Amazon's Financial Assignment: Financial Analysis Of Amazon

Formula: (RETURN ON INVESTMENT: [EQUITY =net income/shareholder’s equity] & [ASSETS=Net income/total assets])
Between the years 2011 and 2012, return of equity (net income divided by shareholder’s equity) decreased from 8.13% to -0.48%. Between 2011 and 2012, return of assets (net income divided by total assets) decreased from 2.5% down to 0.12%. Between the years 2012 and 2013, return of equity increased (-0.48% to 2.81%). Shareholders would have been happy with this slight increase. Between 2012 and 2013, return of assets increased from -0.12% to 0.68%. Between 2013 and 2014, return on assets decreases again from 0.68% to -0.24%. Over and over again, the return of investments seems to fluctuate from positive to negative around zero. RETURN

At the end of 2013, the return on assets was 0.68% and at the end of 2014, the return on assets was -0.44%.
Strengths: Out of the 3 years, Amazon’s strongest point on the return on assets was during the year of 2013 because as seen in the graph, the return on assets during that year was the highest. This shows that during 2013, Amazon was making the most money out of the 3 year period.
Weaknesses: During 2014, Amazon wasn’t doing too well on the return on assets. While Amazon was making the most profit in 2013, Amazon actually lost money in the years 2012 and 2014 but in 2014, Amazon lost more profit than in 2012, making it Amazon’s worst year over the 3-year period.
Suggestions for Improvement: Although in the year 2013, Amazon’s return on assets was the highest over the 3-year period, Amazon was still not making much profit. The return on assets that are over 5% is considered good and Amazon’s return on assets was a lot lower than 5% over the past 3 years. In order to raise the percentage on the return on assets, Amazon is going to have to make more profit but because Amazon makes large investments, Amazon’s return on assets is quite low because of the money that is being used on investments.

EARNINGS PER