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Essay / Research Paper Abstract
This 3 page paper performs a horizontal and vertical financial analysis of eBay for the years 1999 and 2000 looking at the changes within the firm, its performance, liquidity and capital structure. The bibliography cites 3 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEebay99.rtf
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Unformatted sample text from the term paper:
company. As the revenues increased the firm appears to gain some efficiencies of scale in terms of the services that it is offering, and the direct costs, (cost of sales)
decreases in proportional terms, from 25.6% of sales in 1999 to 22.1% of sales in 2000, which sees the gross profit increase from 74.4% in 1999 to 77.9% in 2000.
This results in the gross profit more than doubling in a year, as it increases by 101.02%. The efficiencies that ca be gained as a result of scale are
also seen within the overhead or operating costs, all costs with the exception of the merger related costs increase, but as a proportion of revnue they decrease, overall, the operating
costs drop from 75.9% of sales to 69.8%. Part of this is skewed by the cot of the merger and the integration costs which are higher in 1999, and the
increasing revnue from the merger is seen in 2000. Overall, the net result in terms of the net income, after all costs have been deducted (including interest and tax)
sees the net profit margin increase from 4.3% to 11.2%. Therefore, the firm appears healthy and to be improving. In order to assess the firm it is also important to
look at the balance sheet as well as the income. The firm has a capital structure which has a very low level of debt, in 1999 total liabilities only accounted
for 11.9% of the capital, in 2000 this increased to 14.3%, which meant that shareholders equality was 88.1% and 85.7% respectively. This is a decrease of shareholder equity in proportional
terms, making up a slight smaller amount of the capital, but overall there is an increase in the actual level of equity and 85.7% is a high level of equity
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