My assessment is that Amazon has long-term viable business model but needs to fine tune model. Amazon.com has multiple core assets that enable it to merchandise goods such as books, music etc. Amazon's strategy is based upon selling consumer products at competitive prices.
Amazon as well acts as a direct seller of products the company also allows third parties such as individuals and businesses to retail their products on the site through its auctioning, Z-shop.
The company also operates other businesses website by utilizing the organizations services, features, and technologies. Amazon business is continually evolving from the leading online book retailer to a variety of product categories.
Through the addition of new businesses, Amazon.com operations become more complex. As business streams continue to develop, distribution methods become a concern adding further costs and reducing margins further.
STRENGHTS WEAKNESSES OPPORTUNITIES THREATS
Strong Internet Brand Weak strategy Implementation Multi-merchant strategy Competition Intensifying
Amazon Business Model New businesses add complexity to the company Underdeveloped International markets Aggressive pricing and marketing from competition
Clouded performance Third Party Sellers Inventory Risk
Yes I do agree with Ravi Suria's analysis of the credit risks associated with Amazon's bonds.
Year 2000 Debt to Equity Ratio = Total Debt/ Total Equity 2,137/ 26 = 82
Year 1999 Debt to Equity Ratio = Total Debt/ Total Equity 1466/266 = 5.51
Year 1998 Debt to Equity Ratio = Total Debt/ Total Equity 348/ 138 = 2.52
High-debt companies have higher D/E ratios than companies with low debt. Companies with D/E ratios below 0.5 carry low debt. And that means that conservative investors will give companies with D/E ratios of 0.5 and above a closer look.
Amazon had a debt to equity ratio of 82 in year 2000; 5.5
...