Essay about Amazon Analysis

1349 Words 6 Pages
Financial Analysis Project

Throughout the last decade, Amazon has become one of the most sustainable companies within its industry. One of the major reasons that Amazon has been able to achieve a long term competitive advantage is by offering superior pricing power, capitalizing on a large market share and creating a well-known brand name. Through these achievements Amazon has been able to produce long term advantages that have made it difficult for other companies to duplicate. Amazon has an elite status within itself, throughout out the past decade it has both surpassed bench marks and created new ones. Amazon has set the bar so high that it would be extremely difficult for a company to
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Company’s finance debt or leverage themselves for many different reasons, such as maintaining ownership, tax deductions, lower interest rates. Companies will also issue bonds which are loans between an investor and a corporation. Generally the investor will agree on the time and periodic interest payments. Unlike a bank loan, the one advantage of issuing bonds is lower interest rates. Also the interest paid can affect corporate profits and companies are in business to make a profit. Issuing bonds also gives companies freedom to operate as they wish, as there are often restrictions attached to bank loans (Smith, 2015). In December 2014 Amazon issued $6 billion worth of debt that shocked much of the industry. The amount of debt issued is twice the amount issued in 2012 to purchase its Seattle headquarters and new warehouses to make delivery to customers more efficient (Lashinsky, 2012). The debt issued gives Amazon the opportunity to increase their financial leverage. The increase in financial leverage means that Amazon is growing its business and in turn we won’t see bottom line growth. Instead we will see top line growth which will result in increased revenues. Amazon’s primary purpose for issuing debt in this case is to fund drones, television programing, and smartphones. Bondholders look for primary purposes such as these when lending their money (Smith, 2015). Amazon’s current debt issuance acts as a way of limiting its equity

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