What are the growth rates for Amazon.com Inc (and how do I calculate them)? This

Question

What are the growth rates for Amazon.com Inc (and how do I calculate them)?

This is how far I've gotten:

ROE= net income/total equity

ROE= -$39,000,000/$8,192,000,000

ROE= -0.48%

ROA= net income/total assets

ROA= -$39,000,000/$32,555,000,000

ROA= -1.2%

Plowback Ratio= Addition to Retained Earnings/Net Income

Plowback Ratio= 0/-39,000

Internal Growth Rate= [ROA x (plowback ratio)]/[1-ROA x (1- plowback ratio)]

Amazon paid out no dividend in 2012, and have a net loss of $39,000, so there was no addition to retained earnings.

The full financial info that I am using comes from Yahoo Finance.

Explanation / Answer

RETENTION RATE = b = 1- dividend payout ratio = 1 ROA = -39000,000/ 32,555,000,000 = - 0.11979 % ROE = -39,000,000/8,192,000,000 = - 0.476% INTERNAL GROWTH RATE IGR = ROA x b / [ 1 - (ROA x b)]= ROA/( 1- ROA) = -0.0011979/ (1+0.0011979) = - 0.0011964 = - 0.11964 % SUBSTANTIAL GROWTH RATE SGR = ROE x b /[1 - (ROE x b)] = ROE/[1-ROE] = -0.00476/[1+0.00476] = - 0.00473 = -0.473%

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.