Financial Statement Analysis Case 4 (Essay)

The incredible growth of Amazon.com has put fear into the hearts of traditional retailers. Amazon's stock price has soared to amazing levels. However, it is often pointed out in the financial press that it took the company several years to report its first profit. The following financial information is taken from a recent annual report.

($ in millions) Current Year Prior Year

Current assets $31,327 $24,625

Total assets 54,505 40,159

Current liabilities 28,089 22,980

Total liabilities 43,764 30,413

Cash provided by operations 6,842 5,475

Capital expenditures 4,893 3,444

Dividends paid

Net income(loss) (241) 274

Sales 88,988 74,452

Discuss its ability to finance expansion from internally generated cash. Thus far Amazon has avoided purchasing large warehouses. Instead, it has used those of others. It is possible, however, that in order to increase customer satisfaction the company may have to build its own warehouses. If this happens, how might your impression of its ability to finance expansion change?