ACCT SEC 10-K REPORT
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AmazonSEC10-KPresentationexample.pptxShatia Dailey
Professor Anita Doherty
ACCT 221
April 6, 2021
Table of Contents
Amazon Background Slide 3
Stockholder’s Equity & Investments Slide 4
Income Statement & Balance Sheet Slide 5
Statement of Cash Flows Slide 6
Conclusion Slide 7
References Slide 8
Amazon Background
Amazon was founded by Jeff Bezos in 1994 from his garage located in Seattle. He started out selling books which would make it easy to deliver anywhere (Hall, 2020). When profits reached $610 million in 1998, the company expanded to deliver other items as well. In 2006, Jeff created Fulfillment by Amazon which managed inventory for other businesses. So now Amazon delivers all types of merchandise. Since the pandemic hit in 2020, Bezos hired 175,000 employees to help the increasing online sales. Jeff continues to look out for others because he gave $100 million to a nonprofit organization, Feed America (Forbes, 2021). Amazon always has the things available to purchase no matter what it may be. Before going to the store to shop, Amazon is always the first option. Now Amazon is even more popular thanks to the new social media platform TikTok. Whenever someone buys anything, it’s always from Amazon. In addition to being ranked number 2 on the Fortune 500 list, the revenue for 2020 is listed as $347,945 with a profit of $17,377. There was a 20.5% change from the revenue and a 15% change in profit last year.
Stockholder’s Equity & Investments
Amazon uses the par value. Par value represents legal capital of a company (Principles of Accounting: Chapter 14, 2021). Amazon does issue preferred stock but there is no outstanding ending December 2020 or any past year. Preferred stock benefits a stipulated dividend (Principles of Accounting: Chapter 14, 2021). Amazon does hold treasury stock. The treasury stock has stayed consistent starting from 2017. Treasury stock is shares of that company which are reacquired (Principles of Accounting: Chapter 14, 2021).
Over the years Amazon has been looking to invest in numerous companies. Last year, Amazon made announcement pertaining to more than half a dozen investments that would represent billions of dollars (Feiner, 2019). Amazon is looking to coordinate more delivery options and a possible new headquarters. There are some most mentionable investments that Amazon has made over the years. The headquarters for Amazon located in Seattle, Washington but Bezos wanted to expand. They searched for other locations such as Northern Virginia which will hold the second headquarters and Nashville which will be an operation center (Feiner, 2019). The reason behind these investments is to increase the company’s profits (Principles of Accounting: Chapter 9, 2021).
Income Statement & Balance Sheet
Between January 2021 and February 2021, it is expected to have an adjustment that is related to investment equity from private companies for about $1.5 billion. Income has been used to support technology, fulfillment, and marketing. Under marketing, advertising and promotional cost reached $8.2 billion in 2018, $11 billion in 2019, and $10.9 billion in 2020.
According to the notes listed for the balance sheet, Amazon has entered a non-cancellable finance and operating lease for equipment, offices, fulfillment, data centers, delivery, and all stores. The sheet shows the contractual commitments and support for operation.
Statement of Cash Flows
Amazon earns most of its cash through e-commerce sales. Since they offer the same products as most retail shops, online sales are up because of faster delivery times. Amazon is using its cash to invest in other companies to grow sales, decrease external risks, reduce costs, and invest in tech and infrastructure (Disfold, 2020). The increase of operating income has been due to unit sales which include third-party sellers and advertising. The operating expenses has increased in shipping cost which also believed to have a negative impact through quarter one of 2021 (Amazon, 2021, SEC-10K). Amazon typically invest any excess cash into money market funds and income securities.
Conclusion
Throughout the weeks, we learned about a 10K financial statement for a company. The statement gives information on how a company’s situation can change through organizational structure, company history, and the corporation. This report covered all information about Amazon’s products and services. When investors review a company’s 10K report, this will help them make the best decision when investing into a company.
References:
Amazon. (2021). SEC-10K Report. https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/0001018724-21-000004-index.htm
Disfold. (2020). How Amazon Makes and Uses its Billions (profit, investments, acquisitions). https://disfold.com/how-amazon-makes-uses-billions/
Feiner, L. (2019). Amazon is Spending Billions on Internet Satellites, Self-Driving Cars and More as Revenue Growth Slows. https://www.cnbc.com/2019/05/17/amazon-makes-several-start-up-investments-revenue-growth-slows.html
Forbes. (2021). #1 Jeff Bezos. https://www.forbes.com/profile/jeff-bezos/?sh=61377f261b23
Hall, M. (2020, April 9). Amazon.com. Encyclopedia Britannica. https://www.britannica.com/topic/Amazoncom
Principles of Accounting. (2021). Chapter 9: Long-Term Investments. https://www.principlesofaccounting.com/chapter-9/intent-based-accounting/
Principles of Accounting. (2021). Chapter 14: Corporate Equity Accounting. https://www.principlesofaccounting.com/chapter-14/
