Amazon. Com, Inc., has a long history of reporting very low or negative profit margins. For the past five years, 2014-2018, Amazon has reported profit margins of (0.3%), 0.6%, 1.7%, 1.7% and 4.3%.During that same period the share price has increased from $300 to over $1,100.While there are many factors that drive a firm’s share price, let’s focus on why, with profit margins so low, the market thinks so favorably of Amazon.

Required:

1) Using only the additional information and AMZN’s comparative balance sheets for 2017 and 2018shown on the following page, construct a Statement of Cash Flows for the fiscal year 2018.

2) Briefly (3-4 sentences, max) answer the following question: Does the Statement of Cash Flows she deny light on why the market might view AMZN favorably even though earnings are small?

Answer rating: 100% (QA)

Part 1 Amazoncom Inc Statement of Cashflows for the fiscal year ended December 31 2018 Cash flows fr... View the full answer