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and discuss the following for each of the years: 2010, 2011, 2012, 2013, and 201

ID: 364157 • Letter: A

Question

     and discuss the following for each of the years: 2010, 2011, 2012, 2013, and 2014. Carry the

     calculations to two decimal places.

     A. Net product sales growth (%): [(Net product sales of current year – Net product sales of

           previous year)/Net product sales of previous year) x 100]

           *Please note that for the year 2010, just put n/a, meaning not applicable or impossible to

           calculate.

     B. Net services sales growth (%): [(Net services sales of current year – Net services sales of

           previous year)/Net services sales of previous year) x 100]

           *Please note that for the year 2010, just put n/a, meaning not applicable or impossible to

           calculate.

     C. Net sales growth (%): [(Net sales of current year – Net sales of previous year)/Net sales

                                                of previous year) x 100]

           *Please note that for the year 2010, just put n/a, meaning not applicable or impossible to

           calculate.

     D. Gross margin (%): (Gross profit/Net sales) x 100

     E. Fulfillment as a percentage of the cost of sales: (Fulfillment /Cost of sales) x 100

     F. Marketing as a percentage of the cost of sales: (Marketing/Cost of sales) x 100

     G. Technology and content as a percentage of net product sales: (Technology and

           content/Net product sales) x 100

     H. General and administrative as a percentage of net services sales: (General and

           administrative/Net services sales) x 100

     I. Operating profit margin (%): (Income from operations/Net sales) x 100

     J. Return on sales (%): [Net income (loss)/Net sales] x 100   

lirket by releasing Fire TV.S Three months later, in an ambitious strategic move, Amazon debuted in ways to create value for its customers. According to analysts, Amazon's business model was innovative EXHIBIT 3 Amazon.com's Consolidated Income Statements, 20o10-2014 (in millions of 2012 2010 Net product sales Net services sales Net sales Cost of sales Gross profit Fulfillment Marketing Technology and content General and administrative Other operating income (expense), net Income from operations Interest income $70,080 $60,903 $51,733 $42,000 $30,792 13,549 9,360 6,077 3,412 88,988 74,452 61,093 48,077 34,204 26,561 7,643 18,908 37,288 10,789 4,576 1,630 2,909 45,971 15,122 62,752 7.6. 10,766 4,332 9,275 1,552 8,585 2,898 2,408 6,565 1,734 (65) Interest expense Other income (expense), net Non-operating income (expense) Income (loss) before income taxes (289) (239) (132) Provision for income taxes Equity-method investment activity, net of tax Net income (loss) 37 (71) (155) $ (241) 274 $ (39) (12) (7) 631 1,152 Sources: Amazon.com Inc., Annual Reports

Explanation / Answer

The calculations are has follows:

Year

2014

2013

2012

2011

2010

1

Net product sales

70080

60903

51733

42000

30792

A

Net product sales growth (%)

=(70080-60903)/60903

= 15.07%

17.73%

23.17%

36.40%

N/A

2

Net Services Sales

18908

13549

9360

6077

3412

B

Net Services Sales growth %

(18909-13459)/13549

= 39.55%

44.75%

54.02%

78.11%

N/A

3

Net Sales

88988

74452

61093

48077

34204

C

Net Sales growth %

(88988-74452)/74452

= 19.52%

21.87%

27.07%

40.56%

4

Cost of Sales

62752

54181

45971

37288

26561

5

Gross Profit

26236

20271

15122

10789

7643

D

Gross Margin (%)

(26236/88988)

= 29.48%

27.23%

24.75%

22.44%

22.35%

6

Fulfillment

10766

8585

6419

4576

2898

E

Fulfillment % (of cost of sales)

(10766/62752)

= 17.16%

15.85%

13.96%

12.27%

10.91%

7

Marketing

4332

3133

2408

1630

1029

F

Marketing % (of COGS)

(4332/62752)

= 6.90%

5.78%

5.24%

4.37%

3.87%

8

Technology and content

9275

6565

4564

2909

1734

G

Technology and content % (of net product sales)

9275/88988

= 13.23%

10.78%

8.82%

6.93%

5.63%

9

General and Admin

1552

1129

896

658

470

H

General and Admin % (of net services sales)

1552/88988

= 8.21%

8.33%

9.57%

10.83%

13.77%

10

Income from operations

178

745

676

862

14606

I

Operating Profit margin (%)

178/88988

= 0.20%

1.00%

1.11%

1.79%

42.70%

11

Net income (loss)

-241

274

-39

631

1152

J

Return on sales (%)

-241/889888

= -0.27%

0.37%

-0.06%

1.31%

3.37%

Year

2014

2013

2012

2011

2010

1

Net product sales

70080

60903

51733

42000

30792

A

Net product sales growth (%)

=(70080-60903)/60903

= 15.07%

17.73%

23.17%

36.40%

N/A

2

Net Services Sales

18908

13549

9360

6077

3412

B

Net Services Sales growth %

(18909-13459)/13549

= 39.55%

44.75%

54.02%

78.11%

N/A

3

Net Sales

88988

74452

61093

48077

34204

C

Net Sales growth %

(88988-74452)/74452

= 19.52%

21.87%

27.07%

40.56%

4

Cost of Sales

62752

54181

45971

37288

26561

5

Gross Profit

26236

20271

15122

10789

7643

D

Gross Margin (%)

(26236/88988)

= 29.48%

27.23%

24.75%

22.44%

22.35%

6

Fulfillment

10766

8585

6419

4576

2898

E

Fulfillment % (of cost of sales)

(10766/62752)

= 17.16%

15.85%

13.96%

12.27%

10.91%

7

Marketing

4332

3133

2408

1630

1029

F

Marketing % (of COGS)

(4332/62752)

= 6.90%

5.78%

5.24%

4.37%

3.87%

8

Technology and content

9275

6565

4564

2909

1734

G

Technology and content % (of net product sales)

9275/88988

= 13.23%

10.78%

8.82%

6.93%

5.63%

9

General and Admin

1552

1129

896

658

470

H

General and Admin % (of net services sales)

1552/88988

= 8.21%

8.33%

9.57%

10.83%

13.77%

10

Income from operations

178

745

676

862

14606

I

Operating Profit margin (%)

178/88988

= 0.20%

1.00%

1.11%

1.79%

42.70%

11

Net income (loss)

-241

274

-39

631

1152

J

Return on sales (%)

-241/889888

= -0.27%

0.37%

-0.06%

1.31%

3.37%