Amazon Ratio Comparison

Analysis of AMAZON ratios and comparison to competitor (eBay) with no industry standard (information not available)

In this paper I will analyze the companies AMAZON (AMZN) and EBay (EBAY), which are both on the NASDAQ market. Amazon "operates as an online retailer in North America and internationally. The company serves consumers through its retail Websites and focuses on selection, price, and convenience. It also offers programs that enable sellers to sell their products on company's Websites, and their own branded Websites. In addition, the company serves developers and enterprises through Amazon Web Services, which provides access to technology infrastructure that enables virtually various businesses. Further, it offers Kindle Direct Publishing, an online platform that lets independent authors and publishers to make their books available in the Kindle Store." Amazon's main competitor is EBAY, EBAY "eBay Inc. provides online platforms, tools, and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. Its Marketplaces segment operates ecommerce platform eBay.com.". Both of these companies are very successful in what they do and compete with eachother daily. In this paper I will analyze the two of them against eachother looking at the ratios that are listed in the two years 2011 and 2012:

* Earnings per share

* Debt to Equity

* Return on Assets

* Current ratio

* Quick Ratio

* Interest coverage ratio

Earning per Share

The Earnings per share s defined by Investopedia as "The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability." It is calculated by Net income minus dividends on preferred stock divided by Average Outstanding Shares. Firstly I will look at Amazon's number for 2011/2012. Amazons was 1.34/-.09 respectively. Looking at this we can see that stockholders of Amazon were making money in 2011 and severely dropping off in 2012. EBay's numbers for 2011/2012 were 1.76/2.10 respectively. Here we see that amazon's competitor was doing better than them from 2011 to 2012, which is not a good sign for Amazon.