10 Jul 2019

I need proof reading help with my assignment please. Due tonight. Thank you.

Gross Margin shows what a company retains after incurring the direct costs associated with producing the goods and services sold. EBay’s gross margin shows they are more efficient than Amazon. Amazon has a larger cost than eBay. Amazon may sell more than eBay, but due to their cost their gross margins are far less than eBay’s. When considering gross margin for an investment opportunity it shows eBay is safer than Amazon for an investment.

After operating margin analysis we can say that eBay has a larger amount of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. In this case eBay will have some revenue left over after paying debt, interest, or other payments.

It goes without saying that most investors pay very close attention to a company’s Net Profit Margin before they invest their money into a company or a project. That’s why after reviewing the Net Profit Margin of both eBay and Amazon, I would suggest investing in eBay, since they are a more profitable company than Amazon.

Interest coverage ratio arises because how effortlessly a company can pay interest on outstanding debt. In this case eBay makes their place safe since they don’t have to pay any interest. On the other hand, Amazon has 12.59. In consideration of interest coverage ration it is also could be a good investment.

Market to book ratio is significant to financiers to comprehend how much are they paying for each dollar in net assets. Here I’ve calculated the total book value of its assets and its current market value. That’s why I can say that they have enough assets for both them to be strong in future.

ROE is expressed as the amount of net income returned as a percentage of shareholders equity. When an investor decided to finance in some company or project, he also chooses how much he will get back in the future because of their risk taking. In this case it would be more suitable for the financier to invest their money into eBay based on their return.

When somebody is getting ready to invest they’re always attempting to know where their money goes or is their money appropriately being used? Its gives them a sense of how well a company is using its money to generate returns. That’s why its help investors to understand efficiency of allocating the capital under its control to make profitable investments. Since no dividends were declared their efficiency results are the same as their ROE.

In this breakdown we can see that both companies are worthwhile in related to its assets. Though further scrutiny into the figures will show the eBay is more efficient in using its assets to generate earnings. For investment perspectives eBay is the safer place to invest your money.

After all analysis we see Amazon has by far larger sales, but their profit margins are less than eBay’s this is due to their cost being too high. Though eBay may have smaller number of sales they have better profits than Amazon. This is all due to their cost efficiency and well-managed activities. As far as asset turnover Amazon did get the best of eBay, but in the end, after all my analysis I would consider eBay the better option for investment.

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Reid Wolff
Reid WolffLv2
11 Jul 2019

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