Amazon

You Are an Investment Analyst

Erica Hamilton

Strayer University

Financial Accounting ACC 557

Instructor: Dr. Randolph Stanley

March 18, 2013

Abstract

As a team we have collectively assumed the position of an accountant representing our Firm regarding stock market analysis for a company. We are professional consultants and while representing one of our Firm’s high-profile clients we learned that the client is interested in our professional opinion on its possible decision to invest in either Amazon or eBay. Prior to our team offering a professional opinion on the best course of action, we must conduct a financial analysis of both Amazon and eBay so as to offer the best, low-risk professional advice on the possible investment. Our team’s financial analysis considered the history of each company to include, but not be limited to products, customers, suppliers and leadership. Additionally, we analyzed stock prices and trends for those prices for each company as well as any notoriety in the media. Finally, we conducted a financial analysis of each company so as to determine the best company into which we should advise our client to invest.

Analysis of Amazon and eBay history.

In 1994 Amazon.com was founded by aspiring businessman Jeff Bezos and was a business that was started and operated from Bezos’ garage in the town of Bellevue, Washington. Amazon was viewed by Nick Hanauer, a prospective investor, as good business and he invested $40,000 in the business and that provided the initial thrust for this .com on-line business of selling books. The reviews of the initial web-site design and appearance were not favorable and in 1995, Bezos received money from another investor, Tom Alburg. Alburg provided a $100,000 investment to Amazon.com to help finance a more attractive web-site as well as enhance the company’s capabilities in hosting. Bezos was amazed at the number of people willing to purchase...