Recast the financial statements Amazon (Solution)

  

Recast the financial statements Amazon below. Step 1 is to classify the lines appropriately, then step 2 is to aggregate like items to produce the standardizedHelpful Notes: (a) fulfillment costs these are viewed as cost of sales for most retailers; (b) stock option costs these are probably for senior management and hence should probably be classified as SG&A; and (c) in the cash flow statement gains and losses on currency translations (shown at the end of the statement are shown as operating factors that imply that cash from operations in the standardized format does not equate to that reported by the firm.Income StatementClassifications200220012000SalesNet sales$3,932,936$3,122,433$2,761,983Cost of SalesCost of sales2,940,3182,323,8752,106,206Gross profit992,618798,558655,777Operating expenses:fulfillment costsFulfillment392,467374,250414,509SG&AMarketing125,383138,283179,980SG&ATechnology and content215,617241,165269,326SG&AGeneral and administrative79,04989,862108,962Stock-based compensation68,9274,63724,797stock option costsAmortization of goodwill and other intangibles5,478181,033321,772Restructuring-related and other41,573181,585200,311Total operating expenses$928,494$1,210,815$1,519,657Income (loss) from operations64,124-412,257-863,880Interest IncomeInterest income23,68729,10340,821Interest ExpenseInterest expense-142,925-139,232-130,921Other expenseOther income (expense), net5,623-1,900-10,058Other gains (losses), net-96,273-2,141-142,639Total non-operating expenses, net($209,888)($114,170)($242,797)Other expenseLoss before equity in losses of equity-method investees-145,764-526,427-1,106,677Other expenseEquity in losses of equity-method investees, net-4,169-30,327-304,596Loss before change in accounting principle($149,933)($556,754)($1,411,273)Cumulative effect of change in accounting principle801-10,523Net loss($149,132)($567,277)($1,411,273)Balance SheetClassificationsYear Beginning January 1, ($000’s)20032002Current assets:Cash and Marketable SecuritiesCash and cash equivalents$738,254$540,282Cash and Marketable SecuritiesMarketable securities562,715456,303InventoryInventories202,425143,722Accounts ReceivableAccounts receivable, net & other current assets112,28267,613Total current assets$1,615,676$1,207,920Long-Term TangibleFixed assets, net239,398271,751Long-Term TangibleGoodwill, net70,81145,367Other Long-Term TangibleOther intangibles, net3,46034,382Other Long-Term TangibleOther equity investments15,44228,359Other assets45,66249,768Total assets$1,990,449$1,637,547LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent liabilities:Accounts PayableAccounts payable618,128444,748Other Current LiabilitiesAccrued expenses and other current liabilities314,935305,064Other Current LiabilitiesUnearned revenue47,91687,978Interest payable71,66168,632Long-term debtCurrent portion of long-term debt and other13,31814,992Total current liabilities$1,065,958$921,414Long-term debtLong-term debt and other2,277,3052,156,133Shareholders deficitCommon shareholders equityCommon stock, $0.01 par value: Authorized shares 5,000,000 Issued and outstanding shares — 387,906 and 373,218 shares, respectively3,8793,732Common shareholders equityAdditional paid-in capital$1,649,946$1,462,769Common shareholders equityDeferred stock-based compensation-6,591-9,853Common shareholders equityAccumulated other comprehensive income (loss)9,662-36,070Common shareholders equityAccumulated deficit-3,009,710-2,860,578Total stockholders’ deficit($1,352,814)($1,440,000)Total liabilities and stockholders’ deficit1,990,4491,637,547Cash Flow StatementClassificationsYear Ended December 31, ($000’s)200220012000OPERATING ACTIVITIES:Net incomeNet loss($149,132)($567,277)($1,411,273)Long-term operating accruals otherAdjustments to reconcile net loss to net cash provided by (used in) operating activities:Long-term operating accruals depreciation and amortizationDepreciation of fixed assets and other amortization82,27484,70984,460Long-term operating accruals otherStock-based compensation68,9274,63724,797Long-term operating accruals otherEquity in losses of equity-method investees4,16930,327304,596Long-term operating accruals depreciation and amortizationAmortization of goodwill and other intangibles5,478181,033321,772Long-term operating accruals otherNon-cash restructuring-related and other3,47073,293200,311Long-term operating accruals otherGain on sale of marketable securities, net-5,700-1,335-280Long-term operating accruals otherOther losses (gains), net96,2732,141142,639Long-term operating accruals otherNon-cash interest expense and other29,58626,62924,766Long-term operating accruals otherCumulative effect of change in accounting principle-80110,523Changes in operating assets and liabilities:Net (investment in) or liquidation of operating working capitalInventories-51,30330,62846,083Net (investment in) or liquidation of operating working capitalAccounts receivable, net and other cur. assets-32,94820,732-8,585Net (investment in) or liquidation of operating working capitalAccounts payable156,542-44,43822,357Net (investment in) or liquidation of operating working capitalAccrued expenses and other current liabilities4,49150,03193,967Net (investment in) or liquidation of operating working capitalUnearned revenue95,404114,73897,818Net (investment in) or liquidation of operating working capitalAmortization of previously unearned revenue-135,466-135,808-108,211After-tax expenseInterest payable3,027-34534,341Net cash provided by (used in) operating activities$174,291($119,782)($130,442)Year Ended December 31, ($000’s)200220012000INVESTING ACTIVITIES:Net (investment in) or liquidation of operating long-term assetsSales/maturities of marketable securities and investments553,289370,377545,724Net (investment in) or liquidation of operating long-term assetsPurchases of marketable securities-635,810-567,152-184,455Net (investment in) or liquidation of operating long-term assetsPurchases of fixed assets, including internal-use software-39,163-50,321-134,758Net (investment in) or liquidation of operating long-term assetsInvestments (including in equity-method investees)-6,198-62,533Net cash provided by (used in) investing activities($121,684)($253,294)$163,978FINANCING ACTIVITIES:Net stock (repurchase) or issuanceProceeds from exercise of stock options and other121,68916,62544,697Net stock (repurchase) or issuanceProceeds from issuance of common stock, net of issue costs99,831Net debt (repayment) or issuanceProceeds from long-term debt and other10,000681,499Net debt (repayment) or issuanceRepayment of capital lease obligations and other-14,795-19,575-16,927Financing costs-16,122Net cash provided by financing activities$106,894$106,881$693,147Net debt (repayment) or issuanceEffect of exchange-rate changes on cash and cash equivalents38,471-15,958-37,557Net debt (repayment) or issuanceNet increase (decrease) in cash and cash equivalents$197,972($282,153)$689,126