Centre name School For Higher Education Limited

Learner’s name Anthalia Murray

ABE membership number 6 4 9 1 6 7

Anthalia Murray
By ticking this box, I
Insert your full name
☒ am confirming that the work I am submitting is my own and I have acknowledged ALL
the sources of reference I have used in constructing my assignment.

Date: 15th November 2022

Day Month Year

Amazon is a globally renowned technological company that provides a wide arrange of
technological services who is guided by four principles that encourages their commitment to
customer service, passion for invention, commitment to operational excellence and long term
thinking. (Amazon, 2022)
Amazon has over one million employees around the world with top talents from all industries
and range of backgrounds that provides innovation and good customer services from within
centres, retail locations, data centres, corporate offices, tech hubs and headquarters located in
the Puget Sound region of Washington state and Arlington, Virginia. (Amazon, 2022)
Amazon offers a wide range of products which includes Amazon Prime, Kindle, Fire Tablets and
Fire TV to name a few but their online stores are mainly associated with their name. (Amazon,
2022)
Amazon’s competition consists of Target, Walmart, Best Buy, Netflix, Apple and Google just to
name a few which are also well known companies. (Insider Intelligence, 2022)
Amazon is unique in investing in state of the art training for all employees that wish to improve
their careers as well as paying tuitions for all frontline employees.
Amazon is much more than a technological company as they provide much more than a service,
cares and treats their customers and employees with respect.
 Question 1 20 Marks

(700 words)

A code of conduct can be defined as “a set of values, rules, standards and principles outlining
what employers expect from staff within an organization. A code of conduct could emphasize
ethical attitudes and staff communication policies to prevent conflict or harassment while also
outlining the consequences for poor behaving that violates the code in organizations.” (Valamis,
2022)

While performing their job duties, Amazon.com employees are required to” always act lawfully,
ethically, and in the best interests of Amazon.com. This Code of Business Conduct and Ethics
sets out basic guiding principles. Employees who are unsure whether their conduct or the conduct
of their co-workers complies with the Code of Conduct should contact their manager or the Legal
Department.” (Amazon, 2022)

Corporate governance is the system in which Amazon is being directed and controlled. The
Boards of directors in Amazon are responsible for the governance of their companies. The
shareholders of Amazon role in governance are to appoint the directors and the auditors and to
satisfy themselves that an appropriate governance structure is in place. (ICAEW, 2022)

The Principles of Corporate Governance

While there can be as many principles as a company believes make sense, some of the more
well-known include the following. (Dotdash Meredith, 2022)

Fairness
The board of directors must treat shareholders, employees, vendors, and communities fairly and
with equal consideration. For example, Amazon.com provides equal opportunity in all aspects of
employment and will not tolerate any illegal discrimination or harassment of any kind.
(Amazon, 2022)

Disclosure

The board should provide timely, accurate, and clear information about such things as financial
performance, conflicts of interest, and risks to shareholders and other stakeholders. For example,
Amazon's books, records, accounts and financial statements must be maintained in appropriate
detail, must properly reflect Amazon's transactions and must conform both to applicable law and to
Amazon's system of internal controls. (Amazon, 2022)

Accountability

The board must explain the purpose of a company's activities and the results of its conduct. It and
company leadership are accountable for the assessment of a company's capacity, potential, and
performance. It must communicate issues of importance to shareholders. For example, Amazon's
financial, accounting and legal groups are responsible for procedures designed to assure proper
internal and disclosure controls, and all employees should cooperate with these procedures.
(Amazon, 2022)
Agency Problem

An Agency problem in corporate governance refers to conflicts of interest between a company’s

management and stockholders. (Harkat, T., 2022)

Goals

Goals not being in alignment will occur when the agenda of the stockholders and management
clashes therefore leading to ethical issues with the company legally, separation of ownership and
control, etc. (Srivastav, A., 2022)

Asymmetry of Information

Asymmetry of information can occur when management provide false information to the
stakeholders to portray positive view of the company as they may make unjust decisions and
misuse money either for personal gain or otherwise. (Srivastav, A., 2022)

Ownership versus Control

Ownership versus Control is always crucial for an organization to separate management from
ownership since there is no reason to form a management part. (Srivastav, A., 2022)

Corporate Governance

Corporate Governance and financial management of Amazon’s public financial reports must
contain full, fair, accurate, timely and understandable disclosure as required by law. The
Company's financial, accounting and legal groups are responsible for procedures designed to
assure proper internal and disclosure controls, and all employees should cooperate with these
procedures. (Amazon, 2022)

In conclusion the Committee assists the Board of Directors in fulfilling its oversight responsibility
relating to: Amazon's financial statements and financial reporting process; the qualifications,
independence and performance of Amazon's independent auditors; the performance of Amazon's
internal audit function; and Amazon's compliance with legal and regulatory requirements. In so
doing, the Committee maintains free and open communication with Amazon's independent
auditors, internal audit department and management. (Amazon, 2022)

Word count - 630

 Question 2 20 Marks

(700 words)

Projected Financial Statements are statements that incorporates current trends and expectations
to arrive at a financial picture that management believes it can attain in a future financial period.
This information can be collected from income statement and the balance sheet.
(AccountingTools, 2022) “Amazon’s projected financial statement expects to post fourth-quarter
revenue between $140 billion and $148 billion, representing year-over-year growth of 2% to 8%.”
(Palmer. A., 2022)

The projected income statement as seen in Appendix 1 is a summary of forecasted sales, cost of
sales, and expenses. For companies such as Amazon the projected income statement should be
for the 12 month period. (Alberta, 2022)

The projected cash flow statement can be defined as a listing of expected cash inflows and
outflows for an upcoming period which is usually a year. (Barnard. F., 2022) For example
Amazon’s cash flow from operating activities for the twelve months ending June 30, 2022, was
$73.953B, a 39.8% decline year-over-year.

The projected statement of financial position is also known as the Balance Sheet and is important
for businesses as it predicts what a business expects to own and what it expects to owe at a future
date. (FreshBooks, 2019) “Amazon.com, Inc. reported earnings results for the third quarter and
nine months ended September 30, 2022. For the third quarter, the company reported revenue was
USD 127,101 million compared to USD 110,812 million a year ago.” (investing, 2022)

The reliability principle concerns the financial information of a business, and states that the
information presented in the accounting records and statements should be the most accurate and
relevant information available. (debitoor, 2022) The reliability of financial information is essential to
ensure the credibility and stability of capital markets. (Jianu, L., and Jianu, L., 2021)

Financial ratios offer companies ways to evaluate their performance and compare it to similar
businesses in their industry. It also measures the relationship between two or more components of
financial statements and are used most effectively when results are over several periods are
compared and uncover signs of trouble.

The Profitability ratios

1. Net profit margin = Net Profit/ Sales revenue x 100

It measures the percentage of sales revenue retained by the company after operating expenses,
interest and taxes have been paid. (BDC, 2022)

2. Return on Capital Employed (ROCE) = EBIT/Capital Employed

EBIT = Earning before the interest on tax

Capital Employed = Total assets – current liabilities

As seen calculated in Appendix 4 ROCE is a financial statistic that can be used to analyse the
profitability and capital efficiency of a firm. (Groww, 2022)
 Liquidity Ratios

1. Current Ratio = Current Assets ÷ Current Liabilities

As seen calculated in Appendix 4 the current ratio measures the ability of your business to pay
your current liabilities using your current assets. (Bock, M., 2022)

2. Quick Ratio = Current Assets – Inventory/ Current Liabilities

The quick ratio, also called the acid-test ratio is like the current ratio, but is considered a more
conservative calculation, as it only includes assets that can be converted to cash in 90 days or
less. (Bock, M., 2022)

Working Capital Ratios

1. Trade Receivable Days = Trade receivables/sales revenue x 365

Trade receivables as seen calculated in Appendix 4 are the money owed by one company to
another for products and services that have been sold. (Schibsted. I., 2022)

2. Payables settlement period = (trade payables/cost of sales) * 365 days

Payables settlement period or Creditor Days show the average number of days your business
takes to pay suppliers. It is calculated by dividing trade payables by the average daily purchases
for a set period. (Rangaswami. I., 2018)

3. Inventory Turnover Ratio = (Cost of Goods Sold)/ (Average Inventory)

Inventory turnover, or the inventory turnover ratio, is the number of times a business sells and
replaces its stock of goods during a given period. It considers the cost of goods sold, relative to its
average inventory for a year or in any a set period. (CFI, 2022)

In Conclusion Financial statements are maintained by companies daily and used internally for
business management. Each financial statement is also analysed with vertical analysis to
understand how different categories of the statement are influencing results. Finally, ratio analysis
can be used to isolate some performance metrics in each statement and bring together data points
across statements collectively. (Dotdash Meredith, 2022) Information is considered reliable if it can
be checked, verified, and reviewed with objective evidence. Furthermore, a user should be able to
fully rely on the information presented to be an accurate and faithful representation of that which it
stands to represent which is by using this ratio analysis. (debitoor, 2022)

Word count - 770

 Question 3 20 Marks

(700 words)

Risk

Risk can be defined as a “consequence of uncertainty; risk can be emotional, financial, or

reputational.” (Baranoff, Brockett and Kahane, 2009, p.2) As pertaining to this paper there are
many types of Financial Risks.

Financing Risk

Financing Risk is the risk that a business is unable to finance (or refinance) its activities. “Despite
the stock market collapse, Amazon shares have climbed 30 per cent this year, boosting the
company’s market value to $1.2tn and spent $35.9bn on technology and content, very loosely
defined as research and development.” (Thornhill. J., 2020)

Liquidity Risk

Liquidity risk are risk that a business may be unable to meet short term financial liabilities. (MIU
City University Miami, 2022) “Amazon.com was able to significantly expand their business in
several ways. This was possible because of the cash conversion cycle, as they knew how to use it
to their advantage.” (Bhalla. J., 2020)

Currency Risk

Currency risk is the risk of loss from fluctuating exchange rates. (CFI, 2022) For example
“Currencies have moved very unfavourably for Amazon.com since Amazon.com gave its revenue
guidance. The stock is arguably priced for perfection, and this currency move might be enough to
make Amazon.com miss the revenue line”. (Santos. P., 2018)

Credit Risk
Credit Risk is the risk of default on a debt that may arise from a borrower failing to make required
payments. For example, “Amazon.com Inc is launched a new business offering loans to some of
its online sellers, a move that could boost the growth of its Internet marketplace while exposing it
to potential credit risks as some online merchants lack upfront cash to buy all the inventory.”
(Barr. A., 2012)

Investment Risks

Investment Risk is the probability or likelihood of losses relative to the expected return on an
investment. One of the “risks of investing in Amazon.com, stock is increasing competition, profit
potential uncertainty, revenue growth uncertainty, speculative valuation and share price volatility.”
(Downie, R., 2022)

Evaluation of Financial Risk

The evaluation of Financial Risk can be calculated in the form of the following Gearing Ratios:
 Gearing Ratios 2020 2021
Financial Gearing 2540.81% 2606.78%
Operational Gearing 0.73 0.57
From the calculations above Amazon’s financial growth increased from 2020 to 2021, but their
operational expenditure percentage decreased in 2021 as opposed to 2020. This decrease can be
due to the recent Covid – 19 pandemic where production would have been lower than usual.

Sensitivity Analysis

“Sensitivity Analysis is a tool used in financial modelling to analyse how the different values of a
set of independent variables affect a specific dependent variable under certain specific conditions.”
(Kenton, W., 2022) The advantages of sensitivity analysis are:

“In-depth Analysis

When sensitivity analysis is done, each independent & dependent variable is studied in-depth.

Strengthen “weak spots”

As sensitivity analysis studies each variable independently, it can identify critical variables that
may act as a weakness.

Decision Making

Sensitivity analysis results in a data-backed forecast.

Quality Check

Through sensitivity analysis, the management can know which variables have a high impact on
the success or failure of a project.

Proper Allocation of Resources

As discussed, sensitivity analysis can identify strong & weak areas & measure their impact on the
final objective.” (eFinanceManagement, 2022)

The Disadvantages are:

“Based on Assumptions

Sensitivity analysis is based on historical data & management assumptions.

Not Relative in Nature

Sensitivity analysis considers each variable individually and tries to determine the outcome. ”
(eFinanceManagement, 2022)

For example, Amazon uses a Discounted Cash Flow (DCF) model with their sensitivity analysis,
this model states the value of a company is equal to the present value of its expected future free
cash flows. (Wall street prep, 2022) With this model Amazon yielded the target prices of $2,007
and $2,430.
Scenario Analysis

“Scenario analysis is a technique that provides a rational and structured way to analyse the future.

Key benefits of scenario analysis include:

It helps companies manage risks more proactively by assessing the impact of potential future
events and situations.

It can help businesses make better decisions by investigating the risks and benefits of different
options.

Its challenges include:

Scenario analysis can be a time-consuming process that requires specific skills and expertise,
although modelling tools can help.

It can be difficult to envision all possible scenarios, make realistic assumptions and assign
probabilities to them.” (Ali, R., 2020)

As it pertains to Amazon the “ML – powered furcating is used as their key business metrics, this
built-in ML algorithm in Amazon QuickSight is designed to handle complex real-world scenarios.”
(Amazon Web Services, Inc., 2022)

By doing proper calculations and using these metrics to combat financial risk Amazon can grow
expenditure, less risky investment deals can be made to expand the company and it can remain a
household name on stock and other means.

Word count- 773

 Question 4 20 Marks

(700 words)

Financing activities

“Financing activities are transactions between a business and its lenders and owners to acquire or
return resources. In other words, financing activities fund the company, repay lenders, and provide
owners with a return on investment. Financing activities include:

Issuing and repurchasing equity.

Borrowing and repaying short-term and long-term debt. This activity includes principal payments to
lenders and vendors for most capital purchases, as well as the cost to issue debt. Interest
payments are operating activities, not finance activities.

Paying dividends.

Other contributions from, or distributions to, owners.” (Sylvester, S., 2022)

Short term versus Long term source of finance

“Long-term financing provides business owners with a large amount of capital for extensive, multi-
year use.
The Pros of long term financing include its capacity for high-dollar capital, ideal for businesses that
need large amounts of cash for massive marketing campaigns, extensive product development,
international expansion, and other huge costs of operating a large business. A longer term
repayment allows businesses to keep payments manageable on larger loans.

Some of the cons include:

Stringent financial requirements. Long-term financing might not be an option for businesses that
don’t have massive cash flow already.
Limited choice. When you seek out long-term financing, it’s generally with a large, traditional bank,
and you receive funding on their terms with limited choice, flexibility, or collaboration to find the
right solution for you.
Collateral.” (Mulligan Funding, 2021)

“Short – term financing is a solution that’s growing in popularity for small and medium-sized
businesses that need working capital quickly.

Some pros include:

Short application and funding process. Short-term financing applications often require less
supporting documentation, which means a faster application process.
Pay less in fees over time.
Higher approval rates.
No collateral required.

A primary con of short-term financing is that you may not be able to secure unusually large
amounts of capital.” (Mulligan Funding, 2021)

As it pertains to Internal sources versus External sources for short – term financing collateral is not
required in Internal sources but is required in external sources. Applications are used in internal
sources when the requirement of funding is limited but, external sources applications are used
when the requirement of funding is huge. Capital is low in internal sources where as it is medium
to high in external sources.

As it pertains to Long – term financing capital is low in internal sources where as it is medium to
high in external sources. The amount sourced can be low to medium in internal sources but,
medium to huge in external sources. In the external sources the idea is to expand from local to
national to global.” (Mukhopadhyay, S., 2022)

Working Capital

“Working capital is the money available to meet your current, short-term obligations.”
(Bank of America Corporation, 2022) “Amazon's Working Capital is a measure of company
efficiency and operating liquidity.” (Macroaxis, 2022)

The “Matching principle is an accounting principle for recording revenues and expenses. It
requires that a business records expenses alongside revenues earned.” (FreshBooks, 2022) By
using short- term source of finance for working capitals needs as “short-term working capital
finance taken from banks and other NBFCs generally has a higher interest rate than spontaneous
and long-term sources. But they offer the businesses great time flexibility, due to which finance
managers prefer this.” (myndfintech, 2020)

As it pertains to cash “businesses, mostly MSMEs, can get loans from commercial banks with or
without offering collateral security. There is no legal formality involved except creating a mortgage
on the assets. Repayment can be made in parts or lump sum at the time of loan maturity.”
(myndfintech, 2020)

As it pertains to trade receivables “the availability of trade credit depends on various factors like
the buyer’s reputation, financial position, business volume, and degree of competition, among
others. However, when a business avails trade credit, it stands to lose the benefit of cash
discount, which they would earn if they made the payment within 7 to 10 days of making the
purchase.” (myndfintech, 2020)

As it pertains to inventory the merchandise that can be quickly sold or liquidated in less than one
year.

By maintaining the three discussed areas Cash, Trade Receivables and Inventory Amazon can
increase financial growth, increase and improve on trade relationships and improve on wastage of
products by its quick liquidation and sale.

In conclusion by utilizing the short – term source of finance this can assist Amazon in covering any
expenditure gaps, with zero collateral requirements while being a faster and more flexible means
of financing that can have a positive impact on Amazon’s turnover ratio which expands the
working capital for Amazon. (Velotrade, 2022)

Word count - 761

 Question 5 20 Marks

(700 words)

Non – Financial factors in Decision Making

“Non-financial information is essential for building trust in society by responding to the

expectations and needs of society and for communicating with external stakeholders, including
investors, regarding medium- and long-term value creation. It is an important element to be
incorporated into and used effectively in decision-making mechanisms.” (PwC, 2021) Non-financial
factors to consider include: meeting the requirements of current and future legislation, matching
industry standards and good practice, improving staff morale, making it easier to recruit and retain
employees and improving relationships with suppliers and customers. (NIBusiness Info. CO. UK,
2022)

Strategy
Amazon highlights affordability and more customer-friendly elements, making it unique from its
competition. Its investments, therefore, must be synchronized with the key business outcomes.
“Amazon's generic strategy is cost leadership in a broad market segmentation, but the company
also uses differentiation. The company’s differentiation strategy is fast paced delivery services and
having more products and services than competitors.
Another way that Amazon has used differentiation is the cutting-edge technology that is
used for both consumers and producers.” (Flamand, O., Wisher, A. and Riley, S., 2020)

Flexibility

Amazon will continue growing over the years as they are rewarded for providing flexibility to
customers. Amazon retail customers have the flexibility of being able to shop from home at any
time of day. Amazon Web Services (AWS) gives start-ups the flexibility of being able to compete
with giant incumbents by investing in technology on an as-needed basis without requiring large
sums of capital upfront. On March 17, Amazon announced that they were re-prioritizing shipping
based on new needs for essential items due to the COVID-19 pandemic. (Sprague. E., 2020)

Creditworthiness

“Creditworthiness is the ability of your customers to pay you, which is why it’s important to
understand how to determine creditworthiness before you extend trade credit. To determine the
creditworthiness of a customer, you need to understand their reputation for paying on time and
their capacity to continue to do so.” (Allianz Trade, 2022) “Amazon financing encompasses a
range of credit product and service offerings by Amazon.com to help consumer and small
business customers to pay for purchases over time. Terms and conditions vary depending on
creditworthiness and the structure of loans involve both instalment and open-ended credit
arrangements.” (Investopedia, 2022)

Capability
Amazon’s capability for rapid technological innovation is a strength that enables strategic
adjustment to technological trends in the industry. Amazon.com Inc.’s organizational culture helps
support this innovation capability through human resource inputs and Jeff Bezos’s leadership. For
example, corporate cultural expectations for innovative ideas facilitate actual technological
innovation in business processes. Such internal factors in this aspect of the SWOT analysis
support business development toward the fulfilment of Amazon’s corporate mission statement and
corporate vision statement. (Greenspan. R., 2022)

Market Reaction/Competition

“Even companies that do analyse their competitors usually fail to consider that a rival might
choose not to respond to a strategic move. In ignoring that possibility, the strategist lowers his
estimate of the expected value of his company’s move: the higher the perceived probability of
counteraction by competitors, the lower the expected payoff.” (Coyne, K., and Horn, J., 2022) To
compete with companies, Amazon is investing in its products, including by hiring product
managers for device solutions. This has helped Alexa move from the home and office into brick-
and-mortar or point-of-sale (POS) environments. (CB Information Services, 2022)

In conclusion the make or buy decision allows businesses to make an informed decision on
whether to manufacture specific products in house, or to purchase them from external suppliers.
Some common reasons a business may feel the need to carry out a make or buy assessment
include changing demand, a diminishing capacity, or problems with current suppliers. Therefore,
it’s important not to overlook the non-financial factors that can have a big impact on your
company’s final decision. (Vendigital, 2022)

Word Count - 635

Reference List

Baranoff, E., Brockett, P. and Kahane, Y. (2009) Risk Management for Enterprises and Individuals
ISBN 13: 9780982361801 Saylor Foundation, p. 2

Accounting Tools (2022) Projected Financial Statements definition Available at:

https://www.accountingtools.com/articles/projected-financial-
statements#:~:text=What%20are%20Projected%20Financial%20Statements,income%20statemen
t%20and%20balance%20sheet. (Accessed: 30th October 2022)

Alberta (2022) Preparing financial projections and monitoring results Available at:
https://www.alberta.ca/preparing-financial-projections-and-monitoring-
results.aspx#:~:text=The%20Projected%20Income%20Statement%20is,compared%20to%20your
%20previous%20results. (Accessed: 30th October 2022)

Ali, R. (2020) Scenario Analysis Explained Available at:

https://www.netsuite.com/portal/resource/articles/financial-management/scenario-analysis.shtml
(Accessed: 8th November 2022)

Allianz Trade (2022) How to Determine the Creditworthiness of a Company

Available at:
https://www.allianz-trade.com/en_US/insights/determining-customer-
creditworthiness.html#:~:text=Calculate%20the%20Company's%20Debt%2Dto,payments%20by%
20gross%20monthly%20income. (Accessed: 9th November 2022)

Amazon Web Services (2022) Forecasting and creating what-if scenarios with Amazon QuickSight
Available at:
https://docs.aws.amazon.com/quicksight/latest/user/forecasts-and-whatifs.html
(Accessed: 8th November 2022)

Amazon (2021) Annual Report 2021 p. 46, 47 and 49 Available at:

https://ir.aboutamazon.com/annual-reports-proxies-and-shareholder-letters/default.aspx
(Accessed: 12th November 2022)

Amazon (2022) About Us, Who We Are Available at:

https://www.aboutamazon.com/about-us (Accessed: 10th September 2022).

Ballah, J. (2020) Performance of Amazon during the Corona-Crisis and Dot-com Bubble. Corporate
Strategy, Liquidity, Revenue and Profit Available at:
https://www.grin.com/document/1000556 (Accessed: 7th November 2022)

Barr, A. (2012) Amazon offering loans to its online sellers Available at:
https://www.reuters.com/article/uk-amazon-lending-idUKBRE88Q1CA20120927
(Accessed: 7th November 2022)

Barnard, F. (2022) The Projected Cash Flow Statement Available at:

https://www.extension.purdue.edu/extmedia/ec/ec-
616.html#:~:text=A%20projected%20cash%20flow%20statement%20is%20best%20defined%20a
s%20a,they%20are%20expected%20to%20occur.
(Accessed: 30th October 2022)

BDC (2022) Net Profit Margin Available at:

https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/financial-tools/net-profit-margin
(Accessed: 30th October 2022)
Bock, M. (2022) Current Ratio vs. Quick Ratio: Learn the Difference Available at:
https://www.fool.com/the-ascent/small-business/accounting/articles/current-ratio-vs-quick-ratio/
(Accessed: 30th October 2022)

CB Information Services (2022) Everything you need to know about what Amazon is doing in
financial services Available at:
https://www.cbinsights.com/research/report/amazon-across-financial-services-fintech/ (Accessed:
9th November 2022)

CFI (2022) Currency Risk Available at:

https://corporatefinanceinstitute.com/resources/foreign-exchange/currency-risk/
(Accessed: 7th November 2022)

CFI (2022) Inventory Turnover Available at:

https://corporatefinanceinstitute.com/resources/accounting/inventory-turnover/
(Accessed: 30th October 2022)

Coyne, K. and Horn, J. (2022) Predicting Your Competitor’s Reaction Available at:
https://hbr.org/2009/04/predicting-your-competitors-reaction
(Accessed: 9th November 2022)

Debitoor (2022) Reliability principle - What is the reliability principle? Available at:
https://debitoor.com/dictionary/reliability-
principle#:~:text=What%20does%20the%20reliability%20principle,accurate%20and%20relevant%
20information%20available. (Accessed: 30th October 2022)

Dotdash Meredith (2022) Corporate Governance Definition: How It Works, Principles, and Examples
Available at:
https://www.investopedia.com/terms/c/corporategovernance.asp
(Accessed: 25th October 2022)

Downie, R. (2022) The Biggest Risks of Investing in Amazon Stock Available at:
https://www.investopedia.com/articles/markets/100215/biggest-risks-investing-amazon-stock.asp
(Accessed: 7th November 2022)

eFinanceManagement (2022) Advantages and Disadvantages of Sensitivity Analysis

Meaning of Sensitivity Analysis Available at:
https://efinancemanagement.com/investment-decisions/advantages-disadvantages-of-sensitive-
analysis (Accessed: 7th November 2022)

Flamand, O., Wisher, A. and Riley, S., (2020) Strategic Plan: Amazon Available at:
https://scholarworks.umt.edu/cgi/viewcontent.cgi?article=1330&context=utpp (Accessed: 9th
November 2022)

Fresh Books (2019) Forecasting a Balance Sheet | The Small Business Guide to Financial Forecasts
Available at:
https://www.freshbooks.com/hub/accounting/forecast-balance-
sheet#:~:text=A%20balance%20sheet%2C%20also%20called,at%20a%20specific%20future%20
date. (Accessed: 30th October 2022)

Greenspan, R. (2022) Amazon SWOT Analysis & Recommendations Available at:

https://panmore.com/amazon-com-inc-swot-analysis-recommendations
(Accessed: 9th November 2022)
Groww (2022) Return on Capital Employed (ROCE) Available at:
https://groww.in/p/return-on-capital-employed (Accessed: 30th October 2022)

Harkat, T. (2022) What is the Agency Problem? Available at:

https://study.com/learn/lesson/agency-problem-finance-overview-duties-examples.html
(Accessed: 29th October 2022)

Insider Intelligence (2022) Amazon Revenue Breakdown by segment Available at:

https://www.insiderintelligence.com/insights/amazon-revenue/
(Accessed: 12th September 2022)

Investing (2022) Amazon.com Inc (AMZN) Available at:

https://www.investing.com/equities/amazon-com-inc-financial-summary
(Accessed: 30th October 2022)

Jianu, L. and Jianu, L. (2021) Reliability of Financial Information from the Perspective of Benford’s
Law Available at:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8145560/
(Accessed: 30th October 2022)

Kenton, W. (2022) Sensitivity Analysis Definition Available at:

https://www.investopedia.com/terms/s/sensitivityanalysis.asp#:~:text=Sensitivity%20analysis%20d
etermines%20how%20different,to%20the%20model's%20overall%20uncertainty.
(Accessed: 7th November 2022)

Macroaxis (2022) Amazon Working Capital Available at:

https://www.macroaxis.com/invest/ratio/AMZN/Working-Capital
(Accessed: 8th November 2022)

MIU City University Miami (2022) How do I calculate the liquidity risk of a company? Available at:
https://miuniversity.edu/news/how-do-i-calculate-the-liquidity-risk-of-a-company/
(Accessed: 7th November 2022)

Mulligan Funding (2021) Long-Term vs. Short-Term Business Financing: Which is Right for Your
Business? Available at: https://www.mulliganfunding.com/blog/long-term-vs-short-term-business-
financing-which-is-right-for-your-business/
(Accessed: 8th November 2022)

Mukhopadhyay, S., (2022) Internal vs External Financing | Top 7 Differences (Infographics)

Available at:
https://www.wallstreetmojo.com/internal-vs-external-financing/
(Accessed: 8th November 2022)

Myndfintech (2020) Sources of Working Capital Available at:

https://myndfin.com/sources-of-working-
capital/#:~:text=Short%2Dterm%20working%20capital%20finance,which%20finance%20manager
s%20prefer%20this. (Accessed: 8th November 2022)

Nibusinessinfo.co.uk (2022) Investment appraisal techniques

Non-financial factors for investment appraisal Available at:
https://www.nibusinessinfo.co.uk/content/non-financial-factors-investment-appraisal
(Accessed: 15th November 2022
Palmer, A. (2022) Amazon Stock sinks 13% on weak fourth quarter guidance Available at:
https://www.cnbc.com/2022/10/27/amazon-amzn-earnings-q3-2022.html
(Accessed: 30th October 2022)

PwC (2021) Management of non-financial information: Corporate value creation insights from
advanced case studies Available at:
https://www.pwc.com/jp/en/knowledge/thoughtleadership/non-financial-information-
management.html (Accessed: 8th November 2022)

Rangaswami, I. (2018) How to calculate Credit Days Available at:

https://fluidly.com/blog/creditor-days-calculator/ (Accessed: 30th October 2022)

Santos, P. (2018) Amazon.Com Faces Currency Risk Into The Q2 2018 Report Available at:
https://seekingalpha.com/article/4190194-amazon-com-faces-currency-risk-q2-2018-report
(Accessed: 7th November 2022)

Schibsted, I. (2022) Trade receivables | Definition & importance Available at:

https://www.chaserhq.com/blog/trade-receivables-definition-importance
(Accessed: 30th October 2022)

Srivastav, A. (2022) Agency Problem Available at:

https://www.wallstreetmojo.com/agency-
problem/#:~:text=The%20three%20types%20of%20agency,customers%2C%20community%20gro
ups%2C%20etc. (Accessed: 29th October 2022)

Sprangue, E. (2020) Amazon is Providing Flexibility Available at:

https://seekingalpha.com/article/4335118-amazon-is-providing-flexibility
(Accessed: 9th November 2022)

Sylvester, S., (2022) What Are Financing Activities? Available at:

https://www.legalzoom.com/articles/what-are-financing-activities
(Accessed: 8th November 2022)

The Institute of Chartered Accountants in England and Wales (ICAEW) (2022) Available at:
https://www.icaew.com/technical/corporate-governance/principles/principles-articles/does-
corporate-governance-
matter#:~:text=Corporate%20governance%20is%20the%20system,governance%20structure%20i
s%20in%20place (Accessed: 25th October 2022)

Thornhill, J. (2020) Amazon Thrives in the crisis but still faces risks Available at:
https://www.ft.com/content/1deb1a6a-82e5-11ea-b872-8db45d5f6714
(Accessed: 7th November 2022)

Valmis (2022) Code of Conduct and Ethics: Examples and What to include Available at:
https://www.valamis.com/hub/code-of- (Accessed: 26th October 2022)

Velotrade (2022) What is Working Capital Financing? Available at:

https://www.velotrade.com/blog/what-is-working-capital-financing/
(Accessed: 8th November 2022)
Vendigital (2022) 3 non-financial factors you should consider in your make or buy decisions
Available at: https://vendigital.com/categories/blogs/3-non-financial-factors-you-should-consider-in-
your-make-or-buy
decisions/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration
(Accessed: 9th November 2022)

Wall Street Prep (2022) Amazon DCF Valuation Model (AMZN)

Guide to Building a DCF Valuation Model of Amazon Available at:
https://www.wallstreetprep.com/knowledge/amazon-valuation-model/
(Accessed: 7th November 2022)
Appendix

Appendix 1: Amazon Statement of Operations for 2020 and 2021

Source: (Amazon 2021 Annual Report, p. 47)

Appendix 2: Amazon Statement of Cash Flow for 2020 and 2021

Source: (Amazon 2021 Annual Report, p. 46)

Appendix 3: Amazon Statement of Balance Sheet for 2020 and 2021

Source: (Amazon 2021 Annual Report, p. 49)

Appendix 4: Ratios calculated from Amazon statements for 2020 and 2021

Ratios 2020 2021

ROCE 96871.03% 147824.55%
Current Ratio 1.05 1.14
Trade Recievable days 212.66 331.45
Source: Created by the author for the purpose of this assignment