Financial Performance of the Triple Bottom Line

Amazon Financial Performance Analysis
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Amazon Financial Performance Analysis
Current Financial Performance
The current financial performance of Amazon can be gauged using traditional matrices. The revenue growth for the company for the current year is 37.62% as compared to 2019. The gross profit rose by 32.85%, and the net profit margin is 5.53% (Macro Trends, 2021). The net cash flows of the company have also grown to $5,967 million. The key financial indicators represent a profitable company with free cash flows and steady ratios depicting a stable financial performance.
Impact of the Triple Bottom Line on Financials
The triple bottom line's impact would increase the operating cost of the doing business while affecting the heads of wages, administration, and general expenses. While the traditional business model is focused on profit maximization, moving towards triple bottom lines requires the sacrifice of profits and high capital investments. This business model's success depends on stakeholders' value (Piscicelli et al., 2018). Below is the impact of this business model on various stakeholders with key financial performance indicators.
Employees
If the company chooses to move towards more equitable wages as part of the triple bottom line strategy, it will affect its financial performance. High wages would increase the income statement expenditures and ultimately affect the cash position in the balance sheet. The free cash flows would be decreased as a result. The company has previously faced lawsuits for not following the standard labor practices and fair wages (Heim, 2018). If it takes any measures to improve the conditions, it will affect the capital and free cash flows in the short run.
Shareholders
Although moving towards triple bottom line can crate shareholder's value in terms of value addition, economically, it decreases the EPS. That means that shareholders have to sacrifice the monetary benefits of EPS for creating economic or social value. Economic value addition and Return on assets impact the shareholder's value (Al-Awawdeh & Kareem Al-Sakini, 2018). Both of these parameters will be impacted by high expenditures on social causes or sustainability investments. Profits will shrink and directly reduce the Return on assets.