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Amjad-Ali Khoja

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  • Amazon: Telling The Story Through Financial Statement Analysis [View article]
    Thanks for the comment. Greatly appreciated! My understanding is that the wide gap between the gross profit margins and the net profit for AMZN cam be primarily attributed to its heavy and continuous investments on content acquisition (streaming video business), new distribution and fulfilment centers (to help expand its Prime membership base), continuous development of devices (Kindle, potentially smartphone with HTC, etc.), and so forth. I found few relevant articles on this subject:

    Why Amazon Is Not Making Money
    http://bit.ly/17RR8Ub

    Amazon Grows, and Spends
    http://on.wsj.com/17RR6M0
    Nov 24 12:53 AM | Likes Like |Link to Comment
  • Amazon: Telling The Story Through Financial Statement Analysis [View article]
    Thanks Brian! If there is one thing I have learned in my newly acquired appreciation for financial statement analysis is respect for cash flow.
    Nov 23 11:51 PM | Likes Like |Link to Comment
  • Amazon: Telling The Story Through Financial Statement Analysis [View article]
    Victor, in ref to your 1st note, totally agree. Margin is definitely not profitability. It was my mistake with the earlier response to BriansGirl's post that caused this confusion. I meant to explain the change in gross margin (which is just one part of profitability), but I misstated it as profitability.

    In ref to your 2nd note, it would be interesting to dig into the level of discretion (along with supporting rationale) AMZN uses between COGS and operating expenses when it comes to reporting. It would also be good to understand the fixed vs the variable cost mix in COGS and operating expenses to better understand how they would evolve with increasing sales.
    Nov 23 11:32 PM | Likes Like |Link to Comment
  • Amazon: Telling The Story Through Financial Statement Analysis [View article]
    I like to thank Dr Patrick Badolato for all his guidance and support with this article.
    Nov 18 02:59 PM | Likes Like |Link to Comment
  • Amazon: Telling The Story Through Financial Statement Analysis [View article]
    Good point! I asked that question several times while writing this article. My opinion is that it is showing improving profitability (Q2 2013: 26.6% compared to 24 a year earlier; Q3 2013: 27.65%, reference: http://bit.ly/1jh5GfX).

    One way to define "long term" is as long as markets and shareholders think that Amazon is innovating and executing to a well defined business strategy. Example: I am impressed by how it is partnering with US postal services (http://usat.ly/1jh5Gwc) to start Sun delivery ahead of the holiday season. But again, this is just my opinion :)
    Nov 18 02:54 PM | Likes Like |Link to Comment
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