Tag Archives: financials

How much cash does Amazon have in the bank?

Not that long ago, there was some noise about the amount of cash that Amazon – a company whic rarely makes much profit – had on hand:

Record Christmas takings have swollen Amazon’s cash pile to as much as $9bn (£5.7bn), the online retailer is expected to declare on Tuesday in results that will inflame the debate over its tax contributions around the world.

(via Amazon expected to reveal cash pile of up to $9bn after record Christmas)

But here’s the thing: Amazon’s cash isn’t like the cash held by a company like, say, Apple:

Most cash that Amazon.com generates comes not from earnings, but from the fact that it receives payment from its customers much faster than it pays its suppliers. During 2011, 76.8% of Amazon.com’s cash provided by operating activities came from the expansion of accounts payable (source: 10-K). Given that Amazon.com’s revenues are expanding fast, this effect translates into a larger cash hoard on its balance sheet.

(via Amazon’s Cash Is Not Amazon’s Cash – Seeking Alpha)

This isn’t cash that Amazon can invest in infrastructure, or product development. It’s just cash that it holds for a short period of time.