SOUTHEAST UNIVERSITY

Course Name:- Corporate Finance

Course Code:- FIN4133
Section:- 02

Submitted to:-
Syed A. Mamun, PhD, FCMA
Associate Professor
School of Business Studies
Southeast University

Submitted by:-
Name ID
Md. Shafayat Hossen 2015010000261
Abrarul Aman Avin 2014110000073
Mohammed Kashem 2015010000439
Shakir Mahmud Shourav 2015010000454
Md. Sazzadur Rahman 2014010000130

Date of Submission:- 27/06/2018

 A Report on

“Amazon.com Inc.”
Introduction: Amazon Inc.
Amazon.com, Inc. engages in the provision of online retail shopping services. The
company was founded by Jeffrey P. Bezos in July 1994 and is headquartered in Seattle,
WA. The tech giant is the largest Internet retailer in the world as measured by revenue
and market capitalization, and second largest after Alibaba Group in terms of total sales.
Amazon has separate retail websites for the United States, the United Kingdom and
Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan,
China, India, and Mexico. Some websites such as www.amazon.com, www.amazon.ca,
www.amazon.br etc. Amazon also offers international shipping of some of its products to
certain other countries.

Vision
“To be Earth’s most customer-centric company, where customers can find and
discover anything they might want to buy online.”

-This vision statement underscores the organization’s main aim of becoming the best e-
commerce company in the world. The following components or characteristics are
emphasized in Amazon’s vision statement:

 Global reach
 Customer prioritization
 Widest selection of products

Mission
“We strive to offer our customers the lowest possible prices, the best available
selection, and the utmost convenience.”

-This mission statement promises an attractive e-commerce service to satisfy customers’

needs. The following components or features are identifiable in Amazon’s mission
statement:

 Lowest prices
 Best selection
 Utmost convenience
Objective of the company
 Not to discount a small number of products for a limited period of time, but to
offer low prices every day and apply them broadly across our entire product range.
 Achieve a bigger hold on the market of selling groceries, in order to expand and
become even larger business able to compete with other grocery selling
businesses.
 Increase its income by trying to become ever large business every year in its
categories.

Core operation of the company:

The major core operations of the Amazon.com Inc. are:

1. Design of Goods and Services:- Amazon.com addresses concern primarily through

technology. For example, the company uses advanced information and communication
technologies to ensure that its online retail services are efficient and convenient for target
customers. Such technologies are also used to support maximum efficiency of Amazon’s
e-commerce operations.

2. Quality Management:- Amazon.com Inc.’s operations management approach

involves continuous improvement efforts in its e-commerce business. It encourages
employees to be bold and pioneering in creating new ideas to solve problems and
improve the business.

3. Process and Capacity Design:- Amazon.com applies extensive automation to

streamline its business processes by considering online retail service as its main
organizational output, the company automates the ordering process to increase the
capacity to accept as many simultaneous orders as possible.

4. Location Strategy:- Amazon.com Inc. emphasis on the strategic location of

warehouses or fulfillment centers of the online retail business.

5. Layout Design and Strategy:- Amazon.com addresses this objective through efficient
layout designs that align with computer-assisted processes.

6. Job Design and Human Resources:- Amazon’s operations management uses a

combination of in-house employment processes and third-party employment agencies.
For example, workers from these agencies fill temporary positions and are evaluated to
determine suitability for permanent positions, especially in warehouses and fulfillment
centers.
7. Supply Chain Management:- Amazon does so through automation and enabling
suppliers and buyers to access some of its IT assets. For example, sellers adjust supply
levels based on demand data available from the company’s online retail website. Also,
buyers can track order and communicate with suppliers through data available from
Amazon’s website.

8. Inventory Management:- Amazon addresses this strategic decision area through a

finished goods inventory using just-in-time inventory management in some areas. In just-
in-time inventory management, some goods that arrive at the company’s fulfillment
centers are immediately shipped to fulfill customers’ orders. Amazon holds other goods
as part of its finished goods inventory.

9. Scheduling:- Amazon relies on the involvement of suppliers for its online retail
business. Suppliers access the company’s website to determine demand levels and
implement their shipping and delivery schedules accordingly.

10. Maintenance:- Amazon.com Inc.’s operations management involves specialized

teams for maintaining technological assets. Moreover, Amazon is always on the lookout
for advanced technologies to improve its operational efficiency.

Products & Services Offered by Amazon.com Inc.

Amazon.com's product lines available at its website include several media (books, DVDs,
music CDs, videotapes and software), apparel, baby products, consumer
electronics, beauty products, gourmet food, groceries, health and personal-care items,
industrial & scientific supplies, kitchen items, jewelry, watches, lawn and garden items,
musical instruments, sporting goods, tools, automotive items and toys & games.

Amazon.com has a number of products and services available, including:

 Amazon Fresh  Fire tablets

 Amazon Prime  Fire TV
 Amazon Web Services  Video
 Alexa  Kindle Store
 Appstore  Music
 Amazon Drive  Music Unlimited
 Echo  Amazon Digital Game Store
 Kindle  Amazon Studios
 Amazon Fresh  Amazon Wireless
Board of Directors
 Jeffrey P. Bezos, President, Chief Executive Officer and Chairman of the Board

Jeffrey P. Bezos, age 54, has been Chairman of the Board since founding the Company in
1994 and Chief Executive Officer since May 1996. Mr. Bezos served as President from
founding until June 1999 and again from October 2000 to the present. Mr. Bezos'
individual qualifications and skills as a director include his customer-focused point of
view, his willingness to encourage invention, his long-term perspective, and his on-going
contributions as founder and CEO.

Board member since- 1994

 Tom A. Alberg, Independent Director

Tom A. Alberg, age 78, has been a director since June 1996. Mr. Alberg has been a
managing director of Madrona Venture Group, LLC, a venture capital firm, since
September 1999, and a principal in Madrona Investment Group, LLC, a private
investment firm, since January 1996. Prior to co-founding Madrona Investment Group,
Mr. Alberg served as president of LIN Broadcasting Corporation, Executive Vice
President of McCaw Cellular Communications, Inc., and Executive Vice President of
AT&T Wireless Services. Previously, he was chair of the Executive Committee and
Partner at Perkins Coie, the Northwest's largest law firm. Mr. Alberg has served as a
director of Impinj, Inc. since September 2000. His experience as a lawyer, his knowledge
of Amazon from having served as a director since 1996, as well as his customer
experience skills and skills relating to financial statement and accounting matters.

Board member since- 1996

 Thomas O. Ryder, Independent Director

Thomas O. Ryder, age 73, has been a director since November 2002. Mr. Ryder was
Chairman of the Reader's Digest Association, Inc. from April 1998 to December 2006,
and was Chief Executive Officer from April 1998 to December 2005. From 1984 to 1998,
Mr. Ryder worked in several roles at American Express, including as President of
American Express Travel Related Services International. Mr. Ryder has been a director
of Interval Leisure Group, Inc. since May 2016. He served as a director of RPX
Corporation from December 2009 to June 2017, a director of Quad/Graphics, Inc. from
July 2010 to May 2017, a director of Starwood Hotels & Resorts Worldwide, Inc. from
April 2001 to September 2016, and Chairman of the Board of Directors at Virgin Mobile
USA, Inc. from October 2007 to November 2009.

Board member since- 2002

 Patricia Q. Stonesifer, Independent Director

Patricia Q. Stonesifer, age 61, has been a director since February 1997. Ms. Stonesifer
has served as the President and CEO of Martha's Table, a non-profit, since April 2013.
She served as Chair of the Board of Regents of the Smithsonian Institution from January
2009 to January 2012 and as Vice Chair from January 2012 to January 2013. From
September 2008 to January 2012, she served as senior advisor to the Bill and Melinda
Gates Foundation, a private philanthropic organization, where she was Chief Executive
Officer from January 2006 to September 2008 and President and Co-chair from June
1997 to January 2006. Since September 2009, she has also served as a private
philanthropy advisor. From 1988 to 1997, she worked in many roles at Microsoft
Corporation, including as a Senior Vice President of the Interactive Media Division, and
also served as the Chairwoman of the Gates Learning Foundation from 1997 to 1999.
Board member since- 1997

 Jonathan J. Rubinstein, Lead Independent Director

Jonathan J. Rubinstein, age 61, has been a director since December 2010. Mr. Rubinstein
was co-CEO of Bridgewater Associates, LP, a global investment management firm, from
May 2016 to April 2017. Previously, Mr. Rubinstein was Senior Vice President, Product
Innovation, for the Personal Systems Group at the Hewlett-Packard Company (HP), a
multinational information technology company, from July 2011 to January 2012. Mr.
Rubinstein was Chief Executive Officer and President of Palm, Inc., a smartphone
manufacturer, from June 2009 until its acquisition by HP in July 2010, and Chairman of
the Board of Palm, Inc. from October 2007 through the acquisition. Prior to joining Palm,
Mr. Rubinstein was a Senior Vice President at Apple Inc., also serving as the General
Manager of the iPod Division. Mr. Rubinstein served as a director of Qualcomm
Incorporated from May 2013 to May 2016.

Board member since- 2010

 Jamie S. Gorelick, Independent Director

Jamie S. Gorelick, age 67, has been a director since February 2012. Ms. Gorelick has
been a partner with the law firm Wilmer Cutler Pickering Hale and Dorr LLP since July
2003. She has held numerous positions in the U.S. government, serving as Deputy
Attorney General of the United States, General Counsel of the Department of Defense,
Assistant to the Secretary of Energy, and a member of the bipartisan National
Commission on Terrorist Threats Upon the United States. Ms. Gorelick has served as a
director of VeriSign, Inc. since January 2015, a director of United Technologies
Corporation from February 2000 to December 2014, and a director of Schlumberger
Limited from April 2002 to June 2010.

Board member since- 2012

 Judith A. McGrath, Independent Director

Judith A. McGrath, age 65, has been a director since July 2014. Ms. McGrath serves as a
senior advisor to Astronauts Wanted, a multimedia joint venture that Ms. McGrath
formed with Sony Music Entertainment, and served as President of Astronauts Wanted
from June 2013 to March of 2018. The company is currently a subsidiary of Sony
Pictures Television. Ms. McGrath served as Chair and Chief Executive Officer of MTV
Networks Entertainment Group worldwide, a division of Viacom, Inc., including Comedy
Central and Nickelodeon, from July 2004 until May 2011.

Board member since- 2014

 Wendell P. Weeks, Independent Director

Wendell P. Weeks, age 58, has been a director since February 2016. Mr. Weeks has been
the Chief Executive Officer of Corning Incorporated, a glass and materials science
innovator, since April 2005; Chairman of the board of directors since April 2007; and
President since December 2010. He has held leadership roles in financial management,
business development, commercial leadership, and general management across many of
Corning's businesses and technologies since joining the company in 1983. Mr. Weeks has
served as a director of Merck & Co., Inc. since February 2004.

Board member since- 2016

 Daniel P. Huttenlocher, Independent Director

Daniel P. Huttenlocher, age 59, has been a director since September 2016. Mr.
Huttenlocher has been Dean and Vice Provost, Cornell Tech at Cornell University since
2012, and has worked for Cornell University since 1988 in various positions. Mr.
Huttenlocher has served as a director of Corning Incorporated since February 2015.

Board member since- 2016

About the CEO (Jeff Bezos)
Entrepreneur and e-commerce pioneer Jeff Bezos was born on January 12, 1964, in
Albuquerque, New Mexico. Bezos had an early love of computers and studied computer
science and electrical engineering at Princeton University. After graduation he worked on
Wall Street, and in 1990 he became the youngest senior vice president at the investment
firm D.E. Shaw.

He founded Amazon.com, Inc. in 1994 and has been its Chief Executive Officer since
May 1996. Mr. Bezos has been Chairman of Amazon.com Inc. since 1994 and has been
its President since October 2000. Mr. Bezos is the Founder of Bezos Expeditions, LLC.
He is a Principal Advisor at A9.com, Inc. He served as the President at Amazon.com, Inc.
from 1994 to June 1999. He served as the President and Chief Executive Officer at
Padcom, Inc. He worked at the intersection of computer science and finance, helping
build one of the most technically sophisticated quantitative hedge funds on Wall Street
for D. E. Shaw & Co. He served as a Director of Drugstore.com Inc., from August 1998
to June 10, 2004. He has always been interested in anything that can be revolutionized by
computers. Intrigued by the amazing growth in use of the Internet, he created a business
model that leveraged the Internet’s unique ability to deliver huge amounts of information
rapidly and efficiently.

Institutional & Individual Ownership

Institutional investors hold a majority ownership of AMZN through the 59.19% of the
outstanding shares that they control. This interest is also higher than at almost any other
company in the Internet Retail industry-

Ownership
Mutual Fund HoldersOther InstitutionalIndividual Stakeholders

22%

44%

34%
Major Shareholders of the Company
Jeff Bezos, Andrew R. Jassy, Jeffrey M. Blackburn and Jeffery Wilke were
Amazon's four largest individual shareholders.

1. Jeff Bezos-

The number-one shareholder in the company, directly holding approximately

78.89 million shares as of May 2018, is Amazon's chief executive officer (CEO) and
founder, Jeff Bezos.

2. Andrew R. Jassy-

Owning 87,849 shares directly as of May 2018, Andrew R. Jassy is Amazon's second-
largest individual shareholder. Jassy is the CEO of Amazon Web Services, a subsidiary
of Amazon that offers various cloud computing services across the globe.
Before Jassy became the CEO of Amazon Web Services on April 13, 2016, he served as
senior vice president of the group.

3. Jeffrey M. Blackburn-

Jeffrey M. Blackburn is the senior vice president of business development and digital
entertainment Amazon.com, and has been at the company since 1998. He is also the head
of Amazon's M&A, investments and strategic business development worldwide.
Blackburn holds 64,928 shares as of May 2018. He holds 44,928 of those shares directly,
and 20,000 indirectly.

4. Jeffery Wilke-

Jefferey Wilke has been the CEO Worldwide Consumer for Amazon since April 2016
and holds 64,807 shares. He owns 10,000 shares directly and 54,807 indirectly. Wilke
joined Amazon in 1999 as vice-president and general manager, and served as the senior
vice-president for the consumer business prior to his current role.
The revenue and growth rate for the last five year of Amazon Inc.-

Year Revenue (In Billions) Growth Rate

2017 $ 177.87 30.80%

2016 $ 135.99 27.08%

2015 $ 107.01 20.25%

2014 $ 88.99 19.52%

2013 $ 74.45 21.87%

(2012 revenue was $ 61.09)

Interpretation:- We have seen the revenue of the year of 2018 is higher than other years
revenue. The growth rate of the year 2014 is lower than other years.

Gross Profit
Gross profit is the profit a company makes after deducting the costs associated with
making and selling its products, or the costs associated with providing its services. Gross
profit will appear on a company's income statement, and can be calculated with this
formula:

Gross Profit= Net sales-Cost of Goods Sold

Gross Profit (In Millions)

Year Net Sales Cost of Goods Sold Gross Profit

2017 177,866 111,934 65,932

2016 135,987 88,265 47,722

2015 107,006 71,651 35,355

2014 88,988 62,752 26,236

2013 74,452 54,181 20,271

Interpretation:- The gross profit of the year 2017 is higher than other years.

Gross Margin
Gross margin is a financial metric used to assess a company's financial health and
business model by revealing the proportion of money left over from revenues after
accounting for the cost of goods sold. Gross margin, also known as gross profit margin, is
calculated by dividing gross profit by revenues.

Gross Margin= Gross Profit

Total Sales

Gross Margin (In Millions)

Year Gross Profit Total Sales Gross Margin

2017 65,932 177,866 37.07%

2016 47,722 135,987 35.09%

2015 35,355 107,006 33.04%

2014 26,236 88,988 29.48%

2013 20,271 74,452 27.23%

Interpretation:- The gross margin of the year 2017 is higher than other years.

Return on Assets (ROA)

The return on total assets is a ratio that measures a company's earnings before interest
and taxes against its total net assets. The ratio is considered to be an indicator of how
effectively a company is using its assets to generate earnings before contractual
obligations must be paid.

Return on Net Profit

Assets= Total Assets
 Return on Assets (ROA) (In Millions)

Year Total Assets Net Income ROA

2017 131,310 3,033 2.31%

2016 83,402 2,371 2.84%

2015 64,747 596 0.92%

2014 54,505 -241 -0.44%

2013 40,159 274 0.68%

Interpretation:- The ROA of the year 2016 is higher than other years. But the ROA of
the year 2014 brings a negative result. Because there was loss of 241 million dollars in
the year 2014.

Return on Equity (ROE)

Return on equity (ROE) is the amount of net income returned as a percentage of
shareholders equity. Return on equity measures a corporation's profitability by revealing
how much profit a company generates with the money shareholders have invested.

Return on Net Profit

Equity= Total Equity

Return on Equity (ROE) (In Millions)

Year Total Equity Net Income ROE

2017 27,709 3,033 10.95%

2016 19,285 2,371 12.29%

2015 13,384 596 4.45%

2014 10,741 -241 -2.24%

2013 9,746 274 2.81%

Interpretation:- The ROE of the year 2016 is higher than other years. But the ROE of
the year 2014 brings a negative result. Because there was loss of 241 million dollars in
the year 2014.
Assets, Liabilities and Owner’s Equity (In Millions)
Year Assets Liabilities Owners’ Equity

2017 131,310 103,601 27,709

2016 83,402 64,117 19,285

2015 64,747 51,363 13,384

2014 54,505 43,764 10,741

2013 40,159 30,413 9,746

140,000
120,000
100,000
80,000
60,000
40,000
20,000
0

2017 2016 2015 2014 2013

Total Assets 131,310 83,402 64,747 54,505 40,159
Total Liabilities 103,601 64,117 51,363 43,764 30,413
Total Owners Equity 27,709 19,285 13,384 10,741 9,746

Total AssetsTotal LiabilitiesTotal Owners Equity

Interpretation:- We have seen that the total assets of the year 2017 is higher than other
years. The amount of year’s liabilities are higher than owners’ equity. It means that
Amazon.com Inc. has less equity than liability. The company’s total assets has been
raised day by day.

The Stock Markets where the company is listed and per share price
No. Stock Exchange Name Traded As Per Share Price
01 NASDAQ AMZN $ 1691.09
(National Association of Securities
Dealers Automated Quotations)
02 London Stock Exchange AMZNN $ 1585.46
Major Risks Faced by Amazon.com Inc.
 Intense Competition.
 High Government Restricts & Regulations.
 Experience Significant Fluctuations in Our Operating Results and Growth Rate.
 May Not Be Successful in Efforts to Expand into International Market Segments.
 Not Successfully Optimize and Operate Fulfillment Centers, Business Could Be
Harmed.
 May suffer if the company are Unsuccessful in Making, Integrating, and Maintaining
Commercial Agreements, Strategic Alliances, and Other Business Relationships.
 Have Foreign Exchange Risk.
 Loss of Key Senior Management Personnel Could Negatively Affect Business.
 Face Risks Related to System Interruption and Lack of Redundancy.
 We Face Significant Inventory Risk.