Interim Report 2:

Perform common size analysis for 3 years. What does this analysis tell you about your company? Are any trends apparent?

Use the extended DuPont equation for 3 years to provide a summary and overview of your firms financial condition

Calculate the cost of each capital component, after-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method. Do these calculations for 3 years.

Estimate the companys WACC for 3 years, as well as the WACC it should use for the future.

The second interim report is due Week 6. This report should make any necessary corrections and build on the first interim report. It should include #6, 7, 8, and 9 above. Attach the balance sheet and income statement to the report.

AMAZON												SUMMARY
Consolidated Balance Sheet (in millions)						Ratio Calculations						2014	2015	2016	Industry Average
											Current	1.12	1.05	1.04	1.62
											Quick	0.92	0.75	0.78	0.83
						Liquidity Ratios					Inventory Turnover	11.18	7.00	7.70	9.12
											Days sales outstanding	34.04	19.29	22.38
ASSETS		2014	2015	2016		Current Ratio			=	Current Assets	Fixed Asset turnover	5.24	4.90	4.67
Cash and cash equilavents		$14,557	$15,890	$19,334						Current Liabilities	Total asset turnover	1.63	1.65	1.63	1.49
Marketable secruities		$2,859	$3,918	$6,647							Debt ratio	15.16%	12.71%	9.23%
Accounts Receivable		$8,299	$5,654	$8,339		Quick Ratio			=	Current Assets - Inventory	Liabilities to total assets	19.71%	20.67%	23.12%
Inventories		$5,612	$10,243	$11,461						Current Liabilities	TIE	0.848	4.865	8.649
Total Current Assets		$31,327	$35,705	$45,781							EBITDA coverage	0.18	2.77	10.85
Property and equipment		$16,967	$21,838	$29,114		Asset Management Ratios					Profit margin	-0.27%	0.56%	1.74%	19.18%
Goodwill		$3,319	$3,759	$3,784							Basic earning power	0.33%	3.45%	5.02%
Other Assets		$2,892	$3,445	$4,723		Inventory			=	COGS	ROA	-0.44%	0.92%	2.84%	7.16%
Total assets		$54,505	$64,747	$83,402		Turnover				Inventory	ROE	-2.24%	4.45%	12.29%	15.72%
											Price/earnings (P/E)	-592.53	529.60	149.91	201.01
Liabilities & Equity						DSO			=	Receivables	Price/cash flow	-592.53	529.60	149.91	55.66
Accounts payable		$16,459	$20,397	$25,309						Annual sales/365	Market/book	13.29	23.58	18.43	23.80
Accrued expenses and other		$9,804	$10,372	$13,739							Dupont Equation	-47.49	123.20	548.25
Unearned revenue		$1,823	$3,118	$4,768		Fixed Asset			=	Sales
Total current liabilities		$28,086	$33,887	$43,816		Turnover				Net fixed assets
Long-term debt		$8,265	$8,227	$7,694
Other long-term liabilities		$7,410	$9,249	$12,607		Total Asset			=	Sales
Common stock, $0.01 par value		$5	$5	$5		Turnover				Total assets
Treasury stock, at cost		-$1,837	-$1,837	-$1,837
Additional paid-in capital		$11,135	$13,394	$17,186		Debt Management Ratios
accumulated other compr. Loss		-511	-723	-985
Retained earnings		$1,949	$2,545	$4,916
Total equity		$26,416	$30,860	$39,586		Debt =				Total Debt
Total liabilities & equity		$54,502	$64,747	$83,402						Total assets
AMAZON						Liabilities to Assets			=	Total liabilities
Income Statement										Total assets
		Fiscal Years
		2014	2015	2016
Net Product sales		$70,080	$79,268	$94,655		Times-Interest-			=	EBIT
Net Services sales		18908	27738	41322		Earned (TIE)				Interest charges
Total net sales		88989	107006	135987
Operating Expenses						EBITDA			=	EBITDA + lease payments
cost of sales		62752	71651	88265		coverage				Int+ loan repmt+lease pmts
fulfillment		10766	13410	17619
marketing		4332	5254	7233						Profitability Ratios
technology and content		9275	12540	16085
General and andmin		1552	1747	2432		Profit margin			=	Net income for common SH
Other operating expenses net		133	171	167						Sales
Total operating expenses		88810	104773	131801
Operating Income		178	2233	4186		Basic earning			=	EBIT
Interest Income		39	50	100		power (BEP)				TA
Interest expense		(210)	(459)	(484)
Other Income (expense)		(118)	(256)	90		Return on			=	Net income for common SH
Total non-operating income (expense)		(289)	(665)	(294)		total assets (ROA)				Total assets
Income before taxes		(111)	1568	3892
Provision for income taxes		(167)	(950)	(1425)		Return on			=	Net income for common SH
Equity-method investment act, net of tax		37	(22)	(96)		common equity				Common equity
Net Income		($241)	$596	$2,371
Other Data		2014	2015	2016		Market Value Ratios
Stock price		$309.09	$675.89	$749.87
Shares outstanding (million)		462	467	474		Price/earnings			=	Price per share
EPS		-0.52	1.28	5.00		(P/E)				Earnings per share
DPS		-0.52	1.25	4.90
Book value per share		$23.25	$28.66	$40.69		Price/CF			=	Price
										CF Per Share
						Market/Book			=	Market price per share
						(M/B)				Book value per share
						Dupont Equation =				PM x TA T/O x EM
									EM =	Total assets
										Common equity
	SUMMARY
	2014				2015		2016	Industry Average
Current	1.12				1.05		1.04	1.62
Quick	0.92				0.75		0.78	0.83
Inventory Turnover	11.18				7.00		7.70	9.12
Days sales outstanding	34.04				19.29		22.38
Fixed Asset turnover	5.24				4.90		4.67
Total asset turnover	1.63				1.65		1.63	1.49
Debt ratio	15.16%				12.71%		9.23%
Liabilities to total assets	19.71%				20.67%		23.12%
TIE	0.848				4.865		8.649
EBITDA coverage	0.18				2.77		10.85
Profit margin	-0.27%				0.56%		1.74%	19.18%
Basic earning power	0.33%				3.45%		5.02%
ROA	-0.44%				0.92%		2.84%	7.16%
ROE	-2.24%				4.45%		12.29%	15.72%
Price/earnings (P/E)	-592.53				529.60		149.91	201.01
Price/cash flow	-592.53				529.60		149.91	55.66
Market/book	13.29				23.58		18.43	23.80
Dupont Equation	-47.49				123.20		548.25