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Amazon.com , inc. Nick Romjue. overview. Disaggregate Return on Net Enterprise Assets Enterprise profit margin Enterprise asset turnover Parsimonious Forecast Industry Analysis Free Cash Flow Valuation. The Catalog & mail order house industry Comparable companies.

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Amazon com inc

Amazon.com,inc

Nick Romjue


Overview

overview

  • Disaggregate Return on Net Enterprise Assets

    • Enterprise profit margin

    • Enterprise asset turnover

  • Parsimonious Forecast

  • Industry Analysis

  • Free Cash Flow Valuation


Amazon com inc

The Catalog & mail order house industry Comparable companies


Amazon return on net enterprise assets

Amazon return on net enterprise assets


Breaking apart rnea

Breaking apart rnea


Sales growth

Sales growth

Assume: 25%


Epm from sales

Epm (from sales)

Assume: 1%


Amazon com inc

eato

Assume: 50


Parsimonious assumptions

Parsimonious assumptions

  • Sales growth rate:25.00%

  • Enterprise profit margin:1.00%

  • Enterprise asset turnover:50


Parsimonious forecast

Parsimonious forecast


Industry analysis

Industry analysis

  • The comparable companies were not helpful in this analysis

  • Outside of comparing sales growth to eBay, none of them had financial figures similar to Amazon

  • These companies may be in the same industry, but they are at different life cycle stages and are each managed differently


Free cash flow

Free cash flow

FCF = EPAT ‚Äď Increase in NEA


Present value of fcf

Present value of fcf


Present value of fcf with continuing value

Present value of fcf with continuing value


Questions

Questions?


Sources

Sources

  • Amazon.comInc 10K for fiscal years 2010-2013


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