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Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet Following are the income statements and...

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

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