Amazon (AMZN) Part V

I’ve finally gotten around to looking at the cash flows for AMZN. I didn’t include all of the cash flow information from previous 10-ks but thankfully, AMZN did include cash from operations and free cash flow from 5 years.

Frankly, I’m surprised. AMZNs cash flows aren’t as good as I thought they might be, given the stock price. In fact, cash from operations, while growing, isn’t keeping pace with sales, indicating that cash operating expenses are growing faster than sales. Worse, free cash flow has actually been declining. Of course, that’s due to the large capex which is expected given the rapid growth in revenue. Most of the increase in AMZNs cash in 2012 appears to have come from the issuance of $3.3B in debt.

To tell the truth, I’m having a hard time finding anything compelling about this stock, and I don’t care for some of the accounting practices (like adding shipping fees collected to revenue and classifying depreciation expenses as part of other departmental expenses) which seem designed to try to hide something. So, for now, I doubt I’ll pursue this project any further.