Ten years of Amazon (with reference Alphabet/Google) Part II

In the previous post I couldn’t tell everything, because the total message would have been too long and therfore confusing. Two things were different:

  • A long period of time (10 years) was taken for Amazon, but for Google (later Alphabet) which served as a reference, only the first and the last year in the series were added.
  • Instead of the usual set Revenue, (net) Profit, Equity and (total) Assets series(abbreviated as RPEA), I decided to take another set of values: Revenue, Profit before taxation, Equiy and (total) Liabilities.

The graph is repeated below. The picture is only a screenshot, but if it’s clicked the full 3D-graph will appear. (it’s HTML5/Javascript with WebGL, so enable both Javascript and WebGL in your browser).

Amazon - ten years

Manipulating the 3D-graph: Double-click the screenshot first.

Clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. This time you will really need it! Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Last time I already warned that the graph isn’t just a simple bar-graph, as all sizes do have a meaning. The bottom-view shows the changing width and depth, representing the equity and total liabilities trhoughout the years. See picture below, to the right.

Ten years Amazon - bottomIt illustrates a couple of things. At the start (2007 – 2014) the equity doesn’t grow as fast as the liabilities, which suggests than Amazon issues less shares than bonds or loans – as the former will be part of the equity, whereas the latter two count for liabilities. To make this very clear, I zoomed in on 2016, where Alphabet is shown together with Amazon. See picture below (In the screenshots I drew a couple of arrows, to provide some guidance on the interpretation of the graph for this position):

Amazon Alphabet 2016

For Amazon the equity is rather small, compared to the liabilities. For Alphabet the equity is even larger than the liabilities. Of course the companies are in very diferent industries and we know from the past that “fysical” industries need more capital to generate revenue than the more “service” based ones. Although AWS is about services, Amazon’s 2016 annual report service shows than the product-based revenue is still 70% of the total – the other 30% being service-related.

Amazon and AlphabethIn a similar screenshot however (t0 the right 2014 – 2016), we can see that Amazon nearly doubled its Equity, without really increasing its liabilities!

Another screenshot shows revenue and profit (this time before taxation). Again I added some arrows with explanatory texts.

Amazon Alphabet Revenue Profit

Here we see that the profit increases more than the revenue (in a relative sense) although  it’s still less impressive than Alphabet’s profit. Maybe it shows the impact of the Amazon transforming from a product-based to a service-based company. At the same time we can see there was a profit most of the time. Only 2014 shows a thin red roof indicating a loss.

It might be a good exercise to double click the screenshots and try and manipulate the real 3D-graph in such a way that the image of the screensot is obtained (more or less, because I cropped the screenshots before publishing them). The instructions for manipulation, like zooming, turning and tilting are at the beginning of this post, below the first screenshot!Amazon Input-file

Finally I want to share the numbers I used to generate the 3D-graph. As you will know, the AnRep3D-generator converts a set of numbers into a 3D-graph like the ones shown behind the screenshots. Of course all the values can be found in the annual reports, using the links I gave in the previous post, but it’s good to share the final input-file as well. The input-files also shows the parameter-line, which is an important addition.

Do you want to generate such a 3D-graph yourself?  Use our free demo. It is a fully functional generator, only limited to the creation of graphs for one company and one year. Visit our website for more information.

If you want to create more complex graphs, just download the free 3D=graph generator package.

About AnRep3D

AnRep3D is the new company, founded after the handover of Scientassist (together with VRBI) to one of my sons. From now I will focus on three-dimensional graphs for the financial markets, showing the main figures from annual reports in comparison. As per 2021 a second product is available: EnRep3D. It is meant to visualise energy. Although the engine is the same, the texts, manual, website and examples (including blogposts) are focused at energy.
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