Amazon and E-Bay

The Business of Life
June 29, 2019
annualized gain
June 29, 2019

Part II Prompt

You will be doing an analazis of Amazon and E-Bay. You will be responsible for collecting, synthesizing, and making decisions regarding both companies. After evaluating these companies’ financial data, you will then decide which company’s stock is the better investment.

This section of your employment examination must be submitted in two parts. Part A will contain the workbooks that house all of your quantitative data and formulas, along with any of the information that is relevant for Walmart and E-Bay. Part B will contain your answers to the questions asked below, composed in a cohesive manner. If you are referring to data that is found within the workbooks in Part A, be sure to include a citation—for example, “rate of return is 3.570 USD (E64, WB2),” where E64 is the cell that the calculation took place in and WB2 is designating “workbook 2.” This ensures that your instructor can quickly and accurately check data entry, formula use, and financial calculations.

Your submission must address the following critical elements:

  1. Preparing the Workbooks
  1. Download the annual income statements, balance sheets, and cash flow statements for the last three completed fiscal years for Amazon and E-Bay. This information must be included in your final submission.

B.    Prepare a worksheet for each of the companies to display their financial data for the last three fiscal years. Ensure your data is accurate and organized. Include these worksheets as a workbook in your final submission.

C.    Find historical stock prices for both companies and add this information to the respective spreadsheets. Consider the appropriate date range you should use.

  1. Three-Year Returns
  1. What is the three-year return on the stock price of the Amazon (Company A)? How is the stock performing? Ensure that you use the appropriate formula in your spreadsheets to calculate the three-year return on the given company’s stock price.

B.    What is the three-year return on the stock price of the E-Bay (Company B)? How is this stock performing? Ensure that you use the appropriate formula in your spreadsheets to calculate the three-year return on your chosen company’s stock price.

C.    How do these two stocks compare in terms of three-year returns? What does this indicate about these two companies?

  1. Financial Calculations
  1. Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the price-to-earnings ratio for the last three fiscal years of the given and Amazon and E-Bay. Be sure that you are entering and using the correct formula.

B.    Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the debt-to-equity ratios for the last three fiscal years of the given and Amazon and E-Bay. Be sure that you are entering and using the correct formula.

C.    Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the return-on-equity ratios for the last three fiscal years of the given and Amazon and E-Bay. Be sure that you are entering and using the correct formula.

D.    Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the earnings per share for the last three fiscal years of the given and Amazon and E-Bay. Be sure that you are entering and using the correct formula.

E.    Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the profit margins for the last three fiscal years of the given and Amazon and E-Bay. Be sure that you are entering and using the correct formula.

F.    Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the free cash flows for the last three fiscal years of the given and Amazon and E-Bay. Be sure that you are entering and using the correct formula.

IV. Industry Averages

  1. Obtain current industry averages of three of the financial calculations above for both companies and add this information to your spreadsheet for comparison. Ensure the accuracy and organization of your data.

B.    In this context, how is each company’s financial health? How do Amazon and E-Bay compare to one another? Consider the appropriate date range you should use.

  • Performance Over Time
  1. Analyze the performance of the Amazon (Company A) over time. What financial strengths and weaknesses does this company have? Consider addressing the free cash flows and ratios you calculated earlier.

B.    Analyze the performance of your E-Bay (Company B) over time. What financial strengths and weaknesses does this company have? Consider addressing the free cash flows and ratios you calculated earlier.

C.    Analyze how the data differ between Amazon and E-Bay. Why do you think this is? Consider addressing the free cash flows and ratios you calculated earlier.

VI. Investment

  1. Are Amazon and E-Bay considered growth or value companies? Why?
  2. Which company’s stock is the better investment? Consider supporting your answer with data.

Guidelines for Submission: This part of the final project will be submitted in two parts. Part A will contain the workbooks that house all of your quantitative data andformulas, along with any of the information that is relevant for your chosen company. Part B will contain your answers to the prompts, composed in a cohesive manner. Part B should use double spacing, 12-point Times New Roman font, and one-inch margins. Citations should be formatted according to APA style.

 
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