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Problem 1. The purpose of this problem set is to value the company Amazon.com Inc. (Amazon), i.e. to estimate the intrinsic value (price) per share of the company.
Here is the basic information that you will need, which is also available from Yahoo! Finance (all numbers in millions):
Year 2014
Revenues 88,988
EBIT 99
EBIT as % of revenues 0.11%
Taxes (unlevered) 32
Tax rate 32%
Net Income (unlevered) 67
Net Capex 147
Goodwill 3,319
Property and Equipment (PP&E) 16,967
Depreciation 4,746
as % of previous year’s Property Equipment 43%
Capex 4,893
NWC -12,355
NWC as % of revenues -14%
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