Financial Analysis E-bay

EBay, the market leader in online auctions, has experienced tremendous harvest-festival since 1996. The hobby numbers from Exhibit 1 demonstrate eBays modern evolution: - The number of users rose from 41,000 in 1996 to 10,006,000 (525% yearly developing rate) - Merchandise sales emergenced from $7 trillion in 1996 to $2.8 one thousand thousand (637% annual harvest rate) - The number of auctions jumped from 289,000 in 1996 to 129,560,000 (665% annual growth rate) The chart below focuses on the of the essence(p) proportions and figures used for completing a financial analysis for eBay.         1996         1997         1998         1999 lettuce Revenue Growth         N/A         29.1%         108.2%         160.9% Operating put on (as % of receipts)         20.0%         25.9%         14.8%         -5.2% Operati ng expenditure (as % of revenue)         58.7%         55.1%         66.5%         75.0% perfect(a) sales and Marketing Expense (as % of revenue         41.0%         37.8%         41.8%         43.0% Marketing Expense/Customer (regular users)         $320         $45.80         $16.50         $9.59 Marketing Expense/list         $45.46         $3.55         $1.07         $0.74 relapse on Assets (Net Income as % of Assets)         N/A         125.6%         4.9%         1.1% Return on comeliness (Net Profit as % of Equity)         N/A         695.7%         7.2%         1.3% Current ratio         N/A         4.42        Â Â 3.96         5.17 Debt to ! Asset Ratio         N/A         0.10         0.33         0.03 Debt to Equity Ratio         N/A         0.55         0.006         0.006 hard currency and Cash Equivalents (000s)         N/A         3,723         37,285         219,679 Short-term investments (000s)         N/A         N/A         40,401         181,086 The financial statements of eBay in Exhibits 3 and 4 smash that revenue increased from $32,051,000 in 1996 to $224,724,000 in 1999, while authorise income for the same period increased from $3,338,000 to $10,828,000. EBays revenue growth in 1999, from the previous year, had an astonishing increase of 160.9%. However, for the first time in the history of eBay, a disallow operate bring in occurred in 1999. After careful question of the ratios an d figures, the negative operating profit can be in the main attributed to promptly rising operating expenses compared to revenues and the ever-increasing hyper-competition in the online auction industry. Sales and trade expenses have stayed constant compared to... If you want to get a proficient essay, order it on our website: OrderCustomPaper.com

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