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Company : AMAZON

Calculate the required return on investment for your company using various methods including CAPM approach. Calculate the fair value of your company and its expected return. Calculate the implied return for the companys stock. Calculate alpha the risk adjusted excess return. State and explain your opinion as to whether or not you should buy or sell the company.

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7:48 APP2.docx APP2.docx 1/4 SESSUM AN 11. SASA NON 345235205655 SSOS SOS MI WE SSSSS w . 291 Notre courow www.cub.NNNN New SLIDER SLIDE News w SAASSER Free How INN MET 18 2 061 . 20 urowe aatta HO e Confirm 7:48 APP2.docx APP2.docx 2/4 Q 18 2020 CH M 09/03 203 der New en como -anan - - Conchion 1. Looking or the sales data, the sales date has shown brandurgro 5 years growing at CAGR of over 23% 2. Sames pors with Earnings and EPS as well have growne CAGR of strefower sex The indicates strongfundamentals of the 3. The company has not declared dividench over many many years because Amaron la relating the cash flow into the business. 5. Amen investors whose regular income Talking about the cash flow, so, alshe cash flows how shown post CAGR pre Financing Cash Flow. Though the Financing cash flow has shown negative CAGR the latest cash flow is positive s. The company who has plenty of free can flows which it can use the repoy the detrimest Capex or poy dividends. So, that is very huge plus point Amazon is conglomerate technology company focusing on e-commerce, digital streaming, cloud computing, and artificial Intelligence. The current share value of Aman is $2.525 per share, and the analysis predicts the target into a median target 52,730 per share with a high estimate of 53,300 and a low profile share value of St.se Company Background CAGR 2016 135987 =(B2/F2)^(1/5)-1 2371 1 2 3 4 5 6 7 8 9 10 11 All values in USD Millions Sales Sales yoy growth % Earnings Earnings yoy growth % EPS EPS yoy growth % Dividends 2020 386064 -B2/C2-1 21331 =B4/C4-1 41.83 =B6/C6-1 0 2019 280522 =C2/D2-1 11588 =C4/04-1 22.99 =C6/06-1 0 2018 232887 -D2/E2-1 10073 =D4/E4-1 20.15 -06/06-1 0 2017 177866 =E2/F2-1 3033 -E4/F4-1 6.15 -E6/F6-1 0 =(84/F4)^(1/5)-1 4.9 =(86/F6)^(1/5)-1 0 =(811/F11) (1/5)-1 Cash Flows 2020 2019 2018 2017 2016 Net Operating Cash Flow 66064 38514 30723 18365 16443 12 Net Operating Cash Flow Growth =B11/C11-1 =C11/011-1 =D11/E11-1 =E11/F11-1 13 Net Investing Cash Flow -59611 -24281 12369 -27084 -9876 14 Net Investing Cash Flow Growth --(B13/C13-1) --(C13/013-1) - (013/E13-1) -- (E13/F13-1) 15 Net Financing Cash Flow -1104 -10066 -7686 9928 -2911 16 Net Financing Cash Flow Growth --(815/C15-1) --(C15/015-1) =(015/E15-1) = {E15/F15-1) 17 Free Cash Flow 25924 21653 17296 6410 9706 18 Free Cash Flow Growth =817/017-1 =C17/017-1=017/E17-1 =E17/F17-1 -(813/F13)^(1/5)-1 (B15/F1s (1/5) =(817/F17)^(1/5)-1 Conclusion 1. Looking at the sales data, the sales data has shown tremendous growth over the past 5 years growing at a CAGR of over 23%. 2. Sames goes with Earnings and EPS as well which have grown at a CAGR of over 50%. This indicates strong fundamentals of the giant. 3. The company has not declared dividends over many many years because Amazon is reinvesting the cash flows into the business. So, Amazon isn't ideal for those investors who seek regular income. 4. Talking about the cash flows, so, all the cash flows have shown positive CAGR except the Financing Cash Flow. Though the Financing cash flow has shown negative CAGR the latest cash flow is positive. 5. The company also has plenty of free cash flows which it can use the repay the debt or invest in Capex or pay dividends. So, that is a very huge plus point. 1 All values in USD Millions 2020 2019 2018 2017 2016 CAGR 2 Sales $ 386,064 $ 280,522 $ 232,887 $ 177,866 $ 135,987 3 Sales yoy growth % 37.62% 20.45% 30.93% 30.80% 23.215 4 Earnings $ 21,331 $ 11,588 $ 10,073 $ 3,033 $ 2,371 5 Earnings yoy growth 84.08% 15.04% 232.11% 27.92% 55.17% 6 EPS $ 42 $ 23 $ 20 $6 $5 7 EPS yoy growth % 81.95% 14.09% 227.64% 25.51% 53.55% 8 Dividends $ 0.00 $ 0.00 $ 0.00 $ 0.00 $0.00 9 10 Cash Flows 2020 2019 2018 2017 2016 11 Net Operating Cash Flow $ 66,064 $ 38,514 $ 30,723 S 18,365 $16,443 12 Net Operating Cash Flow Growth 71.53% 25.36% 67.29% 11.69% 32.07% 13 Net Investing Cash Flow $ 59,611.00 $ 24,281.00 $ 12,369.00 $ 27,084.00 $ 9,876.00 14 Net Investing Cash Flow Growth -145.50% -96.31% 54.33% -174.24% 43.27% 15 Net Financing Cash Flow $ 1,104.00 $ 10,066,00 $ 7,686.00 $ 9,928.00 $ 2,911.00 16 Net Financing Cash Flow Growth 89.03% -30.97% -177.42% 441.05% -17.63% 17 Free Cash Flow $ 25,924 $21,653 $ 17,296 $ 6,410 $ 9,706 18 Free Cash Flow Growth 19.72% 25.19% 169.83% -33.96% 21.715 19 20 21 22 23 24 CAGR Formula = (Future Value/Beginning Value)^(1)-1 7:48 APP2.docx APP2.docx 1/4 SESSUM AN 11. SASA NON 345235205655 SSOS SOS MI WE SSSSS w . 291 Notre courow www.cub.NNNN New SLIDER SLIDE News w SAASSER Free How INN MET 18 2 061 . 20 urowe aatta HO e Confirm 7:48 APP2.docx APP2.docx 2/4 Q 18 2020 CH M 09/03 203 der New en como -anan - - Conchion 1. Looking or the sales data, the sales date has shown brandurgro 5 years growing at CAGR of over 23% 2. Sames pors with Earnings and EPS as well have growne CAGR of strefower sex The indicates strongfundamentals of the 3. The company has not declared dividench over many many years because Amaron la relating the cash flow into the business. 5. Amen investors whose regular income Talking about the cash flow, so, alshe cash flows how shown post CAGR pre Financing Cash Flow. Though the Financing cash flow has shown negative CAGR the latest cash flow is positive s. The company who has plenty of free can flows which it can use the repoy the detrimest Capex or poy dividends. So, that is very huge plus point Amazon is conglomerate technology company focusing on e-commerce, digital streaming, cloud computing, and artificial Intelligence. The current share value of Aman is $2.525 per share, and the analysis predicts the target into a median target 52,730 per share with a high estimate of 53,300 and a low profile share value of St.se Company Background CAGR 2016 135987 =(B2/F2)^(1/5)-1 2371 1 2 3 4 5 6 7 8 9 10 11 All values in USD Millions Sales Sales yoy growth % Earnings Earnings yoy growth % EPS EPS yoy growth % Dividends 2020 386064 -B2/C2-1 21331 =B4/C4-1 41.83 =B6/C6-1 0 2019 280522 =C2/D2-1 11588 =C4/04-1 22.99 =C6/06-1 0 2018 232887 -D2/E2-1 10073 =D4/E4-1 20.15 -06/06-1 0 2017 177866 =E2/F2-1 3033 -E4/F4-1 6.15 -E6/F6-1 0 =(84/F4)^(1/5)-1 4.9 =(86/F6)^(1/5)-1 0 =(811/F11) (1/5)-1 Cash Flows 2020 2019 2018 2017 2016 Net Operating Cash Flow 66064 38514 30723 18365 16443 12 Net Operating Cash Flow Growth =B11/C11-1 =C11/011-1 =D11/E11-1 =E11/F11-1 13 Net Investing Cash Flow -59611 -24281 12369 -27084 -9876 14 Net Investing Cash Flow Growth --(B13/C13-1) --(C13/013-1) - (013/E13-1) -- (E13/F13-1) 15 Net Financing Cash Flow -1104 -10066 -7686 9928 -2911 16 Net Financing Cash Flow Growth --(815/C15-1) --(C15/015-1) =(015/E15-1) = {E15/F15-1) 17 Free Cash Flow 25924 21653 17296 6410 9706 18 Free Cash Flow Growth =817/017-1 =C17/017-1=017/E17-1 =E17/F17-1 -(813/F13)^(1/5)-1 (B15/F1s (1/5) =(817/F17)^(1/5)-1 Conclusion 1. Looking at the sales data, the sales data has shown tremendous growth over the past 5 years growing at a CAGR of over 23%. 2. Sames goes with Earnings and EPS as well which have grown at a CAGR of over 50%. This indicates strong fundamentals of the giant. 3. The company has not declared dividends over many many years because Amazon is reinvesting the cash flows into the business. So, Amazon isn't ideal for those investors who seek regular income. 4. Talking about the cash flows, so, all the cash flows have shown positive CAGR except the Financing Cash Flow. Though the Financing cash flow has shown negative CAGR the latest cash flow is positive. 5. The company also has plenty of free cash flows which it can use the repay the debt or invest in Capex or pay dividends. So, that is a very huge plus point. 1 All values in USD Millions 2020 2019 2018 2017 2016 CAGR 2 Sales $ 386,064 $ 280,522 $ 232,887 $ 177,866 $ 135,987 3 Sales yoy growth % 37.62% 20.45% 30.93% 30.80% 23.215 4 Earnings $ 21,331 $ 11,588 $ 10,073 $ 3,033 $ 2,371 5 Earnings yoy growth 84.08% 15.04% 232.11% 27.92% 55.17% 6 EPS $ 42 $ 23 $ 20 $6 $5 7 EPS yoy growth % 81.95% 14.09% 227.64% 25.51% 53.55% 8 Dividends $ 0.00 $ 0.00 $ 0.00 $ 0.00 $0.00 9 10 Cash Flows 2020 2019 2018 2017 2016 11 Net Operating Cash Flow $ 66,064 $ 38,514 $ 30,723 S 18,365 $16,443 12 Net Operating Cash Flow Growth 71.53% 25.36% 67.29% 11.69% 32.07% 13 Net Investing Cash Flow $ 59,611.00 $ 24,281.00 $ 12,369.00 $ 27,084.00 $ 9,876.00 14 Net Investing Cash Flow Growth -145.50% -96.31% 54.33% -174.24% 43.27% 15 Net Financing Cash Flow $ 1,104.00 $ 10,066,00 $ 7,686.00 $ 9,928.00 $ 2,911.00 16 Net Financing Cash Flow Growth 89.03% -30.97% -177.42% 441.05% -17.63% 17 Free Cash Flow $ 25,924 $21,653 $ 17,296 $ 6,410 $ 9,706 18 Free Cash Flow Growth 19.72% 25.19% 169.83% -33.96% 21.715 19 20 21 22 23 24 CAGR Formula = (Future Value/Beginning Value)^(1)-1