JHG et al., here's my quickie cash flow analysis of Amazon.
Data from Edgar-online
edgar-online.com
Cash flow analysis of Amazon.com
For the 9 months ending Sept 1998 the company reported a cash flow from operations of <$7,663,000>. But if the inventory and accounts payable are excluded (as per our previous discussion), the cash flow from operations decreased to <$22,326,000> for the period.
Notice that "product development cost" consisted largely of administrative hiring. In reading management's discussion it would seem to be an on-going business expense designed to service current customers.
A positive cash flow was achieved by the influx of $252,146,000 from financing activities, which includes the sale of $11,325,000 in common stock. The company reported a total net cash flow of $12,980,000 for the period.
Based on the foregoing it is hard to justify Amazon's contention that they are in positive cash flow when it all comes from external sources.
TTFN,
CTC |
