Question

Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet
Following are the income statements and balance sheets of Amazon.com Inc.

AMAZON.COM INC.
Consolidated Statement of Operations
$ millions		Dec. 31, 2015	Dec. 31, 2014
Net product sales		$79,268	$70,080
Net service sales		27,738	18,908
Total net sales		107,006	88,988
Operating expenses
Cost of sales		71,651	62,752
Fulfillment		13,410	10,766
Marketing		5,254	4,332
Technology and content		12,540	9,275
General and administrative		1,747	1,552
Other operating expense (income), net		171	133
Total operating expenses		104,773	88,810
Income from operations		2,233	178
Interest income		50	39
Interest expense		(459)	(210)
Other income (expense), net		(256)	(118)
Total non-operating (expense)		(665)	(289)
Income (loss) before income taxes		1,568	(111)
Provision for income taxes		(950)	(167)
Equity-method investment activity, net of tax		(22)	37
Net income (loss)		$596	$(241)

AMAZON.COM INC.
Consolidated Balance Sheets
In millions, except par value		Dec. 31, 2015	Dec. 31, 2014
Current Assets
Cash and cash equivalents		$15,890	$14,557
Marketable securities		3,918	2,859
Inventories		10,243	8,299
Accounts receivable, net and other		6,423	5,612
Total current assets		36,474	31,327
Property and equipment, net		21,838	16,967
Goodwill		3,759	3,319
Other assets		3,373	2,892
Total assets		$65,444	$54,505
Current Liabilities
Accounts payable		$20,397	$16,459
Accrued expenses and other		10,384	9,807
Unearned revenue		3,118	1,823
Total current liabilities		33,899	28,089
Long-term debt		8,235	8,265
Other long-term liabilities		9,926	7,410
Stockholders' equity
Preferred stock, $0.01 par value: Authorized shares-500
Issued and outstanding shares-none		0	0
Common stock, $0.01 par value: Authorized shares-5,000
Issued shares-494 and 488 Outstanding shares-471 and 465		5	5
Treasury stock, at cost		(1,837)	(1,837)
Additional paid-in capital		13,394	11,135
Accumulated other comprehensive loss		(723)	(511)
Retained earnings		2,545	1,949
Total stockholders' equity		13,384	10,741
Total liabilities and shareholders' equity		$65,444	$54,505

Forecast Amazon's 2016 income statement using the forecast assumptions, which are expressed as a percentage of total net sales unless otherwise indicated ($ in millions).

Net product sales growth	15%
Net service sales growth	40%
Cost of sales	67.0%
Fulfillment	12.5%
Marketing	4.9%
Technology and content	11.7%
General and administrative	1.6%
Interest income	$60
Interest expense	$520
Income tax expense (% pretax income)	38%

Forecast no change in the following income statement accounts: Other operating expense, net, Other expense, net; and Equity method investment activity.

Round all answers to the nearest whole number.

Do not use negative signs with any of your answers in the income statement.

AMAZON.COM INC.
Forecated Income Statement
$ millions		2016
Net product sales		$Answer
Net service sales		Answer
Total net sales		Answer
Operating expenses
Cost of sales		Answer
Fulfillment		Answer
Marketing		Answer
Technology and content		Answer
General and administrative		Answer
Other operating expense, net		Answer
Total operating expenses		Answer
Income from operations		Answer
Interest income		Answer
Interest expense		Answer
Other expense, net		Answer
Total non-operating income		Answer
Income (loss) before income taxes		Answer
Provision for income taxes		Answer
Equity-method investment activity, net of tax		Answer
Net income (loss)		$Answer

Answer 1