Key Financial Performance Indicators
Financial performance indicators reflect the success of business development and market success. In the case of Amazon, as the global corporation selected for analysis, these indicators are crucial criteria to evaluate to obtain an objective picture of its productivity. As stakeholders, employees, shareholders, and community groups can be involved. The net sales are a critical indicator to take into account, and according to the annual report, in 2020, this figure for Amazon was $386 billion, of which more than half ($164 billion) was generated by customer activity (Amazon, 2021a). Shareholders earned $21 billion for the company in 2020, and $25 billion was earned by third-party sellers (Amazon, 2021a).
The operating income earned by the corporation’s employees was $22 billion; payroll taxes were $11 billion; total assets were $321 billion (Amazon, 2021a). These indicators reflect different parties’ contributions to the development of the business and highlight the company’s productivity.
Additional Key Financial Line Items
To measure costs, additional key financial line items should be considered, particularly those related to the triple bottom line. According to Jain et al. (2021), this approach “integrates social, environmental and economic responsibilities,” and its main components are “people, profit and planet, known as 3Ps” (p. 140). Based on the company’s latest sustainability report, it is promoting a $15 per hour increase in the minimum wage (Amazon, 2021b).
The corporation also invested $2 billion to create a fund to reduce carbon emissions and $1 billion to protect tropical rainforests (Amazon, 2021b). $2 billion was spent on the program to provide affordable housing in the country (Amazon, 2021b). Substantial funds ($11.5 billion) were spent on addressing the consequences of the COVID-19 pandemic (Amazon, 2021b). All these costs reflect the proactive attitude of Amazon management towards pursuing a corporate social responsibility strategy and reflect the high costs of addressing not only profit but also social and environmental concerns.
References
Amazon. (2021a). Annual report. Web.
Amazon. (2021b). Amazon sustainability 2020 report: Further and faster, together. Web.
Jain, A., Mendiratta, P., & Kashiramka, S. (2021). Triple bottom line during pandemic. In V. Kumar & G. Gupta (Eds.), Strategic management during a pandemic (pp. 140-152). New York, NY: Routledge.