Chapter 2, Problem 2.1ADM

Continuing Company Analysis—Amazon: Horizontal analysis

Amazon.com, Inc. is the largest Internet retailer in the United States. Amazon's income statements through income from operations for two recent years follow:

	Amazon.com, Inc Operating Income Statements For the Years Ended December 31 (in millions)	Year 2	Year 1
Product sales		$70,080	$60,903
Service sales		18,908	13,549
Total sales		$88,988	574,452
Cost of sales		$62,752	$54,181
Fulfillment		10,766	8,585
Marketing		4,332	3,133
Technology and content		9,275	6,565
General and administrative		1,552	1,129
Other operating expense (income), net		133	114
Total operating expenses		$88,810	$73,707
Income from operations		$ 178	$ 745

1. A. Prepare a horizontal analysis of the operating income statements. (Round percentages to one decimal place.)
2. B. Interpret the results of the horizontal analysis.