Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. • AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. • Is Amazon underpriced or overpriced compared to its peers?

Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. • AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. • Is Amazon underpriced or overpriced compared to its peers?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

QUESTION 7 Which of the following companies will probably have the highest decline in profit if the economy goes into recession? O A company with a DOL = 5.7 A company with a DOL = 2.5 A compnay with a DOL = 5.8 A company with a DOL = 5.5
ences Mc Graw Hill ! 1 Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and give him some business advice. Q Variable cost per unit (a) Sales revenue (8,400 units × $31.00) Variable cost (8,400 units x a) Contribution margin Fixed cost Net income Required Required B Company Name Operating leverage 7 2 Required a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 10 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will…
Question 9: • Problem • Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. • AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. • How would AMZN’s Enterprise Value change if the ratios were equal to the average of its peers?
B18 1 2 15 16 Company Data 3 Claythorne International 4 Rogers and Rogers Capital 5 Wargrave Limited 6 Seton, Lombard, and Marston Incorporated 7 8 Market Data 9 The Market 10 11 12 Required: 13 Note: Use cells A2 to C10 from the given information to complete this question. 14 17 A Risk-Free Rate B 18 Claythorne International 19 Rogers Rogers Capital Alpha 1.25% 0.85% 1.71% -0.18% Expected Return 9.50% 3.32% C Expected Return Beta 1.1000 1.5500 1.8500 -0.2000 Risk 22.71% 0.00% Using the information in the tables above, please calculate the expected excess return for this security using a single-factor model. D E F 20 Wargrave Limited 21 Seton, Lombard, and Marston Incorporated 22 23 24 25 Students: The scratchpad area is for you to do any additional work you need to solve this question or can be used to show your work. 26 Nothing in this area will be graded, but it will be submitted with your assignment. 27 28
REQUIRED: • Vertical Analysis • Financial Ratio
Q3
Which of the following decreases the cash holding A.The rising commodity prices increases the value of law material inventoriesby 10% B.A manufacturer decreases production in anticipation of a decrease in demand C.THe frim repurchases its own stocks D.THe corporation has decided to give their customer less time in paying their purchases
Both Apple and Google sell electronic devices, and each of these companies has a different product mix. Assume the following data are available for both companies. ($ millions) Sales Variable costs Fixed costs Apple $ 260,174 122,034 82,884 Required: 1. Compute income for each company. 2. Compute the degree of operating leverage for each company. 3. If unit sales decline, which company would experience the larger decline in income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Google $ 161,857 86,302 41,212 Income Compute income for each company. (Enter your answers in million of dollars.) Apple Google
Question 20 of 20 In a segment of the Technology industry, all Target companies of recent Transactions had negative EBITDA. When calculating Comparable metrics for recent Transactions, one could: 1. Add the Companies' high revenue growth rates to their negative EBITDA margins to obtain positive EBITDA multiples 2. Calculate EV/Sales metrics 3. Calculate EV/User metrics 4. Reorder the EV/EBITDA metrics and highlight to the reader that more negative EV/EBITDA multiples denote a higher price 5. Focus on % Premium paid O2 and 3 O 1, 2, and 4 O2, 3, and 4 O 2,3, and 5
21 A company's current ratio is 2.0, and its acid-test ratio is 1.0. How will these ratios be affected if the company pays cash to purchase inventory? The acid-test ratio will decrease, but the current ratio will not change. The current ratio will decrease, but the acid-test ratio will not change. O Both the current and acid-test ratios will decrease. O Neither the current ratio nor the acid-test ratio will change.
Q11 Andy Bailey recently graduated from the University of MF and is joining the Bank of MF as a financial analyst. He is assigned to conduct relative valuation to determine if the implied stock price per share of Amazon.com Inc. (ticker: AMZN). Bailey collects the following information about Amazon and its comparable companies. He notices that the earnings per share of NWSA and DXLG are negative. However, Bailey believes it is normal that some companies have negative EPS due to reasons such as asset impairment or corporate restructuring cost. Therefore, Bailey decides he should still include NWSA and DXLG when calculating the benchmark price-earnings ratio. Q: Is Bailey's decision on including NWSA and DXLG when calculating the benchmark price-earnings ratio justifiable? Why? Target Comparable AMZN VIAC GOOGL YNDX NWSA MSFT CHTR IBM DXLG Price 3256.93 37.26 1752.64 69.58 11.86 203.51 661.55 125.88 0.70 Basic EPS 42.66 3.93 59.15 1.03 -2.16 5.82 15.85 6.28 -0.89 Diluted EPS 41.83 3.92…
Q.1 Answer the following: a) Jim Tang, CFA, is a sell-side investment analyst. While at a software industry conference, Tang hears rumors that Blue Run Software may have falsified its financial results. When he returns to her office, Jim conducts a thorough analysis of Blue Run. Based on her research, including discussions with some of Blue Run's customers, Tang is convinced that Blue Run's reported 50% increase in net income during recent quarters is completely fictitious. So far, however, Tang is the only analyst suspicious about Blue Run's reported earnings. According to the CFA Institute Code of Ethics and Standards of Professional Conduct, the least appropriate action for Tang is to... (only one possible answer) Report her suspicions to Blue Run Do nothing until other analysts support her analysis. Recommend that her clients sell their Blue Run shares immediately. None of the above. b) Nick Bolton, CFA, acts as an outside portfolio manager for a Swiss wealth fund. Ralph…

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS