Analyze and compare Amazon.com, Best Buy, and Walmart

The condensed income statements through operating income for Amazon.com, Inc. (AMZN), Best Buy Co., Inc. (BBY), and Walmart Inc. (WMT) for a recent fiscal year follow (in millions):

Line Item Description	Amazon	Best Buy	Walmart
Sales	$280,522	$43,638	$523,964
Cost of sales	(165,536)	(33,590)	(394,605)
Gross profit	$114,986	$10,048	$129,359
Selling, general, and administrative expenses	(100,244)	(7,998)	(108,791)
Operating expenses	(201)	(41)	0
Operating income	$14,541	$2,009	$20,568

Question Content Area

1. Prepare comparative common-sized income statements for each company. Round percentages to one decimal place. If percentages is zero, enter "0". For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

Comparative Income statements

Line Item Description	Amazon	Best Buy	Walmart
Sales	Sales%	Sales%	Sales%
Cost of sales	Cost of sales%	Cost of sales%	Cost of sales%
Gross profit	Gross profit%	Gross profit%	Gross profit%
Selling, general, and administrative expenses	Selling, general, and administrative expenses%	Selling, general, and administrative expenses%	Selling, general, and administrative expenses%
Operating expenses	Operating expenses%	Operating expenses%	Operating expenses%
Operating income	Operating income%	Operating income%	Operating income%

Question Content Area

2. Use the common-sized analysis to compare the financial performance of the three companies

AmazonBest BuyWalmart

has the highest gross profit and operating income on a percentage basis. fill in the blank 2 of 7

AmazonBest BuyWalmart

has a lower gross profit than fill in the blank 3 of 7

AmazonBest BuyWalmart

on a percentage basis, but generates a very strong operating income that is much closer to fill in the blank 4 of 7

AmazonBest BuyWalmart

on a percentage basis. This is consistent with the companys business strategy, in that it seeks to sell a large quantity of items at a very low margin. Comparatively, fill in the blank 5 of 7

AmazonBest BuyWalmart

has gross profit similar to fill in the blank 6 of 7

AmazonBest BuyWalmart

on a percentage basis but much smaller in terms of total dollars. This reflects a decreasing margin on the product mix sold by fill in the blank 7 of 7

AmazonBest BuyWalmart

.

Analyze and compare Amazon.com, Best Buy, and Waimart The condensed income statements through operating income for Amazon.com, Inc. (AMZN), Best Buy Co., Inc. (BBY), and Walmart Inc. (WMT) for a recent fiscal year follow (in millions): 1. Prepare comparative common-sized income statements for each company, Round percentages to one decimal place. If percentages is zero, enter " 0. For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300 ) 2. Use the common-sized analysis to compare the financial performance of the three companies. has the highest gross profit and operating income on a percentage basis. has a lower gross profit than on a percentage basis, but generates a very strong operating income that is much closer to on a percentage basis. This is consistent with the company's business strategy, in that it seeks to sell a large quantity of items at a very low margin. Comparatively, has gross profit similar to on a percentage basis but much smaller in terms of total dollars. This reflects a decreasing margin on the product mix sold by