"In October, Amazon shocked shareholders when it reported a $437 million net loss for the quarter, its biggest in 14 years."
Please pardon my ignorance on Accounting. I don't have basic Accounting 101 knowledge, but please help me understand this. If I, as an individual, loose certain amount of money, it is most likely from my savings. Otherwise, it must be on my credit card, which means, I lost the bank's money. Eventually, I need to repay.
How can a company that hasn't made much profit over the years, loose $437 million? If it hasn't made profit, it has no savings. Clearly 'someone' is giving Amazon credit. I assume its the investors. But in what form does Amazon borrow money? Does Amazon issue bonds and raise money? Does it issue more shares/stock? In short, how is Amazon getting so much money and loosing it in each quarter.
When people say Amazon is not profitable, they mean "not very profitable". With their enormous revenue, they still generate enough money to maintain a pile of billions of dollars:
Please pardon my ignorance on Accounting. I don't have basic Accounting 101 knowledge, but please help me understand this. If I, as an individual, loose certain amount of money, it is most likely from my savings. Otherwise, it must be on my credit card, which means, I lost the bank's money. Eventually, I need to repay.
How can a company that hasn't made much profit over the years, loose $437 million? If it hasn't made profit, it has no savings. Clearly 'someone' is giving Amazon credit. I assume its the investors. But in what form does Amazon borrow money? Does Amazon issue bonds and raise money? Does it issue more shares/stock? In short, how is Amazon getting so much money and loosing it in each quarter.
Any links to read will also be helpful.