For many years, Amazon has been the leading e-commerce giant for the right reasons. In 2020, although there was business uncertainty amid the COVID-19 pandemic, Amazon’s financial books reveal an increase in the corporation’s revenue, cash flow, net sales, and income (Amazon, 2021). This thriving in the middle of difficult financial times was partly because of Amazon’s experience in the field coupled with its excellent corporate culture. Operating and free cash flows both increased by 72% and 20%, respectively, for the period ending December 31, 2020, and in the fourth quarter of the same year, the corporation witnessed an increase in its net sales, operating income, and net income (Amazon, 2021). The main reason for this increase in revenues is that, during the pandemic, its sales tripled due to movement restrictions; hence, people were forced to order goods online, and Amazon is the industry leader.
Over the next five years, Amazon’s financial health is likely to improve owing to the strategies the company has laid down. One of the critical steps the e-commerce giant has taken is to invest in its employees, which will increase their morale and productivity. Amazon is partnering with global medical experts to ensure vaccines are available for its front-line employees; for example, in 2020, it invested $2.5 billion in additional pay (Amazon, 2021). Additionally, the company’s permanent employees enjoy full health benefits, and its average wage is $15 per hour, which is double the federal minimum, implying that Amazon values its employees. The customers are also catered for since Amazon has increased its ability to deliver orders during the pandemic when movement is restricted, for instance, through Prime’s insanely-fast shipping (Amazon, 2021). Thus, the company’s financial health is expected to improve since motivated and valued employees will be more productive, and its customers are satisfied with the services, thereby propelling the organization to greater heights.
Reference
Amazon. (2021). Amazon.com announces financial results and CEO transition.