Amazon 2018: Business Strategy and Financial Strategy

Learning Objective

1. Analysis of Amazon's strategy and how it is reflected in its financial statements. Realize that the P&L and a balance sheet are always the consequence of the strategy. a) Business or product strategy, reflected mainly in the P&L. b) Financial strategy, reflected mainly in the balance sheet, but also in the P&L. 2. Identify the risks of that strategy (or what could go wrong). 3. The case is also used to present a situation of a negative NFO (suppliers finance receivables and inventory and partially the fixed assets). 4. Other (possible) objectives of this case: a) Show how to reduce a long balance sheet to a short one that is concise and easy to understand. b) Show the futility of financial ratios if they are used in isolation without looking at the P&L and balance sheet. c) Show how to analyze a conglomerate: a company that operates in many businesses. d) Discuss if a big conglomerate like Amazon may become a threat to the economy and whether it should be regulated.