days Sales Outstanding
Days Sales Outstanding: we observe from the graph shown above, that between 2017 and 2019 the
company is giving more time and that only shows that, it faced difficulties to liquidate its goods and
with that the customers had more time to pay their liabilities to the company. But Amazon stayed
competitive in the market because and by comparing 2017 and 2019, we found that the sales
outstanding were increased by two a half.

Accounts Payable Turnover Days

94.72

93.86

92.27

2017 2018 2019

Accounts Payable Turnover Days

Accounts Payable Turnover Days Regarding the supplier payment time, in 2017 it was 93.75 days
then it was increased to 94,5 days in 2018, and that a sign of the company’s good negotiating of its
supplier payment terms, but in 2019 we observed that the time was down to 92 days, and that has
only one meaning that suppliers want to settle their liabilities as soon as possible, which is
challenging for the company. So, Amazon is obliged to show how good is their management and deal
with this scourge by implement more energy into that. Despite all of that Amazon managed to stay
superior compared to others in its sector, it benefits from the delay of its suppliers, which helps to
have a competitive advantage over its competitors in its market.
 Asset Turnover (Revenue/Avg Assets)
M.USD
1.66
1.58

1.45

2017 2018 2019

Asset Turnover (Revenue/Avg Assets)

Asset Turnover (Revenue/Avg Assets) 1,30 1,35 1,40 1,45 1,50 1,55 1,60 1,65 1,70 2017 2018 2019
Asset Turnover (Revenue/Avg Assets) M. USD26 Regarding asset turnover, the heavy investments
over the last three years caused a decrease in the earns, since between 2017 and 2019 this ratio was
down by USD 0.21 million, i.e, by 12%. Because and according to the graph the company earns less
compared to the amounts it invests

5 Year Average Adj ROE M.USD

15.86

11.22

6.19

2017 2018 2019

Year Average Adj ROE

Year Average Adj ROE ROE measures the return to shareholders for their investment in the company.
By looking into the ratio, shareholders can tell how much the company earn for every single dollar
spent. In addition to that and by observing this ratio amazon notices that there is in increasing in it,
which significantly means that the company earn more in every dollar invested, which means it is
very more profitable and well managed. therefore, it can manage its working capital requirements,
which means that it can liquidate and sell many goods with appropriate profit margins, and manage
the payment terms of its suppliers, so it has good supply chain management because it is highly
competitive. Have an advantage in its e-commerce market.