Financial Management Unit VI

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ESSAY 4

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Amazon is a global American leading technology corporation headquartered in Seattle, Washington, specializing in e-commerce, cloud services, electronic entertainment, and machine intelligence. And including Google, Apple, Microsoft, and Facebook, it is among the World’s Major firms of the United States’ telecommunication sector. The business was being described as “a few of the world’s largest and most dominant financial and technological powers,” and also “the world ‘s highly successful corporation.” Amazon is a retailer of branded goods and services in Northern America and other countries. It is divided into three divisions: North America, Global, and Amazon.com or Amazon Web Services(AWS). It offers products and goods obtained via third-party vendors for reselling by direct and electronic stores.  Amazon organization was established in 1994, and Seattle, Washington is its headquartered.

Amazon’s investments:

Amazon company is among the largest and most profitable businesses. It quickly had become a global superstar, synonymous with an extensive range of merchandise, low prices, and fast shipment.  Amazon dominates the e-commerce market, and it has barely begun to create innovative competition in traditional stores and many other sectors. AWS, Amazon’s cloud computing, has been the best lucrative component of the company for decades and will continue to be so in 2021. Amazon would almost certainly never raise a large amount of revenue, specifically from internet sales. Income would arrive through third-party vendor utilities, Web services, and perhaps ads (Wu & Gereffi 2018).
Amazon company is an exemption to almost any corporate law. It has evolved through modest origins as a Seattle-based online marketplace to a powerful player in most five significant industrial sectors: retail, logistics, digital electronics, cloud services, and, relatively recently, entertainment and media. Particularly, Amazon’s $13.7 billion acquisition of supermarket retailer Entire Groceries the year before has shaken the grocery market, reflecting Amazon’s highly aggressive foray towards masonry stores.
Following are the main goals achieved by amazon during last year:
· Amazon has made significant investments in fields like shipping and warehouses throughout the previous year.
· Its massive and spectacular acquisitions have stood out among its technology rivals during the last year.
· As sales progress slows, Amazon appears to be planning for the sustainability of its market.

Amazon’s current capital structure:

Regardless of the reality that Amazon’s stock value is comparatively tremendous, the company’s strategic situation has declined dramatically in past decades.  As a result, organizations must strengthen their fiscal stance to generate more revenue and achieve better yields in the industry or sector. Amazon can continue to sell products at fair rates to defend the reputation. It ensures that shoppers can continue to join Amazon’s homepage to get the latest discounts for their top brands. Furthermore, Amazon would continue to do an excellent job in product quality and variety (Djatmiko et al., 2020).
Amazon has become several of the world’s leading businesses, ranking fifth in the U.s, which seems to have the leading internet shopping market for goods and services in the industry. As a result, several researchers suggest that a business with such popularity and sales of $280.5 billion in 2019 seems to have a comparatively small gross profit of $11.59 billion.
The explanation for Amazon’s insufficient revenue is due to the company’s capital structure, which would be heavily reliant on debt. The budget deficit includes the balance owed to investors by the corporation. Amazon has a significant existing obligation to cover in 2015, valued at about “$34 billion”. Accounts liabilities of “$20.397 billion”, including “$10 billion” allocated to unpaid expenditures. Lengthy assets were “$8.235 billion”, and long liabilities were about “$9.926 billion”. The gross liabilities amounted to “$52.06 billion”.
After the 2008 global, economic crash Amazon and several other companies have boosted their flexibility by issuing shares. The quantity of leverage is measured by determining an industry’s interest by the value of revenue owed to investors. Amazon has “$8 billion” in shares at a 3.3 percent rate of interest.

Industry information:

As per industry estimates, Amazon is the largest retailer in the U.S., with up to “386 billion U.S. dollars” in gross revenue in 2020. The majority of the corporation’s income comes from e-commerce purchases of electronics appliances and other goods, supplemented by profits from various sellers, premium utilities, and AWS operations. Due to its worldwide presence and reach, Amazon is now regarded as a popular firm in the world (Wu & Lin, 2018).
While expanding its product offerings expanded its reach, Amazon’s utility earned it consumer satisfaction and sustainability. Its customization software suggested other brands to purchase based on a consumer’s ing experience and information from consumers of similar goods. Its publication of online reviews by customers nurtured a “culture of shoppers” who assisted one another in finding anything from the correct literature to the perfect blender.

References:

Wu, X., & Gereffi, G. (2018). Amazon and Alibaba: Internet governance, business models, and internationalization strategies. In International business in the information and digital age. Emerald Publishing Limited.

Djatmiko, M. B., Chauhan, R. B., Tuguz, N. S., & Shah, S. A. S. (2020). A research study on logistic and e-commerce of Amazon and flip-kart. PalArch’s Journal of Archaeology of Egypt/Egyptology, 17(6), 7863-7882.
Wu, P. J., & Lin, K. C. (2018). Unstructured big data analytics for retrieving e-commerce logistics knowledge. Telematics and Informatics, 35(1), 237-244.