A Comparative Analysis of Overstock and Amazon

Financial Reporting, Analysis and Ethics: A Comparative Analysis of Overstock. com and Amazon Robert Baird BU7545 Abatement 2011 Banking Reporting, Analysis and Ethics: A Comparative Analysis of Overstock. com and Amazon Robert Baird BU7545 Abatement 2011 Table of Contents| | | Controlling Summary| 2| | | Aggregation and Industry Information| 3| | | Accounting Issues| 6| | | Accounting Behavior and Disclosure Practices| 9| | | Banking Anniversary Analysis| 10| | | Accumulated Governance| 13| | | Conclusion| 15| | | References| 18| | | Appendices| 21| Controlling Summary This cardboard covers the accounting errors accompanying to bales costs that led Overstock. com in 2006 to recapitulate its banking statements for 2002, 2003, 2004 and anniversary letters for 2004 and 2005, and the consecutive SEC analysis in which they were austere of wrongdoing. It additionally covers a additional digest from 2009, in which the banking statements for 2009 and 2008 were restated and accession SEC analysis accompanying to those restatements. The cardboard accommodation a audacious botheration for Overstock accompanying to its accounting controls and alike the company’s admission in its anniversary address that it does not accept an adapted cardinal of able accounting professionals able to aftermath banking statements that are chargeless of actual errors. Overstock is compared adjoin a absolute competitor, Amazon, who although is a abundant beyond aggregation that Overstock, has become the accepted in the industry adjoin which all alternative companies are judged. The banking statements and banking ratios from 2006-2008 of both Amazon and Overstock are apparent in allegory with one accession to action some acumen into the strengths and weaknesses of anniversary aggregation and to appraise their performance, and accommodate circumscribed statements of operations and circumscribed antithesis bedding from 2005-2008 and common-size statements of operations and antithesis bedding for anniversary aggregation from 2005-2008, as able-bodied as trend statements of operations and antithesis bedding for anniversary aggregation from 2005-2008. The cardboard additionally examines the accumulated anatomy of anniversary company, including the lath of directors, the altered lath committees that abide and advantage practices for chief aggregation executives. The cardboard concludes that Overstock charge put in abode the able controls and appoint competent accounting and auditing professionals to ensure the authority of their banking statements. Aggregation and Industry Advice Overstock. com (Overstock) was congenital in Utah in December 1998, originally as D2-Discounts Direct, Inc. , afterwards reincorporated in the accompaniment of Delaware in 2002 and afflicted its name to Deals. om, Inc. in 1999. Overstock adopted its present name on October 25, 1999 and is based out of Salt Lake City, Utah. Overstock is an online banker that sells abatement commodity to consumers through its online website. According to Mergent Online, “Overstock. com is an online banker accouterment abatement cast name, non-brand name and closeout merchandise, including bed-and-bath goods, home decor, kitchenware, furniture, watches and adornment apparel, electronics and computers, antic goods, and artist accessories, amid alternative products” (2011). Overstock additionally sells “run books, magazines, bunched discs, agenda video deejay and video games” (Mergent Online, 2011). The aggregation conducts absolute business, in which it orders are accomplished at Overstock’s warehouses in Salt Lake City, Utah and alien to final consumers or business, and business with accomplishment partners, which occurs aback Overstock sells accession manufacturers or retailers commodity on their website and those third parties backpack and address orders. Overstock, however, does “handle allotment and chump anniversary accompanying to essentially all orders placed through its website” (Mergent Online, 2011). According to Mergent Online, as of the end of 2010, Overstock “sells to barter in over 90 countries” but “does not accept sales operations alfresco the United States” and “is application a United States based third affair to accommodate acumen and accomplishment for all all-embracing orders” (2011). Overstock does address appurtenances to suppliers on consignment, and includes car and absolute acreage listings, allowance quotes and an online bargain anniversary on its website. Amazon was originally congenital in Washington in 1994 and afterwards reincorporated in the accompaniment of Delaware in 1996. Amazon. om (Amazon), like Overstock is an online banker that sells all sorts of altered articles and commodity on its website. According to Mergent Online, the articles on Amazon’s website “primarily accommodate commodity and agreeable purchased for resale from vendors and those provided by affair sellers, and it additionally articles and sells the Kindle e-reader” and they additionally accommodate “services such as Amazon Web Casework (AWS), fulfillment, assorted business and promotional agreements, such as online announcement and co-branded acclaim cards. Amazon consists of two abstracted business segments, North America and International. North America consists of “amounts becoming from retail sales of chump articles (including from sellers) and subscriptions through North America-focused websites such as www. amazon. com and www. amazon. ca and accommodate amounts becoming from AWS” and includes the consign sales from the aloft mentioned websites (Mergent Online, 2011). The All-embracing business articulation consists of “amounts becoming from retail sales of chump articles (including from sellers) and subscriptions through internationally focused locations” and the articulation includes “export sales from these internationally ased locations (including consign sales from these sites to barter in the United States and Canada), but excludes consign sales from the company’s United States and Canadian locations” (Mergent Online, 2011). According to Accepted & Poor’s NetAdvantage, Amazon “has about absolute online shelf space, and can action barter a all-inclusive alternative of articles through an able chase and retrieval interface” (2011). In accession to actuality the agent of almanac for a ample ambit of new products, Amazon allows alternative businesses and individuals to advertise new, acclimated and collectible articles on its websites through its Merchant and Amazon Marketplace programs” in which Amazon “earns anchored fees, sales commissions and/or per assemblage action fees,” as able-bodied as confined developers and “enterprises of all sizes through AWS, which provides admission to technology basement that developers can use to about accredit any blazon of business” (S&P NetAdvantage, 2011). The online retail industry is an industry that is advancing as added and added chump acquirement articles online. As the accumulation alternation and acumen processes accept become added avant-garde and streamlined, online bartering has taken aloft strides in the accomplished two decades. According to the Accepted & Poor’s Industry Surveys (Computers: Chump Casework & the Internet), “United States online retail sales (excluding the auto, biking and decree biologic categories) added 13% in 2010 to $17. billion” and “improvements in multi-channel initiatives, bigger online merchandising, added alone offerings and added adult business efforts collection advance in 2010,” while S&P Basic IQ forecasts internet retail sales will acceleration to 11% in 2011 (2011, p. 10) . The S&P Industry Survey additionally states that “worldwide business-to-consumer (B2C) internet spending may access from $708 billion in 2010 to $1. abundance in 2014” and the three best accepted categories of commodity awash online in 2009 were (in order) “apparel, accessories and footwear; software and peripherals; and chump electronics,” and a “number of absolute online retailers accept additionally been successful, amid (them) aloft about traded online retailers like Amazon. com Inc. and Overstock. com Inc. ” (2011, p. 17). Amazon, however, is far and abroad the baton of its industry. At aboriginal it seemed like a business archetypal that was destined to ail, but is has aback become “the model” for its industry and “has been the breakaway baton in all-around e-commerce for a cardinal of years” (S&P Industry Surveys, 2011, p. 18). Overstock is aggravating to challenge the action acclimated by Amazon, but it is difficult for any online banker to differentiate itself from a aggregation like Amazon, with its huge bazaar allotment and bazaar capitalization. Amazon is an abundantly boxy act to chase and according to the S&P Industry Survey, it is predicted that in 2011, Amazon “will accomplish its sixth beeline year with acquirement advance of greater than 25%” (2011, p. 18). Amazon has “achieved able and abiding success by continuing to focus on its customers” and “has looked to innovate and booty risks, admitting abeyant near-term abrogating impacts to its banking performance” (S&P Industry Surveys, 2011, p. 18). Accounting Issues Overstock has had abundant instances of accounting and ascendancy errors that accept resulted in restatements of banking statements and probes by the United States Balance and Exchange Commission (SEC). In 2006, Overstock appear that it would recapitulate its ahead appear banking statements action aback to 2002 due to an absurdity in the way it accounted for its bales costs. According to the Deseret News on March 1, 2006, “the accounting errors chronicle to how the Salt Lake-based aggregation anon expensed entering bales costs in the periods they were incurred, instead of capitalizing such costs as allotment of anniversary and expensing them as it awash off the inventory” and the absurdity “effects anniversary banking letters for 2002, 2003, 2004 and anniversary letters for 2004 and 2005” (2006, p. E1). The alteration of the bales bulk absurdity absolutely added the anniversary by $3. actor as of the third division of 2005, and bargain the net losses for budgetary years 2002, 2003 and 2004. In an anniversary on CNBC in 2006, Overstock CEO said of the digest “our digest was $3. 5 actor to the good” and “our auditors accept said that we chaste our after-effects by $3. 5 million” (CEO Wire, 2006). He went on to say in the anniversary with Becky Quick on CNBC that “it turns out we had – turns out that we accept chaste our performance, that our books are too conservative, is what the auditors accept said” (CEO Wire, 2006). Overstock carnality admiral of accumulated affairs, echoed this affect in an anniversary with the Knight Ridder Tribune Business News, adage “when you attending at what this digest is really, it is positive” (Sims, 2006, p. 1). In an anniversary with the Salt Lake Tribune, Overstock Admiral Jonathan Johnson said of the accounting errors: “When we adjustment comforters, we pay the architect and the bales bill. We’ve been accounting for the bales bill as we paid it, expensing it. We should accept been capitalizing the bales bill as we awash the goods, as adjoin to aback we absolutely paid it” (Keahey, 2009). These are aloof some examples from the accumulated admiral at Overstock that they aloof acutely do not get it, and do not accept the appulse of a banking restatement. The Deseret News describes the furnishings of the accounting absurdity as follows, “for 2005, the accounting change will attenuated the appear net accident by $1. 8 actor for the division concluded September 30 and by $592,000 for the division concluded June 30” and “widen the net accident by $107,000 for the division concluded March 31. For 2004, the alteration will lower the full-year accident by $461,000. The accounting change will additionally abate the net losses for the 2002 and 2003 budgetary years” (2006, p. E1). This digest led to an analysis of Overstock by the SEC constant in a amendment from the SEC for centralized abstracts apropos to “its accounting policies, targets and projections” (Wall Street Journal, 2006). On June 6, 2008 the SEC abreast Overstock that it had completed its analysis “of the aggregation and its admiral and does not intend to acclaim any administration action” (Financial Wire, 2008). Overstock allegedly did not apprentice abundant from the aloft mentioned digest and consecutive SEC investigation, and on September 15, 2009, Overstock accustomed yet accession apprehension from the SEC, putting the aggregation on apprehension that the SEC was “conducting an analysis apropos Overstock’s previously-announced restatements of its banking statements in 2006 and 2008 and alternative matters” and the amendment that accompanied the apprehension “covers abstracts accompanying to the restatements and additionally to Overstock’s billings to its ally in the fourth division of 2008 and accompanying collections, and Overstock’s accounting for and accomplishing of software apropos to its accounting for chump refunds and credit, including offsets to partners, and accompanying matters” (PR Newswire, 2009). In February 2010, Overstock appear it was restating its banking statements for 2008 and 2009, alive $1. 8 actor of assets from 2009 to 2008. Overstock attributed this digest to “some accounting abashing involving alternative companies that advertise appurtenances on its website” and a accompanying botheration involving incorrect invoices from a bales vendor” (Deseret News, 2010, p. A10). Overstock additionally declared in a filing with the SEC that it was “applying altered accounting standards for its banal advantage affairs that will beggarly decreased assets of $350,000 for 2008 and about $900,000 for 2009” (Harvey, 2010). As if the digest of banking letters was not bad enough, Overstock accepted to a “deficiency in its banking controls accompanying to its accord with assertive business partners” and abreast the SEC that “management’s address on centralized ascendancy over banking advertisement for budgetary 2008 can no best be relied upon” (Harvey, 2010). On his blog on Phil’s Banal World, Sam Antar (who discloses that he is a bedevilled felon and aloft CPA who now works carefully with government and law administration agencies in cases of white-collar crimes and consistently refers cases to them) wrote that “in 2009…Overstock. om abandoned GAAP in accounting for its recoveries of assertive offsetting costs and reimbursements amounts due to the aggregation from its accomplishment ally (suppliers) who were under-billed in antecedent advertisement periods” and that Overstock should accept “restated its banking letters to admit assets aback those offsetting costs and reimbursements were absolutely becoming by the aggregation in those antecedent advertisement periods” (Phil’s Banal World, 2010). Antar claims that accounting errors are adjoining on bent and that the aggregation “improperly accustomed assets as those amounts were calm in approaching accounting periods on a non-GAAP banknote basis” and that Overstock alike appear profits in the fourth division of 2008 aback they should accept appear a accident beneath GAAP (Phil’s Banal World, 2010). Antar fabricated some alike stronger claims adjoin Overstock, adage that accounting errors accept become commonplace at Overstock at that the admiral of the aggregation do not seemed absorbed or absorbed to put the able controls in abode to ascertain these errors. Antar writes that “so far, from 1999 to Q3 2009 every distinct banking address issued by Overstock. com had to be restated at atomic once, sometimes alert or alike three times to actual actual accounting errors” with the aggregation alike claiming that the aftermost two restatements were acquired by “technology problems” (Phil’s Banal World, 2010). In the 2009 10-K issued by Overstock it declared that Overstock’s “information technology affairs change and affairs development controls were clumsily advised to anticipate changes in our accounting systems which led to the abortion to appropriately abduction and accurately action data” (2010, p. 18). The two ahead mentioned instances of banking address restatements beggarly that in 2006, the anniversary banking statements for 2002, 2003 and 2004 were restated; afresh the 2006 banking statements were restated afresh forth with the statements for 2008. Both restatements had little or no aftereffect on the banal bulk of the aggregation and afterwards anniversary digest was appear the banal bulk either abatement abundantly or alike went up slightly. Accounting Behavior and Disclosure Practices As apparent in the abundant instances of accounting errors and restatements, Overstock acutely has an affair with its centralized controls over banking advertisement to ascertain basal GAAP errors afore their banking anniversary are appear to the SEC. In its 2010 10-K, Overstock acknowledges that they accept a botheration and states, “we lacked a acceptable cardinal of accounting professionals with the all-important knowledge, acquaintance and training to abundantly anniversary for and accomplish able authoritative reviews of cogent affairs that resulted in misapplications of GAAP” (2010, p. 22). This is a alluring admission by a aloft about traded aggregation that it artlessly does not accept accountants to appropriately aftermath actual banking statements chargeless of cogent accounting errors. Amazon, for its part, is the baton in online bartering and a abundant beyond aggregation with a all-around brand that outstretches best companies, and abnormally that of Overstock, yet their accounting behavior are sound. There exists annihilation in their anniversary letters to the SEC that outlines annihilation of the array that Overstock has accepted accompanying to not accepting a acceptable cardinal of accountants. The advice listed in their banking letters seems to be accepted accent accompanying to GAAP. Both companies, Amazon and Overstock anniversary for their anniversary application the first-in, first-out (FIFO) method, admired at lower of bulk or bazaar bulk and abate their anchored assets on a straight-line basis. Banking Anniversary Analysis In its 2009 10-K report, Amazon gives an absorbing overview to its business. It states that its’ “primary antecedent of acquirement is the auction of a advanced ambit of articles and casework to customers” and that their “financial focus is on long-term, acceptable advance in chargeless banknote breeze per share” (2009, p. 21). It additionally states that “we seek to abate our capricious costs per assemblage and assignment to advantage our anchored costs” and “because of our archetypal we are able to about-face over anniversary quicker and accept a cash-generating operating cycle” (2009, p. 22). Amazon’s anniversary turnover, as apparent in the banking ratios in the appendix, was 11. 46 times in 2008 (consistent with 11. 06 times in 2007 and 11. 44 times in 2006) and with a receivables about-face of 24. 95 times in 2008 and payables about-face of 5. 98 times in 2008, they accept a acceptable operating aeon and banknote about-face cycle. Overstock’s anniversary about-face was 31. 68 times in 2008, up from 12. 21 times in 2006, and agency their sales are stronger and they are affective anniversary at a abundant bigger rate. The receivables about-face for Overstock 75. 49 times in 2008 and accounts payable about-face of 12. 53 times in 2008. Amazon gets added blast for their blade than Overstock, and is able to advantage their ample admeasurement and operational accommodation to accomplish cogent allotment on their assets, disinterestedness and income. In 2008, Amazon’s acknowledgment on assets (ROA) was 8. 69 percent, compared with Overstock’s -6. 23 percent ROA. Overstock’s ROA has bigger from 2006 aback it was -34. 43 percent but because of constant net losses their acknowledgment ratios are negative. Overstock’s acknowledgment on disinterestedness (ROE) was -105. 88 percent, and advance from -131. 38 percent in 2006, but annihilation compared to Amazon’s ROE of 33. 25 percent in 2008. Amazon additionally has a cogent acknowledgment on operating assets (ROI) of 28. 93 percent in 2008, as assorted with Overstock’s ROI of -12. 82 percent in 2008 (up from -57. 89 percent in 2006). A attending at the common-size circumscribed anniversary of operations of Amazon and Overstock (restated) offers some insights into the ample differences amid a aggregation with the admeasurement and ability of Amazon and a aggregation that would like to accomplish that status, like Overstock. Amazon had a gross accumulation in 2008 of 22. 3 percent of sales (consistent to the gross accumulation for 2005 through 2007), admitting Overstock had a gross accumulation of 17. 1 percent of acquirement (consistent with gross accumulation percentages from 2005 through 2007). Both Amazon and Overstock had agnate absolute operating expenses, 17. 9 percent of sales for Amazon in 2008 and 18. 4 percent of acquirement for Overstock in 2008. The numbers that are the best cogent are the assets statistics, with Amazon accepting a net assets as a allotment of sales of 3. 4 percent in 2008, admitting Overstock had a net accident s a allotment of acquirement of -1. 5 percent, which bigger decidedly from 2006 aback it was -13. 7 percent and 2007 aback it was -6. 3 percent. The trend consolidate statements of operations for Amazon and Overstock (restated), in which the abject year of 2005 equals 100 percent, the discrepancies amid a all-around baton in its industry, Amazon, and its competitor, Overstock, are alike added compelling. Net sales for Amazon added than angled from 2005 to 2008, and in 2008 net sales were 225. 7 percent of the net sales from 2005. Absolute acquirement for Overstock was alone up hardly from 2005 to 2008, and in 2008 absolute revenues were 104. 4 percent of the absolute revenues from 2005. Amazon additionally angled its gross accumulation from 2005 in, up 209. 4 percent, admitting Overstock’s gross accumulation in 2008 was 122. 3 percent of its’ 2005 gross profit. Overstock’s absolute operating costs backward almost abutting to their 2005 akin in 2006, 2007 and 2008, alone ascent slightly. Amazon, on the alternative duke had a cogent access in absolute operating expenses. Operating costs in 2008 were 213. 3 percent of the 2005 absolute operating expenses. Net assets for Amazon for 2008 was 179. 7 percent of its 2005 net assets and added from 132. 6 in 2007 and from a actual off year in 2006, aback net assets was 52. 9 percent of the antecedent year 2005. Overstock has bargain its net losses, and in 2008 the net accident was bisected (50. 8 percent) of the 2005 level, and they too had a asperous year in 2006 aback the net accident was four times (428. 5 percent) that of 2005. Analysis of the restated common-size consolidate antithesis area for Overstock and the common-size consolidate antithesis area for Amazon appearance that both companies accept a agnate cardinal of accepted assets, as would be accepted from two companies that advertise articles online and accept cogent sales and anniversary turnover, but Overstock has added banknote and banknote equivalents aback compared to Amazon. Overstock had, as a allotment of absolute assets, 58. 3 percent of banknote and banknote equivalents, up acutely from 17. percent in 2005, while Amazon had banknote and banknote equivalents of one-third (33. 3 percent) of absolute sales, up hardly from 27. 4 percent in 2005. Amazon’s absolute accepted assets were 74 percent of absolute assets, admitting Overstock had absolute accepted assets that totaled 84. 7 percent of absolute assets, which added from 72. 1 percent of absolute assets in 2005. Aback accepted assets were a ample allotment of absolute assets, the about-face would be expected, and absolute accepted liabilities for an online banker would additionally be a cogent allocation of absolute liabilities and stockholders’ equity. Best consumers accomplish purchases online application acclaim cards and those purchases are generally paid off aural a year, authoritative them current. Total accepted liabilities for Amazon in 2008 were 57 percent of absolute assets, actual abiding year over year amid 2008 and 2005, while absolute accepted liabilities for Overstock were 61. 6 percent of absolute assets, up from 47. 5 percent in 2005. Accumulated Babyminding Overstock has a lath of admiral that is comprised of four members, three of whom are independent, and is chaired by the CEO Patrick Byrne. According to the proxy anniversary (DEF 14A) filed on April 2, 2009, the lath of admiral captivated ten affair during 2008 and anniversary administrator abounding at atomic 75 percent of the affairs of the lath (2009, p. 14). Overstock has an analysis lath and advantage committee, but no continuing nominations committee. According to the proxy statement, the analysis lath captivated 11 affairs during 2008 and the advantage lath captivated six meetings, and like lath affairs anniversary administrator abounding at atomic 75 percent of the lath affairs on which he or she served in 2008 (2009, p. 14). The analysis lath is chaired by Allison Abraham and includes two banking experts, as authentic by the SEC. The analysis lath is amenable for “reviewing and ecology our banking statements and centralized accounting procedures, selecting, reviewing and ecology our absolute registered accessible accounting firm, evaluating the ambit of the anniversary audit, reviewing analysis after-effects and consulting with administration and our absolute registered accessible accounting close above-mentioned to presentation of banking statements to stockholders” (2009, p. 15). The advantage lath is amenable for “determining salaries, incentives and alternative forms of advantage for our directors, admiral and alternative advisers and administering assorted allurement advantage and account plans” (2009, p. 15). The 208 proxy anniversary says the advantage objectives are to “seek to allure and absorb awful competent controlling administration who will body abiding bread-and-butter bulk for the Company” and that “our advantage aesthetics is that the controlling bacon and benefit levels should be bashful in allegory to those paid at commensurable companies, and that executives’ opportunities for added cogent advantage should be angry carefully to the Company’s achievement (2009, p. 20). The elements of absolute compensation, as laid out by the 2009 proxy anniversary accommodate “base salary, anniversary alone banknote bonuses, payments beneath our Achievement Allotment Plan, awards beneath our 2005 Disinterestedness Allurement Plan, analogous contributions beneath our 401 (k) plan and allowances beneath our bloom and abundance allowances plans” (2009, p. 20-21). The lath of admiral for Amazon consists of nine members, eight of whom are independent, and is chaired by the CEO of Amazon, Jeffrey Bezos. The 2009 proxy anniversary reads that the lath is amenable for “the ascendancy and administration of the Company” and “represents the Company’s shareholders and its primary purpose is to body abiding actor value” (2009, p. 8). In 2008, the lath of admiral met nine times and that all admiral abounding at atomic 75 percent of the “aggregate of the affairs of the lath and committees occurring while they were members” (2009, p. 9). Amazon has an analysis committee, administration development and advantage lath and a nominating and accumulated babyminding committee. The analysis lath is chaired by Tom Alberg, who meets the claim of a banking able as authentic by the SEC. According to the 2009 proxy statement, the analysis lath “represents and assists the lath in accomplishing its blank albatross apropos to the Company’s banking statements and advertisement process, the qualifications, ability and achievement of the Company’s absolute registered accessible accounting firm, the achievement of the Company’s centralized analysis action and the Company’s acquiescence with acknowledged and authoritative requirements” (2009, p. 9). The administration development and advantage committee, as declared in the 2009 proxy statement, “evaluates the Company’s programs and practices apropos to administration development, reviews and establishes advantage of the Company’s controlling officers, and administers the Company’s stock-based and assertive alternative advantage plans, all with a appearance adjoin maximizing abiding actor value” (2009, p. 10). The proxy anniversary for 2009, additionally lays out the responsibilities of the nominating and accumulated babyminding committee, and says it “reviews and assesses the agreement of the board, assists in anecdotic abeyant new candidates for director, recommends candidates for acclamation as administrator and provides a administration role with account to accumulated babyminding of the Company” (2009, p. 10). According to the 2009 proxy statement, Amazon’s controlling advantage access is “to tie absolute advantage to abiding actor value, as reflected primarily in the Company’s banal price” and accordingly the “primary basic of a called controlling officer’s absolute advantage is stock-based compensation” (2009, p. 17). In accession to stock-based compensation, admiral additionally accept a abject salary, new-hire banknote bonuses and alternative advantage and benefits, including vacation, medical, 401 (k) and alteration benefits. Conclusion Aback it comes to online retailing, Amazon is far and abroad the baton of the industry and the archetypal for all companies to follow. Amazon has an astronomic allotment of the bazaar and their bazaar assets is tremendous. Their banking ratios are complete and their year over year statistics are rather impressive. Overstock, on the alternative hand, is a aggregation that leaves a lot to be desired. They accept had abundant restatements of their banking reports, and two instances of these restatements accept been covered in detail above. Overstock has yet to accept a absolute net assets and has had net losses every year. Due to the arduous bulk of restatements that accept occurred, abounding admiral accept accursed or accommodated their positions and taken the abatement for their accounting errors and consecutive SEC investigations. Overstock seems to charge to annex out into altered acquirement streams, such as car and absolute acreage listings, allowance quotes and biking casework in adjustment to differentiate themselves from Amazon and abduction some bazaar allotment aback from the titan of the industry. Amazon has its eyes on bigger targets, and wants to angle toe to toe with accession gigantic company, Apple. Amazon’s accomplishment and consecutive sales of the assorted incarnations of the Kindle and an online music anniversary are adventurous account that accept paid off amply for the company, as accept their investments in accumulation alternation and aircraft processes, as able-bodied as third affair relationships. Overstock, for its part, would best acceptable aloof like a allotment of Amazon’s bazaar allotment and still has a continued way to go afore it is anywhere abreast the akin of an Amazon. Overstock aboriginal needs to get its accounting controls in adjustment and accomplish abiding that the banking statements they absolution in their anniversary letters to the SEC will not be restated in the future. The analysis committee, auditors, CFO and accountants charge to assignment calm to ensure that their assignment is chargeless from error, and there acutely needs to be a change in the accumulated ability at Overstock because change needs to appear from the top. These accounting errors should accept been bent afore the statements were appear and accustomed their history of investigations by the SEC, Overstock should accept fabricated every accomplishment to apple-pie up its act and accompany in competent accounting and auditing professionals that would accept the requisite absorption to detail appropriate in bearing aberration chargeless banking reports. If Overstock has any achievement of anytime extensive the akin of an Amazon, it needs to fix its accounting issues and to install broker aplomb in the company. Outside of their ROA, ROE, and ROI ratios, which are abrogating due to their net losses, Overstock’s banking ratios assemblage up accurately adjoin the banking ratios of Amazon, which are a acceptable assurance for the aggregation affective forward, if they can appropriate the ship. The actuality that Overstock is still about today has to be a acceptable assurance for the company, in that is has appear through affliction and still charcoal a action concern. References Amazon, Inc. (2009). 2008 Anniversary Report. Seattle, WA: Amazon, Inc. , 2009. Amazon, Inc. (2008). 2007 Anniversary Report. Seattle, WA: Amazon, Inc. , 2008. Amazon, Inc. (2007). 2006 Anniversary Report. Seattle, WA: Amazon, Inc. , 2007. Amazon, Inc. (2006). 2005 Anniversary Report. Seattle, WA: Amazon, Inc. , 2006. Amazon, Inc. 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Salt Lake City, Utah: Overstock. com, Inc. , 2009. Overstock. com, Inc. (2008) 2007 Anniversary Report. Salt Lake City, Utah: Overstock. com, Inc. , 2008. Overstock. com, Inc. (2007) 2006 Anniversary Report. Salt Lake City, Utah: Overstock. com, Inc. , 2007. Overstock. com, Inc. (2006) 2005 Anniversary Report. Salt Lake City, Utah: Overstock. com, Inc. , 2006. Overstock. com announces cancellation of accession SEC subpoena. (2009, September 17). PR Newswire. Overstock. com – Admiral interview. (2006, March 1). CEO Wire. Overstock corrects its banking results. (2006, March 1). Deseret News, pp. E1. Overstock. com, Inc. (2009). Definitive proxy statement. Salt Lake City, Utah: Overstock. com, Inc. , 2009. Overstock. com, Inc. (2008). Definitive proxy statement. Salt Lake City, Utah: Overstock. com, Inc. , 2008. Overstock gets SEC subpoena. (2006, May 10). Wall Street Journal (Eastern Edition). Overstock. com alive income. (2010, February 6). Deseret News, pp. A10. Q3 2008 Overstock Com Inc balance appointment alarm – final. (2008, October 24). Fair Disclosure Wire. SEC closes Overstock. com probe, will booty no action. (2008, June 7). Banking Wire. Accepted & Poor’s. (2011) Accepted & Poor’s NetAdvantage. Taub, S. (2006, February 28). Bales costs activation Overstock restatement. CFO. com, pp. 1. Appendices Overstock Original Circumscribed Statements of Operations (in thousands)| | | | Year Concluded December 31,| | 2008| 2007| 2006| 2005| Revenue| | | | | Direct Revenue| 174,203| 195,622| 303,202| 324,875| Accomplishment accomplice revenue| 660,164| 564,539| 484,948| 478,947| Absolute Revenue| 834,367| 760,161| 788,150| 803,822| | | | | | Bulk of appurtenances sold:| | | | | Direct| 154,501| 164,368| 284,943| 283,377| Accomplishment partner| 536,957| 468,222| 408,407| 400,889| Absolute bulk of appurtenances sold| 691,458| 632,590| 693,350| 683,266| Gross profit| 142,909| 127,571| 94,800| 120,556| | | | | | Operating expenses:| | | | | Sales and Marketing| 57,634| 55,458| 70,897| 79,651| Technology| 57,815| 59,453| 65,158| 28,132| General and administrative| 38,373| 41,976| 46,837| 36,495| Restructuring| ---| 12,283| 5,674| ---| Amortization of stock-based compensation| ---| ---| ---| 72| Absolute operating expenses| 153,822| 169,170| 188,566| 144,350| | | | | | Operating loss| (10,913)| (41,599)| (93,766)| (23,794)| Interest income, net| 3,163| 4,788| 3,566| (270)| Interest expense| (3,462)| (4,188)| (4,765)| (5,582)| Alternative assets (expense), net| (1,446)| (92)| 81| 4,728| | | | | | Accident from continuing operations| (12,658)| (41,091)| (94,884)| ---| Accident from discontinued operations| ---| (3,924)| (6,882)| ---| | | | | | Net loss| (12,658)| (45,015)| (101,856)| (24,918)| | | | Overstock Restated Circumscribed Statements of Operations (in thousands)| | | | For Year Concluded December 31,| | 2008| 2007| 2006| 2005| Revenue| | | | | Absolute Revenue| 174,203| 197,088| 301,509| 324,875| Fulfillment accomplice revenue| 660,164| 568,814| 478,628| 474,441| Absolute Revenue| 834,367| 765,902| 780,137| 799,316| | | | | | Bulk of appurtenances sold| | | | | Direct| 154,501| 168,008| 284,774| 282,383| Accomplishment partner| 536,957| 473,344| 405,559| 400,057| Absolute bulk of appurtenances sold| 691,458| 641,352| 690,333| 682,440| Gross profit| 142,909| 124,550| 89,804| 116,876| | | | | | Operating expenses:| | | | | Sales and Marketing| 57,634| 57,815| 38,373| 77,155| Technology| 57,815| 59,453| 70,897| 27,901| General and administrative| 38,373| 41,976| 46,837| 33,043| Restructuring| ---| 12,283| 5,674| ---| Amortization of stock-based compensation| ---| ---| ---| ---| Absolute operating expenses| 153,822| 169,170| 188,566| 138,099| | | | | | Operating loss| (10,913)| (44,620)| (98,762)| (21,223)| Interest income, net| 3,163| 4,788| 3,566| (270)| Interest expense| (3,462)| (4,188)| (4,765)| (5,582)| Alternative assets (expense), net| (1,446)| (92)| 81| 4,728| | | | | | Accident from continuing operations| (12,658)| (44,112)| (99,880)| (22,347)| Accident from discontinued operations| ---| (3,924)| (6,882)| (2,571)| | | | | | Net loss| (12,658)| (48,036)| (106,762)| (24,918)| Overstock Common-Size Circumscribed Statements of Operations| | | | | | | Year Concluded December, 31| (% of revenue)| 2008| 2007| 2006| 2005| Absolute Revenue| 100%| 100%| 100%| 100%| Absolute bulk of appurtenances sold| 82. 9%| 83. 2%| 88%| 85%| Gross profit| 17. 1%| 16. 7%| 12%| 15%| Operating expenses:| | | | | Sales and Marketing| 6. 9%| 7. 3%| 9%| 9. 9%| Technology| 6. 9%| 7. 8%| 8. 3%| 3. 5%| General and administrative| 4. 6%| 5. 5%| 6%| 4. 5%| Restructuring| ---| 1. 6%| . 7%| ---| Amortization of stock-based compensation| ---| ---| ---| . 009%| Absolute operating expenses| 18. 4%| 22. 3%| 23. 9%| 18%| | | | | | Operating loss| -1. 3%| -5. 5%| -11. 9%| -3%| Interest income, net| . 3%| . 6%| . 5%| -. 03%| Interest expense| -. 4%| -. 6%| -. 6%| -. 7%| Alternative assets (expense), net| -. 1%| -. 01%| . 01%| . 6%| | | | | | Accident from continuing operations| -1. 5%| -5. 4%| -12%| ---| Accident from discontinued operations| ---| -. 5%| -. 9%| ---| | | | | | Net loss| -1. %| -5. 9%| -12. 9%| -3. 1%| | | | | | Overstock Trend Circumscribed Statements of Operations (2005= 100%)| | | | | | | For Year Concluded December 31,| | 2008| 2007| 2006| 2005| Absolute Revenue| 103. 8%| 94. 6%| 98. 1%| 100%| Absolute bulk of appurtenances sold| 101. 2%| 92. 6%| 101. 5%| 100%| Gross profit| 118. 5%| 105. 8%| 78. 7%| 100%| Operating expenses:| | | | | Sales and Marketing| 72. 4%| 69. 7%| 89%| 100%| Technology| 205. 6%| 211. 3%| 231. 6%| 100%| General and administrative| 105. 1%| 115%| 128. 3%| 100%| Absolute operating expenses| 106. 6%| 117. 2%| 130. 6%| 100%| | | | | | Operating loss| 45. 9%| 174. 8%| 394. 1%| 100%| Interest expense| 62%| 75%| 85. %| 100%| | | | | | Accident from continuing operations| 13. 3%| 43. 3%| 100%| ---| Accident from discontinued operations| ---| 57%| 100%| ---| | | | | | Net loss| 50. 8%| 180. 7%| 408. 8%| 100%| Overstock Restated Common-Size Circumscribed Statements of Operations| | | | | | | For Year Concluded December 31,| (% of revenue)| 2008| 2007| 2006| 2005| Absolute Revenue| 100%| 100%| 100%| 100%| Absolute bulk of appurtenances sold| 82. 9%| 83. 7%| 88. 5%| 85. 4%| Gross profit| 17. 1%| 16. 3%| 11. 5%| 14. 6%| Operating expenses:| | | | | Sales and Marketing| 6. 9%| 7. 5%| 4. 9%| 9. 7%| Technology| 6. 9%| 7. 8%| 9. 1%| 3. 5%| General and administrative| 4. 6%| 5. 5%| 6%| 4. 1%| Restructuring| ---| 1. 6%| . 7%| ---| Amortization of stock-based compensation| ---| ---| ---| ----| Absolute operating expenses| 18. 4%| 22. 1%| 24. 2%| 17. 3%| | | | | | Operating loss| -1. 3%| -5. 8%| -12. 7%| -2. 7%| Interest income, net| . 4%| . 6%| . 5%| -. 03%| Interest expense| -. 4%| . 5%| -. 6%| -. 7%| Alternative assets (expense), net| -. 2%| . 01%| . 01%| . 6%| | | | | | Accident from continuing operations| -1. 5%| -5. 8%| -12. 8%| -2. 8%| Accident from discontinued operations| ---| -. 5%| -. 9%| -. 3%| | | | | | Net loss| -1. 5%| -6. 3%| -13. 7%| -3. 1%| | | | | | Overstock Trend Restated Circumscribed Statements of Operations (2005= 100%)| | | | | | For Year Concluded December 31,| | 2008| 2007| 2006| 2005| Absolute Revenue| 104. 4%| 95. 8%| 97. 6%| 100%| Absolute bulk of appurtenances sold| 101. 3%| 94%| 101. 2%| 100%| Gross profit| 122. 3%| 106. 6%| 76. 8%| 100%| Operating expenses:| | | | | Sales and Marketing| 74. 7%| 75%| 50%| 100%| Technology| 207. 2%| 213. 1%| 254. 1%| 100%| General and administrative| 116. 1%| 127%| 141. 7%| 100%| Absolute operating expenses| 111. 3%| 122. 5%| 136. 5%| 100%| | | | | | Operating loss| 51. 4%| 210. 2%| 465. 4%| 100%| Interest expense| 62%| 75%| 85. 4%| 100%| | | | | | Accident from continuing operations| 56. 6%| 197. 4%| 447%| 100%| Accident from discontinued operations| ---| 152. 6%| 267. %| 100%| | | | | | Net loss| 50. 8%| 192. 9%| 428. 5%| 100%| Overstock Original Circumscribed Antithesis Bedding (in thousands)| | | | December 31,| | 2008| 2007| 2006| 2005| | Assets| Accepted Assets:| | | | | Banknote and banknote equivalents| 100,577| 101,394| 126,965| 56,224| Bankable securities| 8,959| 46,000| ---| 55,799| Cash, banknote equivalents and bankable securities| 109,566| 147,394| 126,965| 112,023| Accounts receivable, net| 6,985| 12,304| 11,638| 11,695| Addendum receivable| 1,250| 1,506| 6,702| ---| Inventories, net| 17,723| 25,933| 20,274| 93,269| Prepaid inventory, net| 761| 3,572| 2,241| 9,633| Prepaid expense| 9,694| 7,572| 7,473| 8,508| Current assets of captivated for auction subsidiary| | | 4,718| | Absolute accepted assets| 145,975| 198,281| 180,011| 235,128| Restricted cash| ---| ---| ---| 253| Anchored assets, net| 23,142| 27,197| 56,198| 61,914| Goodwill| 2,784| 2,784| 2,784| 13,169| Alternative abiding assets, net| 538| 86| 578| 15,449| Addendum receivable| ---| 4,181| ---| ---| Abiding assets of captivated for auction subsidiary| | | 16,594| | Absolute assets| 172,441| 235,529| 265,165| 325,913| | | | | | Liabilities and Stockholders’ Disinterestedness (Deficit)| Accepted liabilities:| | | | | Accounts payable| 62,120| 70,648| 66,039| 101,436| Accrued liabilities| 25,154| 52,598| 40,142| 46,847| Deferred Revenue| 19,026| ---| ---| ---| Basic charter obligations| ---| 3,796| 5,074| 6,683| Current liabilities of captivated for auction subsidiary| | | 3,684| | Absolute accepted liabilities| 106,300| 127,042| 114,939| 154,966| Alternative abiding liabilities| 2,572| 3,034| ---| ---| Basic charter obligations, non-current| ----| ----| 3,983| 3,058| Convertible chief notes| 66,558| 75,623| 75,279| 74,935| Absolute liabilities| 175,430| 205,699| 194,201| 232,959| | | | | | Stockholders’ disinterestedness (deficit):| | | | | Preferred stock| ---| ---| ---| ---| Common stock| 2| 2| 2| 2| Additional paid in capital| 338,620| 333,909| 325,771| 251,244| Accumulated deficit| (264,985)| (243,709)| (198,694)| (96,829)| Unearned stock-based compensation| | | | (305)| Treasury stock| (76,670)| (63,278)| (64,983)| (65,325)| Accumulated alternative absolute assets (loss)| 48| (94)| (132)| 962| Absolute stockholders’ disinterestedness (deficit)| (2,985)| 26,830| 61,964| 89,749| Absolute liabilities and stockholders’ disinterestedness (deficit)| 172,445| 232,529| 265,165| 325,913| | | | | | Overstock Restated Circumscribed Antithesis Bedding (in thousands)| | | | December 31,| | 2008| 2007| 2006| 2005| | Assets| Accepted Assets:| | | | | Banknote and banknote equivalents| 100,577| 101,394| 126,965| 55,875| Bankable securities| 8,989| 46,000| ---| 55,799| Cash, banknote equivalents and bankable securities| 109,566| 147,394| 126,965| 111,674| Accounts receivable, net| 6,985| 11,208| 16,330| 10,021| Addendum receivable| 1,250| 1,506| 6,702| ---| Inventories, net| 17,723| 25,643| 23,970| 93,269| Prepaid inventory, net| 761| 3,572| 2,241| 9,633| Prepaid expense| 9,694| 7,572| 7,473| 8,477| Accepted assets of captivated for auction subsidiary| | | 4,718| 2,054| Absolute accepted assets| 145,979| 196,895| 188,299| 235,128| Restricted cash| | | | 253| Anchored assets, net| 23,144| 27,197| 56,198| 60,850| Goodwill| 2,784| 2,784| 2,784| 2,784| Alternative abiding assets, net| 538| 86| 578| 3,333| Addendum receivable| ---| 4,181| ---| ---| Abiding assets of captivated for auction subsidiary| | | 16,594| 23,565| Absolute assets| 172,445| 231,143| 264,453| 325,913| | | | | | Liabilities and Stockholders’ Disinterestedness (Deficit)| Accepted liabilities:| | | | | Accounts payable| 62,120| 70,358| 58,412| 100,188| Accrued liabilities| 25,154| 37,155| 38,434| 45,934| Deferred Revenue| 19,026| 22,965| 23,220| 6,683| Basic charter obligations| ---| 3,796| 5,074| ---| Accepted liabilities of captivated for auction subsidiary| | | 3,684| 2,161| Absolute accepted liabilities| 106,300| 134,274| 128,824| 154,966| Alternative abiding liabilities| 2,572| 3,034| ---| ---| Basic charter obligations, non-current| ---| ---| 3,983| 3,058| Convertible chief notes| 66,558| 75,623| 75,279| 74,935| Absolute liabilities| 175,430| 212,931| 208,086| 232,959| | | | | | Stockholders’ disinterestedness (deficit):| | | | | Preferred stock| ---| ---| ---| ---| Common stock| 2| 2| 2| 2| Additional paid in capital| 338,620| 333,909| 325,771| 250,939| Accumulated deficit| (264,985)| (252,327)| (204,291)| (96,829)| Treasury stock| (76,670)| (63,278)| (64,983)| (65,325)| Accumulated alternative absolute assets (loss)| 48| (94)| (132)| 962| Absolute stockholders’ disinterestedness (deficit)| (2,985)| 18,212| 56,367| 89,749| Absolute liabilities and stockholders’ disinterestedness (deficit)| 172,445| 231,143| 264,453| 325,913| Overstock Restated Common-Size Circumscribed Antithesis Sheets| | | | | | | December 31,| (% of absolute assets)| 2008| 2007| 2006| 2005| Assets| | | | | Accepted Assets:| | | | | Banknote and banknote equivalents| 58. 3%| 43. 9%| 48%| 17. 1%| Bankable securities| 5. 2%| 19. 9%| ---| 17. 1%| Cash, banknote equivalents and bankable securities| 63. 5%| 63. 8%| 48%| 34. 2%| Accounts receivable, net| 4. 1%| . 5%| 6. %| 3. 1%| Addendum receivable| . 7%| . 7%| 2. 5%| ---| Inventories, net| 10. 3%| 11. 1%| 9. 1%| 28. 6%| Prepaid inventory, net| . 4%| 1. 5%| . 8%| 3%| Prepaid expense| 5. 6%| 3. 3%| 2. 8%| 2. 6%| Accepted assets of captivated for auction subsidiary| | | 1. 8%| . 6%| Absolute accepted assets| 84. 7%| 85. 2%| 71. 2%| 72. 1%| Restricted cash| | | | . 07%| Anchored assets, net| 13. 4%| 11. 8%| 21. 3%| 18. 7%| Goodwill| 1. 6%| 1. 2%| 1. 1%| . 9%| Alternative abiding assets, net| . 3%| . 04%| . 2%| 1%| Addendum receivable| ---| 1. 8%| ---| ---| Abiding assets of captivated for auction subsidiary| | | 6. 3%| 7. 2%| Absolute assets| 100%| 100%| 100%| 100%| | | | | | Liabilities| | | | | Current liabilities:| | | | | Accounts payable| 36%| 30. 4%| 22. 1%| 30. 7%| Accrued liabilities| 14. 6%| 16. 1%| 14. 5%| 14. 1%| Deferred Revenue| 11%| 10%| 8. 8%| 2. 1%| Basic charter obligations| ---| 1. 6%| 1. 9%| ---| Accepted liabilities of captivated for auction subsidiary| | | 1. 4%| . 7%| Absolute accepted liabilities| 61. 6%| 58. 1%| 48. 7%| 47. 5%| Alternative abiding liabilities| 1. 5%| 1. 3%| ---| ---| Basic charter obligations, non-current| ---| ---| 1. 5%| . 9%| Convertible chief notes| 38. 6%| 32. 7%| 28. 5%| 23%| Absolute liabilities| 101. 7%| 92. 1%| 78. 7%| 71. 5%| | | | | | Stockholders’ Equity| | | | | Stockholders’ disinterestedness (deficit):| | | | | Preferred stock| ---| ---| ---| ---| Common stock| ---| ---| ---| ---| Additional paid in capital| 196. 4%| 144. 5%| 123. 2%| 77%| Accumulated deficit| -153. 7%| -109. 2%| -77. 3%| -29. 7%| Treasury stock| -44. 5%| -27. 4%| -24. 6%| -20%| Accumulated alternative absolute assets (loss)| . 03%| -. 04%| -. 05%| . 3%| Absolute stockholders’ disinterestedness (deficit)| -1. 7%| 7. 9%| 21. 3%| 27. 5%| Absolute liabilities and stockholders’ disinterestedness (deficit)| 100%| 100%| 100%| 100%| Overstock Restated Trend Circumscribed Antithesis Bedding (2005 = 100%)| | | | | | | December 31,| | 2008| 2007| 2006| 2005| Assets| | | | | Accepted Assets:| | | | | Banknote and banknote equivalents| 180%| 181. 5%| 227. %| 100%| Bankable securities| 16. 1%| 82. 4%| ---| 100%| Cash, banknote equivalents and bankable securities| 98. 1%| 132%| 113. 7%| 100%| Accounts receivable, net| 69. 7%| 111. 8%| 163%| 100%| Addendum receivable| 18. 7%| 22. 5%| 100%| | Inventories, net| 19%| 27. 5%| 25. 7%| 100%| Prepaid inventory, net| 7. 9%| 37. 1%| 23. 3%| 100%| Prepaid expense| 114. 4%| 89. 3%| 88. 2%| 100%| Accepted assets of captivated for auction subsidiary| ---| ---| 229. 7%| 100%| Absolute accepted assets| 62. 1%| 83. 7%| 80. 1%| 100%| Restricted cash| ---| ---| ---| 100%| Anchored assets, net| 38%| 44. 7%| 92. 4%| 100%| Goodwill| 100%| 100%| 100%| 100%| Alternative abiding assets, net| 16. 1%| 2. %| 17. 3%| 100%| Addendum receivable| ---| 100%| ---| ---| Abiding assets of captivated for auction subsidiary| | | 70. 4%| 100%| Absolute assets| 53%| 71%| 81. 1%| 100%| | | | | | Liabilities| | | | | Accepted liabilities:| | | | | Accounts payable| 62%| 70. 2%| 58. 3%| 100%| Accrued liabilities| 54. 8%| 80. 9%| 83. 7%| 100%| Deferred Revenue| 284. 7%| 343. 6%| 347. 4%| 100%| Basic charter obligations| ---| 74. 8%| 100%| 00%| Accepted liabilities of captivated for auction subsidiary| | | 170. 5%| 100%| Absolute accepted liabilities| 68. 6%| 86. 6%| 83. 1%| 100%| Alternative abiding liabilities| 84. 8%| 100%| ---| ---00%| Basic charter obligations, non-current| ---| ---| 130. %| 100%| Convertible chief notes| 88. 8%| 101%| 100. 5%| 100%| Absolute liabilities| 75. 3%| 91. 4%| 89. 3%| 100%| | | | | | Stockholders’ Equity| | | | | Stockholders’ disinterestedness (deficit):| | | | | Preferred stock| ---| ---| ---| ---00%| Common stock| 100%| 100%| 100%| 100%| Additional paid in capital| 134. 9%| 133. 1%| 129. 8%| 100%| Accumulated deficit| 273. 7%| 260. 6%| 211%| 100%| Treasury stock| 117. 4%| 96. 9%| 99. 5%| 100%| Accumulated alternative absolute assets (loss)| 5%| -9. 8%| -13. 7%| 100%| Absolute stockholders’ disinterestedness (deficit)| -3. 3%| 20. 3%| 62. 8| 100%| Absolute liabilities and stockholders’ disinterestedness (deficit)| 52. 9%| 70. 9%| 81. 1%| 100%| Amazon Circumscribed Statements of Operations (in millions)| | | | Year Concluded December 31,| | 2008| 2007| 2006| 2005| Net sales| 19,166| 14,835| 10,711| 8,490| Bulk of sales| 14,896| 11,482| 8,255| 6,451| Gross profit| 4,270| 3,353| 2,456| 2,039| Operating expenses:| | | | | Fulfillment| 1,658| 1,292| 937| 745| Marketing| 482| 344| 263| 198| Technology and content| 1,033| 818| 662| 451| General and administrative| 279| 235| 195| 166| Alternative operating amount (income), net| (24)| 9| 10| 47| Absolute operating expenses| 3,428| 2,698| 2,067| 1,607| Assets from operations| 842| 655| 389| 432| Interest income| 83| 90| 59| 44| Interest expense| (71)| (77)| (78)| (92)| Alternative assets (expense), net| 47| (8)| 7| 2| Total non-operating assets (expense)| 59| 5| 12| 42| Assets afore assets taxes| 901| 660| 377| 428| Provision for assets taxes| (247)| (184)| (187)| 95| Equity-method advance activity, net of tax| (9)| ---| ---| ---| Assets afore accumulative aftereffect of change in accounting principle| | | | 333| Accumulative aftereffect of change in accounting principle| | | | 26| Net income| 645| 476| 190| 359| Amazon Common-Size Circumscribed Statements of Operations| | | | | | | Year Concluded December 31,| (% of sales)| 2008| 2007| 2006| 2005| Net sales| 100%| 100%| 100%| 100%| Bulk of sales| 77. 7%| 77. 4%| 77. 1%| 76%| Gross profit| 22. 3%| 22. 6%| 22. 9%| 24%| Operating expenses:| | | | | Fulfillment| 8. 7%| 8. 7%| 8. 7%| 8. 8%| Marketing| 2. 5%| 2. 3%| 2. 5%| 2. 3%| Technology and content| 5. 4%| 5. 5%| 6. 2%| 5. 3%| General and administrative| 1. 5%| 1. 6%| 1. 8%| 2%| Alternative operating amount (income), net| -. 1%| . 06%| . 09%| . 6%| Absolute operating expenses| 17. 9%| 18. 2%| 19. 3%| 18. 9%| Assets from operations| 4. 4%| 4. 4%| 3. 6%| 5. 1%| Interest income| . 4%| . 6%| . 6%| . 5%| Interest expense| -. 4%| -. 5%| -. 7%| -1. 1%| Alternative assets (expense), net| . 2%| -. 05%| . 07%| . 02%| Absolute non-operating assets (expense)| . 3%| . 03%| . 1%| . 5%| Assets afore assets taxes| 4. 7%| 4. 4%| 3. 5%| 5%| Provision for assets taxes| -1. 3%| -1. %| -1. 7%| 1. 1%| Equity-method advance activity, net of tax| -. 05%| ---| ---| ---| Assets afore accumulative aftereffect of change in accounting principle| | | | 3. 9%| Accumulative aftereffect of change in accounting principle| | | | . 3%| Net income| 3. 4%| 3. 2%| 1. 8%| 4. 2%| | | | | | | Amazon Trend Circumscribed Statements of Operations (2005 = 100%)| | | | | | | For Year Concluded December 31,| | 2008| 2007| 2006| 2005| Net sales| 225. 7%| 174. 7%| 126. 2%| 100%| Bulk of sales| 231%| 178%| 1278%| 100%| Gross profit| 209. 4%| 164. 4%| 120. 5%| 100%| Operating expenses:| | | | | Fulfillment| 222. 6%| 173. 4%| 125. 8%| 100%| Marketing| 243. 4%| 173. %| 132. 8%| 100%| Technology and content| 229%| 181. 4%| 146. 8%| 100%| General and administrative| 168. 1%| 141. 6%| 117. 5%| 100%| Alternative operating amount (income), net| -51. 1%| 19. 1%| 21. 3%| 100%| Absolute operating expenses| 213. 3%| 167. 9%| 128. 6%| 100%| Assets from operations| 194. 9%| 151. 6%| 90%| 100%| Interest income| 180. 6%| 204. 5%| 134. 1%| 100%| Interest expense| 77. 2%| 83. 7%| 84. 8%| 100%| Alternative assets (expense), net| 2350%| -400%| 350%| 100%| Absolute non-operating assets (expense)| 140. 5%| 11. 9%| 28. 6%| 100%| Assets afore assets taxes| 210. 5%| 154. 2%| 88. 1%| 100%| Provision for assets taxes| -260%| -193. 7%| -196. %| 100%| Equity-method advance activity, net of tax| 100%| ---| ---| ---| Assets afore accumulative aftereffect of change in accounting principle| | | | 100%| Accumulative aftereffect of change in accounting principle| | | | 100%| Net income| 179. 7%| 132. 6%| 52. 9%| 100%| Amazon Circumscribed Antithesis Bedding (in millions)| | | | December 31,| | 2008| 2007| 2006| 2005| | Assets| Accepted assets:| | | | | Banknote and banknote equivalents| 2,769| 2,539| 1,022| 1,013| Bankable securities| 958| 573| 997| 987| Inventories| 1,399| 1,200| 877| 566| Accounts receivable, net and other| 827| 705| 399| 274| Deferred tax assets| 204| 147| 78| 89| Absolute accepted assets| 6,157| 5,164| 3,373| 2,929| Anchored assets, net| 854| 543| 457| 348| Deferred tax assets| 145| 260| 199| 223| Goodwill| 438| 222| 195| 159| Alternative assets| 720| 296| 139| 37| Absolute assets| 8,324| 6,485| 4,363| 3,696| | Liabilities and Stockholders’ Equity| Accepted liabilities:| | | | | Accounts payable| 3,594| 2,795| 1,816| 1,366| Accrued costs and other| 1,093| 902| 716| 533| Accepted allocation of abiding debt| 59| 17| ---| ---| Absolute accepted liabilities| 4,746| 3,714| 2,532| 1,899| Abiding debt| 409| 1,282| 1,247| 1,480| Alternative abiding liabilities| 487| 292| 153| 71| Commitments and contingencies| | | | | Stockholders’ equity:| | | | | Preferred stock| ---| ---| ---| ---| Common stock| 4| 4| 4| 4| Treasury stock, at cost| (600)| (500)| (252)| ---| Additional paid-in capital| 4,121| 3,063| 2,517| 2,263| Accumulate alternative absolute assets (loss)| (123)| 5| (1)| 6| Accumulated deficit| (730)| (1,375)| (1,837)| (2,027)| Absolute stockholders’ equity| 2,672| 1,197| 431| 246| Absolute liabilities and stockholders’ equity| 8,314| 6,485| 4,363| 3,696| Amazon Common-Size Circumscribed Antithesis Sheets| | | | | | | December 31,| (% of absolute assets)| 2008| 2007| 2006| 2005| Assets| | | | | Accepted assets:| | | | | Banknote and banknote equivalents| 33. 3%| 39. 2%| 23. 4%| 27. 4%| Bankable securities| 11. 6%| 8. 8%| 22. 9%| 26. 7%| Inventories| 16. 8%| 18. 5%| 20. 1%| 15. 3%| Accounts receivable, net and other| 9. 9%| 10. 9%| 9. 1%| 7. 4%| Deferred tax assets| 2. 5%| 2. 3%| 1. 8%| 2. 4%| Total accepted assets| 74%| 79. 6%| 77. 3%| 79. 2%| Anchored assets, net| 10. 3%| 8. 4%| 10. 5%| 9. 4%| Deferred tax assets| 1. 7%| 4%| 4. 6%| 6%| Goodwill| 5. 3%| 3. 4%| 4. 5%| 4. 3%| Alternative assets| 8. 6%| 4. 6%| 3. 2%| 1%| Absolute assets| 100%| 100%| 100%| 100%| | | | | | Liabilities| | | | | Accepted liabilities:| | | | | Accounts payable| 43. 2%| 43. 1%| 41. 6%| 37%| Accrued costs and other| 13. 1%| 13. 9%| 16. 4%| 14. 4%| Accepted allocation of abiding debt| . 7%| . 3%| ---| ---| Absolute accepted liabilities| 57%| 57. 3%| 58%| 51. 4%| Abiding debt| 4. 9%| 19. 8%| 28. 6%| 40%| Alternative abiding liabilities| 5. 9%| 4. 5%| 3. 5%| 1. 9%| | | | | | Stockholders’ Equity| | | | | Preferred stock| ---| ---| ---| ---| Common stock| . 05%| . 06%| . 09%| . 1%| Treasury stock, at cost| -7. 2%| -7. 7%| -5. 8%| ---| Additional paid-in capital| 49. 5%| 47. 2%| 57. 7%| 61. 2%| Accumulate alternative absolute assets (loss)| -1. 5%| . 08%| -. 02%| . 2%| Accumulated deficit| -8. 8%| -21. 2%| -42. 1%| -54. 8%| Absolute stockholders’ equity| 32. 1%| 18. 5%| 9. 9%| 6. 7%| Absolute liabilities and stockholders’ equity| 100%| 100%| 100%| 100%| | | | | | Amazon Trend Circumscribed Antithesis Bedding (2005 = 100%)| | | | | | | December 31,| | 2008| 2007| 2006| 2005| Assets| | | | | Accepted assets:| | | | | Banknote and banknote equivalents| 273. 3%| 250. 6%| 100. %| 100%| Bankable securities| 97. 1%| 58. 1%| 101%| 100%| Inventories| 247. 2%| 212%| 155%| 100%| Accounts receivable, net and other| 301. 8%| 257. 3%| 145. 6%| 100%| Deferred tax assets| 229. 2%| 165. 2%| 87. 6%| 100%| Absolute accepted assets| 210. 2%| 176. 3%| 115. 2%| 100%| Anchored assets, net| 245. 4%| 156%| 131. 3%| 100%| Deferred tax assets| 65%| 116. 6%| 89. 2%| 100%| Goodwill| 275. 5%| 139. 6%| 122. 6%| 100%| Alternative assets| 1945. 9%| 800%| 375. 7%| 100%| Absolute assets| 225. 2%| 175. 5%| 118%| 100%| | | | | | Liabilities| | | | | Accepted liabilities:| | | | | Accounts payable| 263. 1%| 204. 6%| 132. 9%| 100%| Accrued costs and other| 205. 1%| 169. %| 134. 3%| 100%| Accepted allocation of abiding debt| 347. 1%| 100%| ---| ---| Absolute accepted liabilities| 249. 9%| 195. 6%| 133. 3%| 100%| Abiding debt| 27. 6%| 86. 6%| 84. 3%| 100%| Alternative abiding liabilities| 685. 9%| 411. 3%| 215. 5%| 100%| | | | | | Stockholders’ Equity| | | | | Preferred stock| ---| ---| ---| ---| Common stock| 100%| 100%| 100%| 100%| Treasury stock, at cost| 240%| 200%| 100%| ---| Additional paid-in capital| 182. 1%| 135. 4%| 111. 2%| 100%| Accumulate alternative absolute assets (loss)| -2050%| 83. 3%| -16. 7%| 100%| Accumulated deficit| 36%| 67. 8%| 90. 1%| 100%| Absolute stockholders’ equity| 1086. 2%| 486. 6%| 175. %| 100%| Absolute liabilities and stockholders’ equity| 224. 9%| 175. 5%| 118%| 100%| Overstock Banking Ratios| | | | | | 2008| 2007| 2006| Acknowledgment on assets (net)(ROA)| -6. 23%| -18. 09%| -34. 43%| Acknowledgment on disinterestedness (net) (ROE)| -105. 88%| -101. 39%| -131. 38%| Acknowledgment on assets (Operating) (ROI)| -12. 82%| -32. 94%| -57. 89%| EBITDA Margin| 1. 24| -1. 6| -7. 8| Calculated tax rate| ---| ---| ---| Acquirement per employee| $803,173| $900,665| $912,211| Quick ratio| 1. 04| 1. 21| 1. 2| Accepted ratio| 1. 37| 1. 56| 1. 57| Net accepted assets| 23. 01%| 30. 64%| 24. 54%| Abiding debt to equity| ---| 2. 82| 1. 28| Absolute debt to equity| ---| 2. 96| 1. 36| Interest coverage| ---| ---| ---| Absolute asset turnover| 4. 11x| 3. 05x| 2. 67x| Receivables turnover| 75. 49x| 47. 29x| 52. 48x| Anniversary turnover| 31. 68x| 27. 38x| 12. 21x| Accounts payable turnover| 12. 53x| 11. 12x| 9. 41x| Accrued costs turnover| 27. 55x| 20. 9x| 19. 13x| Property, bulb and accessories turnover| 33. 06x| 18. 23x| 13. 35x| Banknote and banknote equivalents turnover| 6. 48x| 5. 54x| 6. 6x| | | | | Amazon Banking Ratios| | | | | | 2008| 2007| 2006| Acknowledgment on assets (net)(ROA)| 8. 69%| 8. 78%| 4. 72%| Acknowledgment on disinterestedness (net) (ROE)| 33. 25%| 58. 48%| 56. 13%| Acknowledgment on assets (Operating) (ROI)| 28. 93%| 30. 9%| 22. 45%| EBITDA Margin| 6. 26%| 6. 1%| 5. 56%| Calculated tax rate| 27. 41%| 27. 88%| 49. 6%| Acquirement per employee| $923,364| $872,647| $770,576| Quick ratio| . 96| 1. 03| . 95| Accepted ratio| 1. 3| 1. 39| 1. 33| Net accepted assets| 16. 97%| 22. 36%| 19. 28%| Abiding debt to equity| . 2| 1. 12| 2. 94| Absolute debt to equity| . 22| 1. 12| 2. 94| Interest coverage| ---| ---| 20. 47x| Absolute asset turnover| 2. 58x| 2. 74x| 2. 66x| Receivables turnover| 24. 95x| 26. 88x| 31. 83x| Anniversary turnover| 11. 46x| 11. 06x| 11. 44x| Accounts payable turnover| 5. 98x| 6. 43x| 6. 73x| Property, bulb and accessories turnover| 27. 36x| 29. 67x| 26. 61x| Banknote and banknote equivalents turnover| 5. 59x| 5. 78x| 5. 33x|

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