Answer the following questions:
1. Standing in the year 2000, evaluate Amazon's business strategy. What are its key elements? Is it sustainable?
2. Discuss the merits and shortcomings, if any, of Ravi Suria's assessment of Amazon's financial situation, given the information available to him at the time of his report. Do you agree with his conclusions?
3. With the benefit of hindsight, we know that Amazon did not run out of cash at the end of March 2001 as predicted by Suria. What reasons could explain their cash position at that date? Quantify wherever possible. (Hint: Was Suria's analysis flawed? Did Amazon alter its strategy?)
4. Consider the following alternative techniques for assessing short-term liquidity:
a. Cash burn rate
b. Altman's Z-score
Calculate these metrics at the time of Suria's report. Do they corroborate or refute Suria's views about Amazon's prospects?
5. Find a copy of Amazon's most recent 10-K using Edgar, Capital IQ, Amazon's website, or any other reasonable source. Using the financial statements in the 10-K, reassess Amazon's short-term and long-term liquidity prospects, and comment on its operating strategy. Has the company turned the corner or are the risks outlined in 2000 still present? Provide your calculations and assumptions.
Attachment:- Assignment.rar