12 Months Ended Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions Dec. 31, 2017 Dec. 31, 2016 Use Excel Formulas in Yellow Sheets $ 118,573 $ 94,665 59,293 41,322 177,866 135,987 Income Statement(Abstract) Net product sales 5 Net service sales 5 Total net sales 7 Operating expenses: B Cost of sales 9 Gross Profit 10 Fulfillment 11 Marketing 12 Technology and content 13 General and administrative 14 Other operating expense, net 15 Total operating expenses 16 Operating income floss) 17 Interest income 18 Interest expense 19 Other income (expense), net 20 Total non-operating income (expense) 21 Income before income taxes 22 Provision for income taxes 23 Equity method investment activity, net of tax 24 Net Income 111,93488,265 65,932 47,722 25,249 17,619 10,069 7,233 22,620 16,085 3,674 2,432 214 167 173,760 131,801 4,106 4,186 202 100 (848) (484) 346 90 (300). (294) 3,8063,892 (769) (1,425) (4) (96) 3,033 $2,371 OOOOOOOOOOOOOOOOO OOO OOOOOOOOOOOOOO 27 Grade on Assignment F8 : x x 12 Months Ended Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions Dec. 31, 2017 Dec. 31, 2016 $ 118,573 59,293 177,866 0 0 0 $ 94,665 41,322 135,987 88,265 47,722 17,619 7,233 16,085 2,432 3 Income Statement(Abstract) 4 Net product sales 5 Net service sales 6 Total net sales 7 Operating expenses: 8 Cost of sales 9 Gross Profit 10 Fulfillment 11 Marketing 12 Technology and content 13 General and administrative 14 Other operating expense, net 15 Total operating expenses 16 Operating income (loss) 17 Interest income 18 interest expense 19 Other income (expense), net 20 Total non operating income (expense) 21 Income before income taxes 22 Provision for income taxes 23 Equity-method investment activity, net of tax 24 Net income 167 111,934 65,932 25,249 10,069 22,620 3,674 214 173,760 4,106 202 848 346 300 3,806 131,801 4,186 100 484 90 294 3,892 1,425 769 $ 3,033 $ 2,371 B Dec. 31, Dec. 31, $ 20,522 $ 19,334 10,4646 ,647 16,047 11,461 13,164 8,339 60,197 45,781 48,866 29,114 13,350 3,784 8,897 4,723 131,310 83,402 1 Consolidated Balance Sheets - USD ($) $ In 2 Current assets: 3 Cash and cash equivalents 4 Marketable securities 5 Inventories 6 Accounts receivable, net and other 7 Total current assets 8 Property and equipment, net 9 Goodwill 10 Other assets 11 Total assets 12 Current liabilities: 13 Accounts payable 14 Accrued expenses and other 15 Unearned revenue 16 Total current liabilities 17 Long-term debt 18 Other lonr-term liabilities 19 Commitments and contingencies (Note 7) 20 Stockholders' equity: 21 Preferred stock. $0.01 par value: Authorized shares 22 Common stock. $0.01 par value: Authorized shares 23 Treasury stock, at cost 24 Additional paid-in capital 25 Accumulated other comprehensive loss 26 Retained earnings 27 Total stockholders' equity 28 Total liabilities and stockholders' equity OOOOOOOOOOOOOOO 34,616 25,309 18,170 13,739 5,097 4,768 57,883 43,816 24,7437,694 20,975 12,607 0 (1,837) 21,389 (484) 8,636 27,709 $ 131,310 (1,837 17,186 (985) 4,916 19,285 $ 83,402 U DEF Dec. 31, Dec. 31, 1 $ 20,522 10,464 16,047 13,164 60,197 48,866 13,350 8,897 131,310 0 $ 19,334 0 6,647 0 11,461 0 8,339 0 45,781 0 29,114 0 3,784 0 4,723 0 83,402 AH 1 Consolidated Balance Sheets - USD ($) $ in 2 Current assets: 3 Cash and cash equivalents 4 Marketable securities 5 Inventories 6 Accounts receivable, net and other 7 Total current assets 8 Property and equipment, net 9 Goodwill 10 Other assets 11 Total assets 12 Current liabilities: 13 Accounts payable 14 Accrued expenses and other 15 Unearned revenue 16 Total current liabilities 17 Long-term debt 18 Other long-term liabilities 19 Commitments and contingencies (Note 7) 20 Stockholders' equity: 21 Preferred stock, $0.01 par value: Authorized 22 Common stock, $0.01 par value: Authorized 23 Treasury stock, at cost 24 Additional paid in capital 25 Accumulated other comprehensive loss 26 Retained earnings Total stockholders' equity 28 Total liabilities and stockholders' equity 34,616 18,170 5,097 57,883 24,743 20,975 0 0 0 0 0 0 25,309 13,739 4,768 43,816 7,694 12,607 (1,837) 21,389 (484) 8,636 27,709 $ 131,310 0 0 (1,837) 0 17,186 0 (985) 0 4,916 0 19,285 0 $ 83,402 The second and fourth pictures require percentages and formulas In order: 1. Amazon Income Statement Horizontal, looking for just finances 2. Amazon Income Statement Vertical, looking for percentages and formula 3. Amazon Balance Sheet Horizontal, looking for just finances again 4. Amazon Balance Sheet Vertical, looking for percentages and formula CHAPTER S. Basics of Analysis 201 EXHIBIT 5-1 Melcher Company Income Statement Illustration of Common-Sure Analysis (Vertical and Horizontal For the Years Ended December 31, (Absolute dollars) 2011 2010 2009 Revenue from sales $100.000 595.000 591,000 Cost of products sold 65.000 60,800 56,420 Gross profit 5000 34,200 34580 Operating expenses Selling expenses 14,000 11.400 10.000 General expenses 16,000 15,200 134650 Total operating expenses 30,000 26.600 23/650 Operating income before income taxes 5.000 7.600 10930 Taxes related to operations 1.500 2.280 3.279 Net income $ 3.500 $ 3,320 $ 7,651 100.0% 65.0 35.0 100.0% 64,0 10 100 % 620 380 1999 2000 1991 1992 for 107989 1993 9900g 1974 1973 12 222 Vertical Common Size Revenue from sales Cost of goods sold Gross profit Operating expenses Selling expenses General expenses Total operating expenses Operating income before income taxes Taxes related to operations Net income Horizontal Common Sie Revenue from sales Cost of goods sold Gross probe Operating expenses Selling expenses General expenses Total operating expenses Operating income before income taxes Taxes related to operations Net Income 110 109.9% 1152 1012 104.4% 1078 989 1000% 1000 1000 114.0 140.0 1172 126.8 1125 1000 1000 1000 1000 1000 1000 457 695 695 457 69.5 Year-to-Year Change Analysis Comparing financial statements over two time periods using absolute amounts and percentages can be meaningful. This approach aids in keeping absolute and percentage changes in perspec tive. For example, a substantial percentage change may not be relevant because of an immate rial absolute change. When performing year-to-year change analysis, follow these rules 1. When an item has value in the base year and none in the next period, the decrease is 100%. 2. A meaningful percent change cannot be computed when one number is positive and the other number is negative. 3. No percent change is computable when there is no figure for the base year. These rules are illustrated in Exhibit 5-2. CHAPTERS of Any 201 DONT 5-1 Melcher Company Incom ent of Comm u nicandal $100,000 $95.000 300 35,000 1000 11 12.00 103330 $7831 Opening nombre income 1929999 | ln mm Total operating pen Year-to-Year Change Analysis Comparing financial serweerdig d peremees can be meanindal. This approach aids in ping ute and pen danges in perpe tive. For example, il percentage change may not be release because of i t ria absolute change. When performing at your change was follow these 1. Whm an item as walue in the bone year and one in the period, the decea 2. A meanindal percent change can be computed when her is positive and the other numbers gative 3. No percent change is comple when there is no figure for the use your These rules we d is Exhibit 5-2