In Unit II, you began working on your research paper that will be due in Unit VII of this course. In this unit, you will continue researching the company that you selected for your paper. For this ass

Amazon

Unit II

Financial Management

Columbia Southern University

Casidy Landry

Amazon is a company that my family uses on a weekly basis. During the pandemic it was a life saver for products we needed that we could not find within the stores as we live in an exceedingly small town. But even though COVID has began to cease and life is slowly going back to normal, we still use Amazon for a lot of our family needs. Therefore, I have chosen Amazon as the company I wish to research.

Amazon is known to be one of the world's largest packing, shipping, and storage inventory companies on a global scale. Amazon represents 40% of the US e-commerce market (History of Amazon, 2020). It has also integrated so many diverse types of technology within its company for each hub the company possesses globally. The company focused on e-commerce, communication through the cloud, digital streaming with Amazon Prime Movie, and AI technology.

The company originated in Washington in the 1990’s. Jeff Bezos is the company’s founder and most recently can be seen in the spotlight for flying with civilians in a spacecraft around the world (Rincon, 2021). Amazon has made imprints throughout the last 30 plus years by adding services to its product selling such as music, video streaming, and audible. Amazon started fulfillment centers in 2012 and purchased food markets around 2017 (History of Amazon, 2020). Jeff Bezos made some great decisions for his business and landed Amazon in the position of being the largest web-based retailer. This is measured both by annual revenue and how Amazon has capitalized the market. Amazon has also prided its self to go neck in neck with Google as being the Earth’s best and most safest place to be employed (Bezos, 2020).

Amazon’s firm initial public offering was listed at three million shares of common stock after only being in operation for a couple of years. Bezos decided to take the revenue from the stocks and enhanced the website and distribution techniques that Amazon possessed. This again was smart on his part as it improved costumer service and make consumer use of Amazon a much easier site to navigate. Amazon was in high demand and to balance that, Bezos expanded the company and created more distribution and fulfillment centers all throughout the United States. The organizational structure of Amazon was expanded as needed to create global groups based on function. Each portion of Amazon is separated into a team to ensure all portions run smoothly. Some of those teams for example include the Amazon Web Services, Worldwide Consumers, Legal Department, and Corporate Affairs. This drastically strengthened the company and helped make Amazon fierce competition.

Amazon’s capital structure is made up of the capital employed by the firm from its variety of financial sources. Both the owner’s capital and dep capital capped which represent the investment and financial strategies. The company is built on equity capital and reflects the capital that will be received through projected business and net profits to come. Projected profits can also be expected from current and future shareholders. Amazon likes to manage the capital by being above the current ratio. They figure out this ratio by dividing their assets from their liabilities (Bezos, 2020).

The financial structure of Amazon is all based on the equity of its shareholders, employees, 3P sellers, and customers. The more stock bought into Amazon and products bought from their online platforms allow Amazon to continue to grow. In the beginning, Amazon received funding from financial institutions and credit firms. However, Amazon has now far surpassed all competition by establishing payment of dividends to the financial institutions and all shareholders who own stock within the company. Amazon is not the only of its kind, but it is the largest and fasting growing still to this day. There is not likely to be a company which will surpass Amazon.

References

Bezos, J. (2020). Amazon Annual Report. Retrieved June 14, 2022, from https://www.annualreports.com/HostedData/AnnualReportArchive/a/NASDAQ_AMZN_2020.pdf.

History of Amazon: From garage startup to the largest e-commerce marketplace. Capitalism.com. (2020, August 19). Retrieved June 14, 2022, from https://www.capitalism.com/history-of-amazon/

Rincon, P. (2021, July 20). Jeff Bezos launches to space aboard New Shepard Rocket Ship. BBC News. Retrieved June 14, 2022, from https://www.bbc.com/news/science-environment-57849364