Use the information for Amazon 2018. Assume that cost of sales and fulfillment are variable and that all remains operating cost are fixed
A) Calculate the Sales Break Even, Earnings before interest tax (EBITbe) break even), degree operating leverage , degree financial leverage, degree combined leverage
B) Use you degree combined leverage to answer, if sales increased by 10% what will be the new value for basic EPS (compared to the 2018 value)?
please show/explain in excel
AMAZON. COM, INC. CONSOLIDATED STATEMENT S OF OPERATIONS I'm millions , except per share datay Year Ended December* $ 1 . 2016 2017 2018 Net product sales $4.605 5 |18.573 5. 141.915 Net service sales $1, 123 50, 293 9:0, 972 Total net sales 135.987 171. 860 237,8 87 Operating expenses` Cost of sales 1 11, 934 135, 150 Fulfillment 17,619 25, 245 $4, 127 Marketing 7, 233 10.069 13 , 814 Technology and content 16. 085 12, 620 18, $37 General and administrative 3, 433 3, 674 4, 3:30 Other operating Expense , net 167 214 20 0 Total operating expenses 131, 8:01 173, 760 2:20. 165 Operating income $. 186 $. 106 12, 421 Interest income* 100 202 $40 Interest expense |484) ($48) [ 1, 417} Other income (expense) , net 346 ( 183) Total non - operating income ( expense* ( 1 , 160) Income before income taxes 3, 892 1 1, 201 Provision for income taxes ( 1, 425) (765) [ 1, 197) Equity- method investment activity , ner of tax 19 5 ) net income 7. 371 3.033 10,073 Basic comings per share 5. 01 6. 32 20. 6} Diluted comings per share 6. 15 20. 14 Weighted- average share ; lived in computation of comings per share ! Basic $ 74 Diluted ``` accompanying notes to consolidated financial statements.AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31. 2017 2018 ASSETS Cunent assets: Cash and cash equivalents 20.522 S 31,750 Marketable secuntics 10.464 9.500 Inventone 16.047 17,174 Accounts receivable, net and other 13.164 16.677 Total current assets 60,197 75,101 Property and equipment, net 48.866 61,797 Goodwill 13,350 14,548 Other assets 8.897 11,202 Total assets 131310 162 648 LIABILITIES AND STOCKHOLDERS' EQUITY Cument liabilities Accounts payable 34,616 S 38,192 Accrued expenses and other 18,170 23,663 Unearned revenue 5,097 6.536 Total current liabilities 57.883 68 391 Long-term debt 24,743 23,495 Other long-term liabilities 20,975 27,213 Commitments and contingencies (Note 7) Stockholders" equity: Preferred stock, $0.01 par value Authorized shares - issued and outstanding shares - none Common stock, 50.01 par value: Authorized shares -5,000 Issued shares - 507 and 514 Outstanding shares - 484 and 491 Treasury stock, at cost (1,837) (1,837) Additional paid-in capital 21,389 26,791 Accumulated other comprehensive loss (484) (1,035) Retained camings 8.636 19,625 Total stockholders' equity 27,709 13 549 Total liabilities and stockholders' equity 131,310 162,648 See accompanying notes to consolidated financial statements
